Janssen agrees to rebate cost of Olysio to England's NHS if it doesn't work

One of the friction points between drugmakers and payers is when those forking over the money have to cover very expensive drugs that may not make patients better. So in some cases, drugmakers are offering money-back guarantees if their drugs don't provide the benefits. Johnson & Johnson's ($JNJ) Janssen unit has agreed to do that with England's National Health Service (NHS) for its hep C fighter Olysio, even as the treatment won approval from the cost watchdog there.

Under what Janssen called a "unique scheme," the NHS will only pay for Olysio (simeprevir) if patients are effectively cured of the virus after 12 weeks of treatment. If they are not, Janssen will refund NHS' costs, Pharmafile reports. In clinical trials, the cure rate was about 80% after 12 weeks of using the drug. To reduce the chances of have to pay back money, Janssen is offering pre-treatment blood tests to weed out those patients who might not respond to the treatment.

"This unique scheme to make Olysio and a predictive blood test available in England, with the NHS paying only for successful outcomes, is a great example of an innovative, collaborative partnership that can deliver benefits to both patients and healthcare providers," says Mark Hicken, managing director of Janssen UK said, as quoted by Pharmafile.

Janssen today also got approval from National institute for Health and Care Excellence (NICE), for treating hepatitis C in both genotypes 1 and 4 in combination with peginterferon alfa and ribavirin, a reversal of earlier guidance which did not recommend it for use in treating genotype 4 cases, NICE reported.

The cost of hep C drugs have ignited big concerns among payers in the U.S. and Europe. Gilead Sciences ($GILD) agreed to a pay-for-performance clause for its hep C treatment Sovaldi in France, specifying it would pay rebates in case of treatment failure. That was part of a price negotiation that got Gilead to discount Solvaldi's price per box to €13,667 in France, €5,000 less than its original price in the country. The agreement puts a 12-week course of the treatment at €41,000, or about $51,000.

- here's the NICE announcement
- read the Pharmafile story

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