In warranty program, Pfizer will refund up to $50K for patients who discontinue use of rare disease drug

When purchasing a new car, appliance or electronic device, a customer usually is protected by a warranty.

But when it comes to a drug purchase, such guarantees usually don't apply.

Over the last several years however, some drugmakers have begun to experiment with money-back guarantees for their products.

Count Pfizer among them. Last year the pharma giant introduced its first warranty program, using it to promote lung cancer drug Xalkori. Now Pfizer has opened a similar program for newly approved Panzyga, which treats the rare disorder chronic inflammatory demyelinating polyneuropathy (CIPD).

Pfizer said it will refund patients and their commercial insurance companies for up to four treatments of the drug if it is “discontinued by the patient’s healthcare provider for clinical reasons.”

It’s a major commitment considering that Pfizer will return up to $16,500 per treatment, with the maximum refund coming to $50,000. If a patient’s insurance paid for all or a portion of the cost, the plan will be refunded that amount up to the maximum limit, minus the out-of-pocket cost incurred by the patient.

There is one key difference between the guarantees for Xalkori and Panzyga. The warranty for Panzyga is not available to people who are covered by Medicare or any other government assistance program. It's open only to those who pay cash or are covered by commercial insurance.

Along with other restrictions, the offer for Panzyga is available only to patients from the U.S. who discontinue use of the drug before their fifth treatment.

A few other companies have dabbled in the warranty arena. Last year, Takeda launched a rebate program for patients who discontinued treatment with lung cancer drug Alunbrig within three months. The company also has plans to extend value-based pricing to other expensive oncology drugs.

Meanwhile, in the cell and gene therapy space, payers are constantly looking at ways to pay for one-time treatments that are associated with large costs, but also significant benefits for patients. Since the duration of the treatment's benefit isn't always known up front, payers have pushed for financial assurances that the drugs will continue to work over time. In one innovative contracting model, Spark in 2018 offered performance-based rebates for its gene therapy Luxturna.