PharmExec Blog

FMCP and Performance-Based Pricing

cpigg1.pngThe Foundation for Managed Care Pharmacy is all grown up. The nonprofit is flourishing under its executive director, Cindy Pigg (right), who took the reigns back in 2005 after handling pharmaceutical contracting for Cigna for 17 years. She just rang me to talk about her work to retool the organization to do the research that’s desperately needed in the managed care industry—like understanding the effects of prior authorization on treatment.

The Foundation is also fostering an interesting dialog on performance-based pricing. (It’s the topic of FMCP’s April 15th meeting in San Francisco; click here for more information.) Pricing by value looks like it’s gaining steam, particularly with CMS’ coverage with evidence development and the money-back guarantee Janssen-Cilag’s offered to UK’s NICE for the cancer treatment Velcade last year.

On the pharma side, the concept of value-based pricing is tricky because, to be profitable, it very much has to do with understanding how to leverage volume—something Big Pharma doesn’t have much experience with. Pharm Exec is running a thought-provoking piece on the topic by Thomas Nagle from The Monitor Group in our April issue. (Stay tuned.)

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