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<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Never thought I’d see the day….could have an
impact on prescribing and disposal habits downstream, literally and figuratively.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p style='line-height:14.0pt'><b><font size=4 color="#7f97b1" face=Verdana><span
style='font-size:13.0pt;font-family:Verdana;color:#7F97B1;font-weight:bold'>Kaiser
Daily Health Policy Report<o:p></o:p></span></font></b></p>
<meta content="Daily Health Policy Report" name=Topics.sup>
<p class=MsoNormal style='line-height:12.0pt'><b><font size=1 color="#394b6b"
face=Verdana><span style='font-size:9.0pt;font-family:Verdana;color:#394B6B;
font-weight:bold'><!-- <p class="title">Kaiser Health Disparities Report: A Weekly Look At Race, Ethnicity And Health</p> -->Prescription
Drugs | Pay-for-Performance Model Being Applied to Drug Makers in
Europe, <st1:country-region w:st="on"><st1:place w:st="on">U.S.</st1:place></st1:country-region><o:p></o:p></span></font></b></p>
<p class=MsoNormal style='line-height:12.0pt'><font size=2 color=black
face=Verdana><span style='font-size:10.0pt;font-family:Verdana;color:black'>[Oct
12, 2007]</span></font><font size=1 color=black face=Verdana><span
style='font-size:9.0pt;font-family:Verdana;color:black'> <o:p></o:p></span></font></p>
<p style='line-height:12.0pt'><font size=1 color=black face=Verdana><span
style='font-size:9.0pt;font-family:Verdana;color:black'>
Prescription drug makers are creating pay-for-performance contracts with
European state-run health care systems in an effort to "overcome" the
systems' "increasing stinginess about paying for new drugs," the <cite><i><font
face=Verdana><span style='font-family:Verdana'>Wall Street Journal</span></font></i></cite>
reports. According to the <cite><i><font face=Verdana><span style='font-family:
Verdana'>Journal</span></font></i></cite>, a rapid increase in drug prices over
the past decade has increased the demand on drug companies to be held
accountable for the claims they make. <br>
<br>
In <st1:place w:st="on">Europe</st1:place>, some government-run health systems
have established strict criteria for including drugs on their formularies,
including reviews of cost effectiveness. If a health system decides not to pay
for a treatment, the drug can effectively be locked out of the market. The <cite><i><font
face=Verdana><span style='font-family:Verdana'>Journal</span></font></i></cite>
reports, "That frugality has led to flat or declining sales in <st1:place
w:st="on">Europe</st1:place> for many drug companies." Drug companies are
offering such pay-for-performance deals rather than lowering drug prices
"in part because they are fearful of setting precedents that would cause
insurance payers worldwide to demand price cuts," according to the <cite><i><font
face=Verdana><span style='font-family:Verdana'>Journal</span></font></i></cite>.
<br>
<br>
For example, British officials last year declined to pay for the <a
href="http://www.jnj.com/home.htm" target="_new"><font size=3
face="Times New Roman"><span style='font-size:12.0pt;font-family:"Times New Roman"'>Johnson
& Johnson</span></font></a> blood cancer drug Velcade because it was not
determined to be cost effective. In response, J&J offered to reimburse the
country's national health service for treatments that were ineffective with
cash or replacement doses. The deal is expected to begin later this month. <st1:country-region
w:st="on"><st1:place w:st="on">France</st1:place></st1:country-region> also has
developed a pay-for-performance agreement with J&J and the country's health
care service said it has discussed such an agreement with <a
href="http://www.gsk.com/" target="_new"><font size=3 face="Times New Roman"><span
style='font-size:12.0pt;font-family:"Times New Roman"'>GlaxoSmithKline</span></font></a>.
<br>
<br>
However, such agreements have raised questions about how to determine whether a
drug is ineffective in a patient and merits reimbursement. In the <st1:country-region
w:st="on">U.S.</st1:country-region>, <a href="http://www.cigna.com/"
target="_new"><font size=3 face="Times New Roman"><span style='font-size:12.0pt;
font-family:"Times New Roman"'>Cigna</span></font></a> and <a
href="http://www.aetna.com/index.htm" target="_new"><font size=3
face="Times New Roman"><span style='font-size:12.0pt;font-family:"Times New Roman"'>Aetna</span></font></a>
are pursuing pay-for-performance programs with drug makers. <br>
<br>
Ed Pezalla, national medical director for <a
href="http://www.aetnapharmacy.com/AP/ihtAP/r.WSIHW000/st.35261/t.35261.html"
target="_new"><font size=3 face="Times New Roman"><span style='font-size:12.0pt;
font-family:"Times New Roman"'>Aetna Pharmacy Management</span></font></a>,
said, "I think there is definitely potential for (pay for performance) in
the <st1:country-region w:st="on"><st1:place w:st="on">U.S.</st1:place></st1:country-region>
as pharmaceutical companies recognize they may want to take some responsibility
for the claims they make on their medications." <br>
<br>
However, the <cite><i><font face=Verdana><span style='font-family:Verdana'>Journal</span></font></i></cite>
reports that it would be difficult to change <st1:country-region w:st="on"><st1:place
w:st="on">U.S.</st1:place></st1:country-region> pricing policies because many
drug companies already offer discounts and rebates based on sales volume. Thom
Stambaugh, chief pharmacy officer for Cigna, said the company has been asking
cholesterol drug manufacturers to reimburse the insurer if a patient taking the
drugs correctly still has a heart attack. No drug maker has agreed to such a
proposal. Stambaugh said, "We want them to put their money where their
mouth is" (Whalen, <cite><i><font face=Verdana><span style='font-family:
Verdana'>Wall Street Journal</span></font></i></cite>, 10/11). <o:p></o:p></span></font></p>
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font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Charlotte A. Smith, R. Ph., M.S., HEM</span></font><o:p></o:p></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>President</span></font><o:p></o:p></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>PharmEcology Associates, LLC</span></font><o:p></o:p></p>
<p class=MsoNormal><st1:Street w:st="on"><st1:address w:st="on"><font size=2
face=Arial><span style='font-size:10.0pt;font-family:Arial'>200 S. Executive
Drive, Suite 101</span></font></st1:address></st1:Street><o:p></o:p></p>
<p class=MsoNormal><st1:place w:st="on"><st1:City w:st="on"><font size=2
face=Arial><span style='font-size:10.0pt;font-family:Arial'>Brookfield</span></font></st1:City><font
size=2 face=Arial><span style='font-size:10.0pt;font-family:Arial'>, <st1:State
w:st="on">WI</st1:State> <st1:PostalCode w:st="on">53005</st1:PostalCode></span></font></st1:place><o:p></o:p></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>414-292-3959</span></font><o:p></o:p></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Cell 414-915-4026</span></font><o:p></o:p></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Fax 414-479-9941</span></font><o:p></o:p></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'><a href="mailto:csmith@pharmecology.com">csmith@pharmecology.com</a></span></font><o:p></o:p></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'><a href="http://www.pharmecology.com">www.pharmecology.com</a></span></font><o:p></o:p></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>H2E Champion for Change Award Winner</span></font><o:p></o:p></p>
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12.0pt'><o:p> </o:p></span></font></p>
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