Live, or Die Free

Johnson & Johnson has proposed that Britain’s national health service pay for the cancer drug Velcade, but only for people who benefit from the medicine, which can cost $48,000 a patient. The company would refund any money spent on patients whose tumors do not shrink sufficiently after a trial treatment.

The groundbreaking proposal, along with less radical pricing experiments in this country and overseas, may signal the pharmaceutical industry’s willingness to edge toward a new pay-for-performance paradigm – in which a drug’s price would be based on how well it worked, and might be adjusted up or down as new evidence came in.

More here.  Contingency fees for doctors and pharmaceutical companies are a very good idea (one I have long supported).  For more see Hyman and Silver’s excellent paper.