News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Examples already exist of manufacturers agreeing to refund payments if their therapeutic drugs don’t benefit patients; Medical laboratories with proprietary tests may find this strategy effective at guaranteeing the clinical utility of their assays

If their medical devices, medical laboratory tests, or prescription drugs are not effective, will payers, patients, and doctors get refunds from the manufacturers of these products? Some experts predict that the increased emphasis on improved patient outcomes, and the need for healthcare enterprises to back up the clinical value of their services, could lead to money-back guarantees and reimbursements for treatment therapies.

Offering a refund for services if the patient does not benefit is a powerful and compelling way for a company to call attention to its confidence level in its products and services.    

Curing “Bubble-boy” Disease

One recent example is GlaxoSmithKline (GSK), which recently announced it will offer a money-back guarantee in Europe for a gene therapy known as Strimvelis. This is a stem cell treatment for patients with Adenosine Deaminase Deficiency, also known as ADA Deficiency (ADA-SCID), or “bubble-boy” disease.

ADA-SCID is an extremely rare disorder caused by the absence of adenosine deaminase, an essential protein that is required for the human body to produce lymphocytes, which are a sub-type of white blood cells. Patients born with ADA-SCID are unable to develop a healthy immune system, rendering them unable to stave off common infections. This can result in life-threatening illnesses.

Estimates are that ADA-SCID occurs in less than one in 100,000 births worldwide, appearing in approximately 15 patients annually in Europe. Without treatment, the disorder is typically fatal within the first few years of life.

An Expensive Cure

Strimvelis was developed at the San Raffaele Telethon Institute for Gene Therapy (SR-TIGET), a joint operation by Ospedale San Raffaele (OSR) and Fondazione Telethon (Telethon). It was then brought to market by GSK through a strategic collaboration formed in 2010 between GSK, OSR, and Telethon.

In research into the long-term efficacy of the treatment, 15 of 18 patients required no additional treatment to be symptom-free, according to a Telethon Institute press release. Effectively, they were cured.

Strimvelis works by using a virus to add a missing gene to the bone marrow of patients affected with ADA-SCID. However, the therapy comes with a hefty price tag. At 594,000 Euros or $665,000 US, it is one of the costliest one-time treatments ever marketed by a pharmaceutical company. The traditional methods for treating ADA-SCID are bone marrow transplants and enzyme injections, which can also cost in the hundreds of thousands of dollars.

Insight versus Profits

The treatment is currently only offered in Milan, Italy. Patients and their families must travel there to receive the therapy. It does, however, come with a money-back guarantee. “The drug has to deliver what you say or we don’t pay,” declared Luca Pani, MD, Director General of the Italian Medicines Agency (AIFA) in an MIT Technology Review article. The AIFA set the price and terms during negotiations with GSK. “If it does not work, they will return the money,” Pani stated.

Luca Pani, MD (above), Director General of the Italian Medicines Agency (AIFA), speaking at the 1st WAidid Congress in Milan, Italy, about the AIFA’s mission to seek new drug approvals for both patients and healthcare providers. (Photo copyright, YouTube.)

Luca Pani, MD (above), Director General of the Italian Medicines Agency (AIFA), speaking at the 1st WAidid Congress in Milan, Italy, about the AIFA’s mission to seek new drug approvals for both patients and healthcare providers. (Photo copyright, YouTube.)

GSK will keep track of Strimvelis patients and the treatment success in a registry. Data collected thus far indicates that GSK will probably have to refund the cost of about one in six treatments. The company stated in the MIT Technology Review article that it will not make much money off Strimvelis, but that it hopes to gain valuable experience and insight into treatments involving cells and genes.

More Examples of ‘Cured or Your Money Back’ Treatments

Other pharmaceutical companies have offered similar refund policies if their product proves to be ineffective for certain patients.

Johnson and Johnson has a similar scenario in Great Britain concerning the drug Velcade, which is used to treat multiple myeloma, a cancer of the plasma cells. Patients who experience slight or no improvement on Velcade will be weaned off the drug and receive a full refund for the costs associated with the treatment.

In addition, there are four known situations that occurred in the United States where drug manufacturers offered reimbursements if a therapy did not work for a patient.

In 1998, Merck refunded up to six months of costs for Simvastatin, a cholesterol-lowering therapy, if the drug failed to lower LDL cholesterol levels to a target determined by the patient’s healthcare professional. This program has since been discontinued, but was one of the first such money-back guarantees offered in the US for a drug therapy.

In 2007, UnitedHealthcare reimbursed costs associated with the Oncotype DX test for 18 months, while the effectiveness of the test was monitored. This genomic test analyzes breast cancer cells to determine how the cancer is likely to act, and which therapy or combination of therapies will be most beneficial for the patient. If the number of women who needed chemotherapy exceeded a certain number, a lower price was negotiated for the test.

In 2009, two companies that sell the drug Risedronate, marketed as Actonel, agreed to reimburse insurer Health Alliance for non-spinal fractures experienced by patients while taking the drug. Proctor and Gamble and Sanofi-Aventis entered into the agreement for Actonel, which is used to treat osteoporosis and strengthen bones.

In a 2009 collaboration, Merck agreed to provide CIGNA with lower prices for two of their diabetes medications if patients with type 2 diabetes attained success with reducing blood sugar levels while on the medications. CIGNA was offered further rebates if blood sugar levels continued to decrease while on the drugs. The medications involved in this reimbursement scheme were Sitagliptin, marketed as Januvia, and Sitagliptin/Metformin, marketed as Janumet.

In the future, it is probable that more money-back guarantees for therapies, drugs, medical laboratory tests, and medical procedures will emerge as developers feel the need to demonstrate value. Displaying confidence in their products can only strengthen their public image and trustworthiness.

—JP Schlingman

Related Information:

Gene-Therapy Cure Has Money-Back Guarantee

Paying for Outcomes: Innovative Coverage and Reimbursement Schemes for Pharmaceuticals

Drug Company Offers to Refund (NHS) If Drug Ineffective!!!

Performance-Based Risk-Sharing Arrangements for Drugs and Other Medical Products

Get Your Money Back If Pricey New Gene Therapy Doesn’t Cure You

Gene Therapy Recovery Drug for $665,000 Offered with Money Back Guarantee

Procter and Gamble, Sanofi-Aventis Sign Actonel Deal with Health Insurer in US

Health Alliance Announces Promising Nine-Month Results from First Ever Outcome-Based Reimbursement Program for Actonel (risedronate sodium) Tablets

CIGNA-Merck Outcomes Contract Hailed as ‘First Step,’ But Some Want More Data