Getting cancer is bad enough. The high price of treatment makes it even worse. Some drugs cost tens of thousands of dollars a month, and there is no guarantee that they will work.
Italy’s state-run health service is asking pharmaceutical companies for money-back guarantees if their drugs don’t work. In 2015, it collected €200 million ($220 million) in refunds.
Since 2005, a national registry has been tracking treatments and outcomes. The Italian Medicines Agency makes use of the data for its pay-for-performance deals with pharma companies. If a drug isn’t performing as well as was promised, the agency will pay less money for its use.
“In oncology, you would be foolish as a manufacturer to go into Italy without one of these schemes,” Robert Dumitrescu, a consultant to drugmakers at Simon-Kucher & Partners, told Bloomberg.
Such deals can be a win-win for both parties. The health agency can get experimental drugs at lower costs and pharma companies can skip expensive large-scale trials to prove a drug’s effectiveness in great detail before it goes to market.
Other countries, such as France and the UK, have tried similar pay-for-performance models, but none at the same scale as Italy. The process, inevitably, adds bureaucratic costs. But if the benefits are shown to outweigh the costs, more countries could be keen to adopt similar systems. “You can pilot something in one not-too-big market and then if it works you can roll it out to other markets,” Morris Hosseini, a partner at consultancy Roland Berger told Bloomberg.
In many cases, cancer drugs are growing increasingly unaffordable for patients and national health systems. Last year, the UK’s National Health Service was forced to forgo many life-extending cancer drugs due to spiraling costs. Global spending on cancer drugs is set to rise to $100 billion in 2018, up from $65 billion in 2013, according to IMS Institute for Healthcare Informatics. That’s why Italy’s experiment will be closely watched by cash-strapped health services, and hopeful patients, around the world.