Deals Of The Week: Baxter/Baxa, Par Pharmaceuticals/Anchen, Sanofi/Universal Medicare
Each week, “The Pink Sheet” presents commentary on some of the week’s most interesting business deals, contributed by the editors of the IN VIVO blog. Visit the blog at http://invivoblog.blogspot.com.
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Now that Seattle Genetics Inc. is making the transition into a commercial drug company with the FDA approval of its oncologic Adcetris, its success will depend on how effectively it can convince payers, patients and physicians that Adcetris is worth its premium price and how well it can extend the drug’s reach to larger patient markets.
Although stakeholders are interested in value-based models that link a drug’s performance to emerging evidence of improved patient outcomes, such agreements are difficult to implement and too limited in scope to drive a shift to value-based reimbursement. The authors suggest a new, structured approach to bring these contracts into the mainstream, thus transforming product reimbursement and fueling the shift from volume to value.
The current unit-based pricing model for drugs is too one-dimensional for the market's present needs. Pharma firms must identify products that will benefit from innovative pricing models, and then forge the types of collaborations that will support those models.