A new approach for how payers reimburse for drugs is gaining traction. Merck (NYSE:MRK) became the latest to jump on board. The drugmaker forged a pay-for-performance deal with Aetna for diabetes drugs Januvia and Janumet. But could this trend wind up costing biotech investors lots of money?
Pay for performance
The idea behind pay-for-performance drug pricing is just what the name implies. Instead setting a price for a given drug, a biotech or pharmaceutical company would receive payment based on how well the drug controls or cures the targeted indication.
