NEW YORK, April 23 Drugmaker Merck & Co (MRK.N)
will give discounts on its diabetes drugs to Cigna Corp (CI.N)
if the health insurer's diabetic members stay on their
medicines and show improvements in their blood-sugar levels,
under an agreement announced on Thursday.
The deal comes as the industry and U.S. government grapple
with new ways to combat chronic disease and its enormous
Cigna, one of the largest U.S. health insurers, said the
deal represented its first such performance-based contract with
a pharmaceutical company.
"A drug manufacturer is recognizing work that we do to move
adherence and is improving discounts as adherence is improved,"
said Eric Elliott, president of Cigna's pharmacy benefit
Keeping patients on their medicines is a major issue for
diabetics, whose symptoms may be mild but who can face serious
complications such as kidney failure and heart problems if not
The agreement involves Merck's Januvia and Janumet, two key
growth products for the drugmaker that are used to control
blood sugar in adults with Type 2 diabetes, the far more common
form of the disease.
Under the agreement, Merck will provide discounts on
Januvia and Janumet to Cigna if a greater portion of the
insurer's diabetic members reach blood-sugar goals, even if the
patients are taking drugs other than Merck's.
Cigna will also receive discounts if patients do better at
staying on Januvia and Janumet.
Cigna has assigned the two Merck drugs preferred status on
its drug coverage lists, meaning co-payment levels are
generally $20-$25 less than brand drugs without such preferred
Cigna applies a range of programs to help patients improve
compliance with their medicines, including phone calls to
patients to see why they are failing to take their treatments.
The insurer says its medicine adherence programs have
helped diabetics reduce emergency room and other hospital
visits by 50 percent for those reaching blood-sugar goals, and
reduced diabetes-related costs by 24 percent.
Elliott said Cigna is in advanced discussions on three
other performance-based contracts.
"We think the announcement of this contract will create its
own momentum," Elliott said.
(Reporting by Lewis Krauskopf; Editing by Richard Chang)