Drug prices are out of control. No big secret there. With so many options out there for any given health condition, a wrong choice can end up being an enormously expensive test. Health insurance companies would be glad to know that if a drug didn’t work, the bill would be substantially less, and a client could move on to another drug without a huge trailing cost.

Some drug companies are willing to put their money where their mouth is. If a drug works, you pay for it. If it doesn’t, you don’t. Johnson and Johnson has proposed that a cancer drug that has a $48,000 a year price tag will only be charged for if it works. Several companies that offer multiple sclerosis drugs that can cost as much as $18,000 a year have agreed to substantially lower the cost if the results aren’t positive.

This is obviously great news for patients and health insurance companies, but I believe it will have long term implications in life insurance as well. When a person isn’t so beaten down by the cost of failed treatment, they are more likely to move on to a new treatment. If the new treatment works, mortality is improved. Should be better for life insurance prices.

Bottom line. In the fight with any kind of disease, good news is good news. I hope this performance based pricing is here to stay.

This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.

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