Which Watches Have the Highest Value?

 

An avid watch collector in Atherton, California, Craig Duling runs the Heritagepocketwatch.com website. Through this online portal, Craig Duling provides his audience with information about some of the world’s rarest and most valuable watches.

The art of watch making has produced stunning timepieces that have attracted the eye of collectors across the globe. Some of the most impressive of these watches have sold for more than $1 million at prestigious auctions, making them the most expensive of their kind. Here are a few of the watches that have the highest net worth:

Vacheron Tour de l’Ile
Vacheron has been making watches for more than 250 years, the longest of any manufacturer. One of its most valuable pieces is the Tour de l’Ile, a watch that has two faces and numerous complications. Each of these features has contributed to its value of more than $1.2 million.

Patek Philippe Caliber 89
Worth $5.1 million, the Caliber 89 remains the single most complicated watch, with more than 30 complications. Even more impressively, the watch contains over 1,700 different components that combine to weigh in excess of two pounds. Patek Philippe staff spent a total of nine years researching and creating this unique timepiece.

Patek Philippe Supercomplication
Created on commission from Henry Graves Jr. in 1927, the Supercomplication was specifically designed to be the most complicated timepiece on Earth. The resulting pocket watch boasted 24 total complications, a golden frame, and two distinct faces. Eventually, the Supercomplication sold for $11 million in a Sotheby’s auction.

Gifting Luxury Watches

There are several momentous occasions in which finding the perfect gift can be a very tedious task. Weddings, graduations and milestone birthdays are some of these particular occasions. When considering buying a gift for one of these celebrations, it is often decided that a watch is the perfect gift. However, when gifting a watch, it is important that you follow some basic guidelines when selecting the perfect timepiece for the recipient. More information on watch gifting can be found here: Meaning of watch gifting

When gifting a watch for a graduation or wedding, it is important to make sure that you find a quality timepiece. If you simply buy an old watch, the watch loses sentimental value. It is important to remember that the watch you are gifting is likely to become a family heirloom that is passed onto future generations for the same occasion. Because of this, it is common practice to not just purchase a watch, but to uniquely customize the watch. Both a wedding and a graduation mark the end of one’s success and the beginning of a brand new adventure. So when creating this watch, be sure to do so with great care and thought.

Now when gifting a timepiece for a birthday, you do not just buy an ordinary watch, nor do you usually gift one for an ordinary birthday.  Both a wedding and a graduation mark the end of one’s success and the beginning of a brand new adventure.When your are giving a watch to someone on their birthday, it is usually a milestone birthday such as their 18th, 21st or 50th. When gifting on a milestone, it makes the present that much more spectacular. You also don’t want to give a brand new custom watch as you would for a graduation or wedding. Instead, it is usually customary to find a watch that was manufactured the year that the recipient was born. For example, if you are considering getting your grandfather a treasured timepiece on his 50th birthday next month, you would want to purchase a watch that was manufactured in 1967. A great example would be, the Oyster Perpetual Sea Dweller manufactured by Rolex in 1967. It is very important when purchasing an older watch to ensure that it is not a fake. You can find more information on how to identify a luxury watch here:

How To Recognize Fake Rolex GMT Master II

How to Recognize A Fake Rolex Yacht Master II

How to spot a fake Rolex Submariner

Spot a fake Rolex Submariner

rolex-submariner-51616156-5-2Let me begin by jumping right in and giving you a list of what to look for since this is why you chose to read this article.  At the end of this list please take time to read the article because it will help put the list in perspective.
An authentic Rolex Submariner model (newer model such as the 116610) should have the following.

  1. When you set the time and rotate the winding stem clockwise the hands should also rotate clockwise.  This should be the case for Rolex watches in general.  If the hands rotate counter clockwise you have a fake Rolex movement.
  2. When you pull out the winding stem the second hand should stop moving.
  3. When you rotate the bezel, there should be 120 clicks per 1 complete revolution.
  4. The Submariner has a sapphire crystal.  An easy way to determine if the crystal is sapphire is to place 1-drop of water in the center of the crystal and see if the drop remains in place and keeps its shape.  If it does, it is sapphire.  If the water drop spreads out flat and runs off the crystal it is not sapphire.  All Rolex watches have a sapphire crystal.
  5. The Rehaut is the name for the inner bezel.  This is a french word for flange. The inner bezel is the ring that separates the dial from the crystal.  If one carefully examines, with a loop, the word Rolex which is laser etched into the Rehaut the letters will be extremely smooth and sharp.  In a fake, the laser technology is too expensive to use and the letter engraving will appear to look slightly rough.
  6. At the 6 o’clock position on the underneath side of the crystal there is a Rolex crown symbol etched into it.  This micro-etching began in 2002. This will be almost impossible to see with the naked eye.  In an authentic Submariner you will need a magnifying glass to see it and even then one will need to angle the watch to just the right position. In fake Submariners you will easily be able to see it because the “knock-off” manufacturers don’t want you to miss it.  If it is easy to spot, you have a fake.
  7. Look at the Cyclops magnifying lens that envelops the date at three o’clock position. The true Rolex magnifies at two and a half times and has a definitive convex shape to it.
  8. The hour markers, hands, and the dot in the triangle on the bezel ALL should illuminate in the same teal color in the dark.  Hold your watch under a light (flashlight, table lamp, etc.) for a few seconds and then enter a closet and close the door and see if this is the case.  Many fakes use the cheapest hands they can buy and these hands can illuminate in many different colors.
  9. On the Submariner there should be 3 dots below the crown symbol on the winding stem.
  10. The edges of the bracelet links should be smooth and have no sharp edges.
  11. On the back of the case the protective plastic cover on the 116610 should be clear and not green.  This is assuming of course that the protective cover has not been removed.  Most fake manufacturers don’t realize that Rolex did away with the green colored cover and continue to use it.
  12. Finally, check out the caseback. Rolex doesn’t make a clear caseback that enables you to see the movement so if you turn a watch over and you have a clear window in which to observe the movement, you know it is a fake. Another caseback trick is that many fakes engrave the Rolex name and crown logo on the caseback. A true Rolex has no engraving on the back.
  13. An authentic Submariner with a stainless steel bracelet, with no links having been removed, will weigh 158 grams.
  14. A high-end fake may meet the above requirements except for numbers 5 and 10 so you still need to be very careful.
  15. There are many more things I could mention but I don’t want the counterfeiters to learn too much good information.  Remember that there are more fake luxury watches produced each year than authentic ones.  This is difficult to imagine but it is true because this is a BILLION dollar a year industry.

Full-length article can be found here: Heritage Pocket Watch How to spot a fake

Luxury pocket watches are back in fashion with collectors.

The fascination revolving around the Patek Philippe Henry Graves Supercomplication wasn’t just because of its record-breaking price or its calibre – the most complicated mechanical movement ever created – but also because of the provenance, legendary stories and a whiff of mystery. Fetching US$24 million at Sotheby’s Geneva sale in November last year, it holds the record for the world’s most expensive timepiece.

Roger Dubuis Excalibur Spider Pocket Time Instrument is a modern interpretation of the traditional pocket watch.

“It was such a significant and rare piece that got everybody talking,” says Sharon Chan, Sotheby’s head of watches for Asia. “[The sale] helped the pocket watch market too. We have more clients approaching us with beautiful pieces to sell, and we have noticed growing interest among collectors.”

The past year has seen the “Henry Graves effect” boost auctions and the retail market. Luxury watchmakers such as Vacheron Constantin, Officine Panerai, Roger Dubuis and Hermès have launched modern interpretations of pocket watches, catering to the surge in demand.

Vacheron Constantin launched its Reference 57260 pocket watch at Watches&Wonders in October in Hong Kong. The piece, not unlike the impressive Henry Graves Supercomplication, features 57 complications in celebration of Vacheron Constantin’s 260th anniversary. It took three master watchmakers eight years to create and is estimated to have a retail price of US$8 million.

Designs come in various materials, styles and forms. While the Reference 57260 adopts classic and traditional aesthetics, Roger Dubuis’ new Excalibur Spider Pocket Time Instrument falls on the futuristic end of the spectrum. The piece adapted the RD101 movement featuring four separate balance wheels first applied in the Quatuor wristwatch in 2013.

Vacheron Constantin artistic director Christian Selmoni reckons pocket watches are no less prominent than wristwatches. “There has been a lot of interest in the last 20 years concerning wristwatches, especially when it comes to complicated designs,” he says. “Vintage and classic pocket watches have driven less interest, but they represent a fascinating area in the world of watchmaking – beautiful designs, magnificent dials and some of the most complex mechanisms.”

Panerai’s pocket watch features modern materials such as ceramic.

Vintage and contemporary pocket watches are now becoming sought-after collectables as connoisseurs and collectors grow more knowledgeable about the history of horlogerie.

Vacheron Constantin’s pocket watch Referenece 57260.

“Collectors are awakening to the close ties between pocket watch movements and contemporary wrist mechanisms,” Chan says. “Many collectors started with wristwatches as they were easier to understand and more relevant to their lifestyle, but as they know more about timepieces and look back at the history of horlogerie, they discover the charm of pocket watches. The interest has been there even before the Henry Graves sale.”

Collectors are intrigued by the correlation between archival and contemporary models.

The launch of new models often fuels interest in vintage counterparts.

A. Lange & Söhne’s Grand Complication debut in 2013 – the most complicated wristwatch crafted by the maison – was inspired by a Lange pocket watch from 1902. It was through the restoration of the prominent pocket watch that Lange developed the know-how for its contemporary wristwatch.

Examples of how pocket watch movements inspired the designs of wristwatches basically chronicle the evolution of horlogerie.

Hermès’ In the Pocket was inspired by the “porte-oignon” given to Jacqueline Hermès by her father in 1912.

Philippe Delhotal, artistic director of La Montre Hermès, which developed the In the Pocket watch for this year’s Only Watch auction, agrees. “As long as creativity and innovation are present, these kinds of pieces in limited editions will continue resonating with collectors who wish to express something.”

David Ramsay’s Royal oval astronomical watch, featuring an engraved miniature portrait of King James I, will be available at Sotheby’s London sale on December 15.The origin of In the Pocket was inspired by the “porte-oignon” given to Jacqueline Hermès by her father in 1912 that allowed the avid horsewoman to fasten her pocket watch to her wrist. Sophisticated and savvy collectors have whipped up their appetite for retro and classic time instruments such as pocket watches and table clocks. “Those pieces have a truly intrinsic value that is highly appreciated when economic times are more challenging,” Delhotal says.

“Watches that show more distinctively stated luxury are becoming less interesting for customers. For collectors, it is also a more exclusive timepiece than a wristwatch.”

Looking beyond mere nostalgia, pocket watches also provide an alternate platform for high-end watchmakers to demonstrate their craftsmanship and innovation.

Selmoni says Vacheron Constantin’s Reference 57620 is particularly interesting as it offers the maison the possibility to demonstrate its technical know-how on a much larger scale.

The making of Hermès’ pocket watch at its atelier. Pocket watches comprise countless complications and require exquisite craftsmanship to manufacture.

“A pocket watch has more space for more complications,” Selmoni says. “We have incorporated more than 2,800 components in its movement, which is an incredible number of tiny pieces. We have had 260 years of non-stop operation. That’s why our made-to-order pocket watches perfectly embody our values in watchmaking – balanced design, mastered technique and ultimate craftsmanship.” Delhotal agrees. “Pocket watches offer a bigger surface of expression to showcase special craftsmanship and complications.”

Collectors are interested in high-jewellery pocket watches such as Cartier’s Elephant pocket watch.

While the platform might be centuries old, designers believe innovation sets modern pocket watches apart from their vintage counterparts.

“Pocket watches are a real form of art,” says Grégory Bruttin, movement director of Roger Dubuis. “Our Excalibur pocket time instrument strikes a balance between aesthetics and art. We also rendered the piece in its most modern form with titanium and the Quatuor movement.”

Often delivered in ultralimited editions, pocket watches are becoming coveted collectables.

“There has always been interest and there will still be room for [the development of] pocket watches,” Selmoni says. “They offer an alternative to wristwatches aesthetically and also from the watchmaking point of view.”

The latest developments in contemporary pocket watches are fuelling interest in vintage pocket watches at auctions.

Sotheby’s London auction on December 15 will feature an important private collection of English pocket watches. Titled “The Celebration of the English Watch”, the collection includes museum-quality timepieces such as the David Ramsay royal oval astronomical watch, which features an engraved portrait of King James I.

Chan says collectors should always consult experts and work with a budget before heading to auctions.

“Brands are important, but Patek Philippe isn’t the only go-to brand for pocket watches,” she says. “You can also look at Audemars Piguet and Bovet Fleurier. Be extra careful with white enamelling dials as they are often very delicate and fragile.”

Best States Tax Social Security Retirement Benefits

Build a sizable nest egg? Check. Purchase a new set of golf clubs? Check. Plan for taxes on your retirement income? Chhhh … Wait a minute. Plan for what?

Lots of retirees are surprised by the big bite that taxes can take out of their savings . And depending on where you live, the tax hit can be especially painful. In fact, some states even tax Social Security benefits , the most important source of income for many retirees.

The 13 states that tax Social Security are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont and West Virginia.

But just because a state taxes Social Security doesn’t mean it’s a bad place to retire. Overall, Colorado and West Virginia are actually tax-friendly places to live in retirement despite the tax on Social Security. Weigh a state’s entire tax picture — from income tax to sales tax to property tax — to better understand how your money will be taxed and how you can budget for those costs.

Kiplinger’s tax maps can help. Check out the most tax-friendly states for retirees and the least tax-friendly states for retirees to identify your best place for retirement.

Source: http://www.dailyfinance.com/2015/11/15/which-states-tax-social-security-retirement-benefits/

7 Financial Mistakes You Should Avoid in Marriage

Marriage is amazing.

That is, if all goes well. And many times, it doesn’t.

There are many issues married couples must deal with that singles don’t experience — and they aren’t simple issues to solve, either.

Think about it. When you want to buy that new car you’ve been eyeing since the fourth grade, you remember and think to yourself, “Oh yeah, I’m married. I just can’t go out and buy a car!” At least, if you’re an experienced married person, you won’t make the mistake of purchasing something big without talking with your spouse first. And that, can be complicated. Convincing your spouse isn’t always the easiest thing to do.

When you slip that ring onto their finger, it’s no longer all about “me,” it’s all about “we.” Unfortunately, many newlyweds aren’t truly ready for that level of commitment. So they learn as they go.

Whether you’re learning as you go, you’re doing well or you’re preparing for marriage, make sure you avoid these financial blunders in marriage.

1. Not creating and sticking to a budget. If you hear the word “budget” and cringe, don’t worry, you’re not alone. In fact, I hate budgeting. Why do I hate budgeting? It’s usually pretty boring.

Still, if you’re married, it’s absolutely necessary to budget in order to keep fights down to a minimum and to maintain one’s sanity. Seriously.

When your wife buys $500 worth of clothing in one day because you don’t work a budget together, and you get mad at her, how do you think she’s going to feel? After all, if that’s how she has always spent money, why should she do anything different?
Maybe your husband has been eyeing that new truck and decides to give it a test spin. The salesperson is good and your husband buys the truck because you aren’t working a budget with him. Similar scenario, but much more costly. Yikes.

You see, budgets keep both spouses on the same page regarding what should be spent and what should not be spent (and on what money should be spent on). Perhaps, for example, you and your spouse can agree to only spend $200 a month on clothing. Maybe you decide to only spend $600 a month on groceries. It could be that you decide to have some discretionary fun money that can be spent on whatever you each individually want.

As you start to budget together, you’ll find that many times having a budget frees you to spend money freely without hesitation — because it’s in the budget. This is very liberating — which is pretty profound as many people feel budgets restrict people instead of free them.

Learn how to make a budget that works and get to it. You’ll be glad you did.

2. Not communicating regularly about financial goals. Now, budgeting in a marriage lends itself to having a higher degree of communication about money, but it doesn’t necessarily help all the way.

That’s where communicating regularly about financial goals comes into play. In fact, when you’re creating your budget, you should also be budgeting for large purchases you may want to make (including a down payment on a home, saving for retirement or saving for your children’s college education).

If you’re not communicating with your spouse about what you want your lives to look like in 10, 20 or 30 years, what you’re really doing is leaving your future completely up to chance or up to whoever has the strongest will. Instead, talk about the future regularly and dream together about your goals and ambitions. By doing so, you’ll be able to build those goals into your finances and make them much more likely to be accomplished.

3. Maintaining debt because of a lack of contentment. There are a number of circumstances when incurring debt might be a reasonable option. There also might be circumstances when keeping debt around temporarily is reasonable as well. However, if you’re increasing your debt as a couple because of your lack of contentment (when you really should be content with what you have), there’s a problem.

This financial blunder can have devastating effects on a marriage. Why strain your marriage over debt when you don’t have to have debt? Do you really think that getting that fancy new car you can’t afford to gambling with your credit card is going to make you happy over the long-term? Forget about it.

Instead, find contentment. Don’t become materialistic.

4. Keeping separate bank accounts. This financial blunder should be a no-brainer — avoid it.

If you’re going to be working a budget together as you should, why keep your bank accounts separate? There should be no secrets in marriage. If you’re married, you should definitely have joint bank accounts. This will also put more pressure on both of you to work together toward your shared goals.

I realize that some people have separate bank accounts because perhaps one account is for the bills and another account is for one-time purchases. Why can’t both of these accounts be joint accounts?

Really, the way I see it, there’s no reason to have separate bank accounts. In marriage you’re one, and so should be your access to bank accounts.

5. Not having an emergency fund. Emergency funds play a critical role in financial plans. Should something happen to you, your spouse, your children, or your property, your emergency fund should help offset the financial losses.

Why is having an emergency fund particularly important in marriage? Some married people feel pretty comfortable not having much money in the bank. They simply trust that money will somehow always be around or that emergencies won’t happen to them. But here’s the thing: spouses of these people don’t always feel the same way.

Being on the brink of not being able to pay one’s bills sends some people’s stress levels into orbit. They can’t fathom being comfortable with $1,000 or $2,000 in the bank — they want more just in case.

And you know what? They’re right: a couple thousand dollars in an emergency fund isn’t nearly enough over the long-term.

Imagine getting into an accident where you hit a telephone pole and you don’t have collision coverage. Oops. Now you need a new car and you both figure you need to spend more than two grand for reliable transportation.

The big oops? You didn’t save enough money in your emergency fund. If you’re the spouse who felt comfortable with just a couple grand in the bank, imagine the look on your spouse’s face when they discover that there’s not enough money to pay for your accident.

6. Keeping important business decisions private. Your spouse should be involved in all aspects of your life — not just your personal life. If you’re planning on taking out a loan for your business, for example, you should definitely talk with your spouse first.

When I was thinking about signing up for a pricey business coaching program, I first asked my wife. Sure, she didn’t jump for joy and approve right away — but eventually she agreed and it proved beneficial to my business. Now, can you imagine if I would have just dropped over $7,000 on a coaching program without talking with her first? She wouldn’t have been happy, to say the least.

Talk with your spouse about your important business decisions before you make them.

7. Not forgiving financial mistakes. Yes, this, too, is a financial blunder.

When you first get on a budget together, do you really think you’re both going to abide by it with perfection? Hardly. It’s going to take some time to adjust to the new rules.

So when your spouse makes a mistake, don’t make the mistake of not forgiving their error. Don’t hold these things against them. Intentional deviation deserves a serious conversation (still with forgiveness), but unintentional mistakes deserve a try-harder-next-time-and-no-worries sentiment (along with forgiveness).

If you can’t forgive your spouse and you harbor anger, do you really think they are going to willingly work the budget with you or communicate about finances? Probably not. They’ll most likely want to hide. And that can be financially damaging, too.

Avoid these financial blunders in marriage, and you’ll be on a road not many travel — but boy will it be worth the effort.

Source: http://www.dailyfinance.com/2015/11/24/financial-blunders-avoid-marriage/

Shorts Subject

Here are some graphs from to the St. Louis Fed (the talk was trying to convince them to start a blog along the lines of what David Altig did in Cleveland, so the main theme was not the graphs below). The graphs show what happens to GDP after a financial crisis. In some cases the effects seem permanent, in others they appear temporary. What I’d like to do next is figure out if there are any systematic differences between the countries that experience permanent versus temporary effects that can be used to understand why they have such different outcomes. Is it the type of shock? The policy response? Institutional differences? And so on (source of graphs – the vertical blue line marks the start of the crisis):

US after the Great Depression
T02

Hong Kong
T16

Colombia
T03

Spain
T04

Sweden
T05

South Korea
T07

Philippines
T08

Indonesia
T09

Argentina
T10

Japan
T11

Norway
T12

Thailand
T13

Malaysia
T14

Finland
T15

One more note. If you had looked at this graph (from The Economist, the one on the left), you would likely conclude that the fall in GDP for Sweden is permanent:
Sweden and Korea
T06

That looks a lot like the US right now. But if you extend the graph for a few years, the picture changes dramatically:

SwedenT05

Is the US like Sweden? Or not?

 

Source: http://economistsview.typepad.com/economistsview/2012/03/permanent-or-temporary.html?cid=6a00d83451b33869e20168e92c5c1c970c

EQUINE RESCUE CENTER FOR HORSES IN NEED OF DONATIONS

California’s drought and the soaring cost of hay have led to a glut of unwanted horses. Animal advocates say many of those horses are being illegally sent to slaughter in other countries. A rescue group south of Hollister is trying to save as many horses as possible and they are asking for your help.

A 4-month-old colt named Tiko is one of 70 lucky horses now living at the Equine Rescue Center and Sanctuary. Tiko was born just a few weeks after his mother was rescued.

“The mom was headed to the slaughter house. She would’ve ended up in a France grocery store in shrink wrap,” Equine Rescue Center founder Monica Hardeman said.

But instead of being sold as horse meat, the mare ended up at the Equine Rescue Center and gave birth to a beautiful colt. This haven for neglected, abused and abandoned horses started five years ago and just moved to a larger home on 400 acres in San Benito County, south of Hollister.

Right now, the center is taking care of one donkey and about 70 horses. Many of the rescued horses are put up for adoption, but others, who are old or have serious health problems, will spend their golden years at the rescue center. The residents include a 37-year-old beauty named Sonny, who just loves having his back scratched.

Jacie Bradley of Hollister is adopting a blue-eyed horse named Rowdy. She said this is a wonderful place to find a horse because Hardeman knows so much about each animal’s needs and temperament. Adoption fees range from $500 to $2000 depending on the horse.

The generous donation needed to buy the new ranch came from Atherton investor Craig Duling.

The horses come from all over. They include Pickets, an abused horse rescued in Modesto and two 4-year-old fillies from Golden Gate Fields in Albany. Hardeman says the horses did not make the cut on the race track, but “would be great horses for showing or jumping or dressage.”

A lot of the horses at the center were rescued from auctions, where many end up being sent to other countries to be killed and eaten. That is illegal in the United States, but there is very little enforcement. So healthy, well-trained horses often get sold for next to nothing, then shipped to Mexico and Canada for slaughter.

Hardeman said the biggest reason people give up good horses is the cost. The price of hay has doubled in the last couple of years. “Especially in the Central Valley, people need to feed their families or feed their horse,” she said.

Hay is so expensive the rescue center is also struggling. The hay bill is a minimum of $8,000 a month, according to Hardeman. So that does not leave much money to pay the constant veterinary bills.

The center has an urgent need for donations to build shelters to create shade for the horses. There are four wells on the new property. So if the center can raise the money to put in irrigation lines, they can save a lot of cash in the future by growing their own hay.

Hardeman runs the center with help from her boyfriend Gabe Pimentel, along with a string of interns and volunteers. The only pay is a great experience.

“You learn a lot about the horses’ nature, how they act among themselves. I had no idea. I felt like I was waking up because I was blind before,” former intern Annika Seidler said.

Hardeman started the Equine Rescue Center after her sister was murdered. Horses helped her deal with the pain she felt and now she is giving back to them.

The Equine Rescue Center is a non profit and depends entirely on donations. They can only take in as many horses as they can afford to feed. They have a big fundraiser coming up in Woodside on October 4.

For details about contributing, volunteering or adopting a horse, click here.

 

Source: http://abc7news.com/news/equine-rescue-center-for-horses-in-need-of-donations/287552/

Risk-Based Pharmaceutical Contracting

Harvard Pilgrim Health Care has apparently struck a deal with Amgen for a risk-based contract for Repatha, the new cholesterol-lowering drug. Amgen provides a discount but also assumes financial risk if the HPHC members who take Repatha do not experience the cholesterol-lowering effects touted in the clinical trials. It has been observed that this adds a interesting layer of pay for performance to the roll out of this drug.

HPHC, which moves about 1.2 million lives, is old hat at negotiating discounts on pharmaceutical pricing, known for using the leverage of preferential formulary placement to play competing therapeutically equivalent drugs off of each other. Repatha and other drugs in the category of PCSK9 are targeted toward a sub-population of those with high cholesterol but they are spendy.

The real challenge is the prescribing protocol that HPHC will have to implement, reserving Repatha for only those enrollees who meet strict eligibility requirements, most likely including the requirements that step therapy with older cholesterol reducing drugs having failed and the beneficiary’s willingness to accept an injectable format. As intriguing as risk-based pharmaceutical contracting is, it has not been invented by this contract but, rather, has been in use for some time in the U.K.

Will American-style health care (even tightly managed American-style vertically integrated HMO health care ) be able to constrain use? That’s one risk I am pretty sure Amgen was not willing to bet the farm on, although the contract is reported to contain language accelerating increased rebates to HPHC the larger its enrollee pool using Repatha.

Source: http://www.marciarille.com/2015/11/risk-based-pharmaceutical-contracting.html