Clinical Outcomes Will Set Heart Failure Drug Price

Moving away from the pay-per-pill standard, Novartis will attempt a new pricing model based on clinical outcomes for its widely anticipated chronic heart failure (HF) drug.

As the first potential drug in decades to treat HF with reduced ejection fraction, Entresto is expected to reach blockbuster sales volume and earnings.

Novartis’s motive to implement a clinical outcomes-based pricing model stems from its goal to reach as many patients as possible while acknowledging that the drug will be competing with relatively inexpensive—albeit less effective—older HF drugs.

Under this system, company division head David Epstein explained to Reuters that patients would get a discount for the drug upfront, but then pay more later if its use reduces hospital admissions and associated costs, as anticipated.

Entresto has already “produced very impressive improved outcomes in HF patients” in published outcome studies, Tom Frank, PharmD, BCPS, told Pharmacy Times in an exclusive interview.

The drug is “beyond what [clinicians have] been able to do previously with therapies that we have currently,” Dr. Frank said.

A drug-pricing model based on clinical outcomes is not without precedent. Novartis currently has such a system in place for one patient treated with its multiple sclerosis drug, fingolimod (Gilenya).

Applying the model to Entresto, however, is a significant move. At its launch, the drug’s price will drive up the cost of care for a significant amount of patients, but it has reasonable potential to reduce health care costs down the road.

“We are beginning to share the risk,” Epstein told Reuters.

While the exact structure of the payment model has not yet been decided, Epstein confirmed it will take into account potential cost offsets, such as fewer hospitalizations and increased quality of life.

Entresto is on track to receive FDA approval in August.