Novartis Sets Performance-Based Price for Heart Drug

Entresto must replicate clinical trial results

Cigna Corp and Aetna have made deals with Novartis for a performance-based price for the new heart drug Entresto, according to a Reuters report. Cigna said its payments to Novartis will be linked to how well the drug improves the relative health of Cigna customers. Specifically, Cigna said payments will be based on a reduction in the proportion of customers who are admitted to hospitals for heart failure.

Aetna announced that it had signed a value-based agreement with Novartis that is predicated on Entresto replicating results that it had achieved in clinical trials. In studies, treatment with Entresto reduced hospitalizations and cut the rate of cardiovascular death associated with heart failure.

Entresto is a combination of sacubitril, a neprilysin inhibitor, and valsartan, an angiotensin II receptor blocker, indicated to reduce the risk of cardiovascular death and hospitalization for heart failure in patients with chronic heart failure (New York Heart Association class II–IV) and reduced ejection fraction.

Entresto, which costs approximately $12.50 a day, or $4,560 per year, was approved by the FDA in July 2015. It is less expensive than some other heart drugs but costs more than analysts expected. The Boston-based Institute for Clinical and Economic Review, an independent group that analyzes drug prices, has said the price should be 17% lower, according to Reuters.

Drug prices increased by about 13% in the U.S. last year, spurring a public outcry and moving the issue onto the campaign platform of Hillary Clinton and other U.S. presidential candidates for the November 2016 election.

In January, Republican contender Donald Trump said that, if elected, he would let Medicare negotiate drug prices, claiming that the policy would save $300 billion a year.

Allowing the government to negotiate drug prices is a position other Republicans and the pharmaceutical industry strongly oppose. The U.S. is banned from such a provision under the 2003 Medicare prescription drug law, although in other developed countries governments regulate drug prices and spend less on medications.

Sources: Reuters; February 8, 2016; and U.S. News & World Report; January 26, 2016.