Drug maker Novartis plans to try a new pricing model with some healthcare customers when it launches its heart failure drug LCZ696, an angiotensin receptor neprilysin inhibitor (ARNI).
Novartis plans to try a new pricing model with some healthcare customers when it launches its heart failure drug LCZ696, an angiotensin receptor neprilysin inhibitor (ARNI).
LCZ696 (also known as Entresto), a twice-daily tablet, was shown to be superior to ACE-inhibitor enalapril on key end points in the largest heart failure study ever conducted. In PARADIGM-HF patients with heart failure with reduced ejection fraction (HF-REF) who were given LCZ696 were more likely to be alive and less likely to have been hospitalized for sudden deterioration of their heart failure than those given ACE-inhibitor enalapril.
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As reported by Reuters and FirstWord Pharma, David Epstein, division head, Novartis Pharmaceuticals, has suggested that some patients could initially receive the drug at a discount, with the price raised gradually if the drug is deemed to reduce the need for costly hospital visits. The plan would be for the customers to get the drug at a discount then pay Novartis more if (as it is expected) LCZ696 reduces hospital visits.
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Bill Shew, a principal at KPMG Strategy, believes that drug manufacturers are being confronted with significant push back about the value their treatments deliver.
“This is especially the case in conditions with many therapeutic options,” Shew said. “Not only do the treatments have to show clinical efficacy, but payers want the economics to make sense. Studies during drug development are now not only looking at certain clinical end points, but also at hospitalization rates and the total cost of care. And they are investing in ‘beyond the pill’ services and solutions to help payers and providers improve outcomes and lower costs. With this in mind, drug manufacturers are increasingly exploring innovative pricing models that share more of the risk but also the value of their medications.”
LCZ696 is expected to be approved in August.
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