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Novartis to Test New Pricing Model for Heart Failure Drug Entresto (Valsartan/Sacubitril)

FDA approval decision expected in August

Novartis plans to test a novel pricing model with some customers when it launches its new heart failure treatment Entresto, according to a report from Reuters.

Entresto, previously known as LCZ696, is an angiotensin receptor–neprilysin inhibitor (ARNi) consisting of Novartis’ well-known angiotensin receptor blocker valsartan (Diovan) and a new neprilysin inhibitor, sacubitril. The treatment is intended for patients with heart failure with a reduced ejection fraction.

How the product should be priced is a dilemma for Novartis, Reuters says, since the company knows it will be competing with cheaper –– although less effective –– older medications.

Novartis, along with other drug-makers, is considering the idea of moving from a simple pay-per-pill model to one based on clinical outcomes. Novartis already has such a system in place for a customer using its multiple sclerosis drug Gilenya (fingolimod).

Entresto could be an important test case, however, because the drug will hike immediate drug costs markedly for a large number of patients, while offering the potential to reduce their long-term medical bills.

The issue of drug pricing came to a head recently after the launch of expensive new medications for cancer and hepatitis C, which are straining health care systems and adding to co-payment costs for patients.

Entresto received a “priority review” designation from the FDA in February 2015. According to Novartis, the drug is on track for potential approval in August. The company expects Medicare to restrict the drug’s use for about 6 months after its launch.

Sources: Reuters; June 30, 2015; and BusinessWire; July 31, 2013.




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