Novartis signs on to value-based pricing for Entresto

May 4, 2016

Hospitalizations represent up to 80 percent of the direct medical costs of heart failure; reducing heart failure hospitalizations can help bring down overall healthcare costs.

Cigna and Aetna Inc. have come to an agreement with Novartis for a performance-based price for its heart failure drug, Entresto.

Related: Heart failure drug poised for new pricing model

Entresto, a tablet taken twice daily, is in a new class of medication calledangiotensin receptor neprilysin inhibitor (ARNI). The FDA views Entresto as containing the neprilysin inhibitor, sacubitril, which is a new molecular entity, and the angiotensin receptor blocker (ARB) valsartan. It was approved for heart failure patients with reduced ejection fraction (HFrEF) based on the PARADIGM-HF trial.

“The agreements use heart failure hospitalization as an outcome measure, based on the FDA-approved label,” says Michael Billings, Novartis spokesperson. “Novartis will reduce the price of Entresto to payers, if the rate of heart failure hospitalization of patients on Entresto exceed a pre-specified threshold.”

Vogenberg

“Outcome or performance-based contracting continues to gain traction even though we remain in a transitional marketplace that is generally chaotic across all stakeholders,” according to Randy Vogenberg, PhD, partner, Access Market Intelligence, and cofounder National Institute of Collaborative Healthcare, Greenville, S.C.

“Health plans as well as PBMs remain focused on clinically driven outcomes that may work in some insurance segments but not necessarily all,” he says. “The risk being leveraged in such contracting remains focused on the cost of drug.” 

The National Heart, Lung and Blood Institute reports 5.7 million Americans have heart failure.

Patients need access to innovative medicines, and we are committed to doing our part,” says Billings. “Outcomes-based contracting models are a potentially promising way to support access while demonstrating the real-world benefits of innovative medicines. We believe these agreements are good news for patients.”

Because Entresto will have preferred-formulary tier status, patients in these plans will likely have reduced out-of-pocket costs for Entresto, according to Billings.

In the largest clinical trial ever conducted in heart failure, PARADIGM-HF, Entresto demonstrated superiority to ACE-inhibitor enalapril, reducing the risk of heart failure hospitalization or cardiovascular death by 20%.

A post-hoc analysis revealed that Entresto substantially reduced 30-day hospital readmissions compared to enalapril among heart failure patients with HFrEF. For the analysis, presented at the American Heart Association’s Scientific Sessions in November 2015, researchers assessed the rate of hospital readmission for any cause following a hospitalization for heart failure in the PARADIGM-HF trial. They found that 44% fewer patients treated with Entresto were readmitted for heart failure, and 36% fewer patients were readmitted for any cause, within 30 days following a heart failure hospitalization compared to those on enalapril.

“The significance is that this may correlate with improved patient prognosis and lower costs to the healthcare system, thus helping to reduce the health and economic burden associated with this condition,” according to Billings.

Heart failure accounts for more than 1 million hospitalizations in the U.S. each year, according to a recent American Heart Association policy statement, and hospitalizations account for almost 80% of the nearly $21 billion spent on direct medical costs of heart failure, according to a study in Circulation. Currently about one in four patients is readmitted within 30 days of a hospitalization for heart failure. Notably, heart failure patient readmission rates are a key predictor of patient outcomes and are used by CMS as an indicator of hospital performance.

Next: PARADIGM-HF analysis

 

 

An additional analysis of PARADIGM-HF, presented at the American College of Cardiology Scientific Session in early April, further underscores the benefits of Entresto with regard to heart failure hospitalization. The analysis found that Entresto reduced cardiovascular death or hospitalization for heart failure, consistently benefitting HFrEF patients regardless of prior heart failure hospital admissions or background therapy.

Related: Payer issues with new heart failure drugs

“Payers are demanding evidence of real-world value of pharmaceutical products,” says Billings. “We continue to work collaboratively to identify viable new approaches to improve patient outcomes, and are confident in the potential for Entresto to deliver significant benefits to patients as well as the healthcare system.”

The Centers for Medicare and Medicaid Services (CMS) has established aggressive goals to have 50% of Medicare payments processed through alternative payment models by 2018. Individual stakeholders, such as the Institute for Clinical and Economic Review (ICER), are evaluating the clinical effectiveness as well as the cost effectiveness of drugs.

“Provider organizations are looking at evidence-based, standardized treatment protocols that emphasize the most cost-effective treatment options,” says Billings. “Further, providers are being incentivized/penalized for care outcomes so they need quality therapeutic options to treat diverse patients.”

In the United States, the wholesale acquisition cost [WAC] of Entresto is $12.50 a day, according to Billings. “This is in line with other cardiovascular therapies and well below other recently launched life-saving products for other diseases,” he says.

Currently, more than 90% of all eligible patients have coverage for Entresto from their health insurance providers. “Of these patients, many pay no more than $10 out of pocket while out-of-pocket costs for the rest range from $25 to over $100,” says Billings.

For patients whose health plan has not yet made a decision on coverage, or for patients who need assistance with out-of-pocket costs, Novartis offers an extensive patient support program that includes a 30-day free trial offer for Entresto, and a $10 copay card for patients with commercial insurance.

“We also give healthcare providers samples that they can use to start a patient on therapy, to determine if the medicine is right for the patient,” says Billings. 

Novartis says that it has several similar agreements in different therapeutic areas. However, details of these agreements are confidential.

“We believe the time is right, and will continue to work with customers to identify new approaches that can help improve patient outcomes,” says Billings.

In the commercial marketplace of employers, municipalities and unions, outcomes need to be balanced in both economic and clinical domains while demonstrating an ability to improve population health, Vogenberg says.

“Heart failure patients can be found in both commercial and public sector programs, such as Medicare,” he says. “Such patients are the same in both public or private sector plans, but benefit coverage is not nor is the definition of success in having health insurance coverage.”