Novartis AG’s plan to link the payment for a new heart-failure treatment to the medicine’s performance is meeting skepticism from the largest manager of drug insurance benefits in the U.S.
Novartis said Wednesday that it plans to offer an outcomes-based plan for its newly approved drug Entresto. Insurers would initially pay a lower price, followed by an additional payment if Entresto succeeds in keeping patients out of the hospital and reducing associated costs. The drug could cost as much as $4,500 a year and would be taken daily for a patient’s lifetime.
The problem is that performance-linked prices are difficult to manage because so many things can affect a patient’s outcome, said Steven Miller, chief medical officer of Express Scripts Holding Co., which helps companies and insurance plans manage their prescription benefits.
“If patients on this new drug go out and have a salty pizza and end up in the emergency room, is that the drug’s fault or the patient’s fault?” Miller said by telephone. “If the patient isn’t adherent with taking the drug, is it the drug’s fault or the patient’s fault?”
The U.S. lacks infrastructure for data collection on patients, and it’s not clear who would be responsible for tracking their outcomes, Miller said.
“These are the discussions we’re having with Novartis -- how will we actually do this so it’s not burdensome for patients, payers and the pharma industry?” he said.
Miller remains enthusiastic about Entresto, saying it may be a “game changer for heart failure.” Express Scripts is in pricing conversations with Novartis, he said.
CVS Health Corp. is evaluating several pay-for-performance drug plans, said Christine Cramer, a spokeswoman for the second-biggest pharmacy benefit manager in the U.S.
“Given that each of these plans is unique, we evaluate each one based on what deal would deliver the most value to our clients and their members,” she said.
Novartis is still in pricing talks and can’t discuss details yet, said Eric Althoff, a spokesman.
“An outcomes-based approach is still aspirational, but not unrealistic,” he said. “While discussions have been encouraging, we’re in the early stages.”
Drugmakers could help create technology to gather data on outcomes, Althoff said. The company has acknowledged it may be difficult to get insurers to agree to its plan.
“We can’t make them do this,” David Epstein, head of the company’s pharmaceuticals division, told analysts Wednesday. “My guess is many won’t even want to bother, but it is part of the offering.”