Novartis CEO: The racehorse drug launch is over in the U.S.

Novartis Entresto packaging

Beware the U.S. drug launch. That’s the word from Novartis CEO Joe Jimenez, whose much-anticipated Entresto rollout started with a whimper rather than a bang stateside.

So far, the heart failure drug has sold much more quickly in Europe, where data from an outcomes trial have done their work. The trial, which showed Entresto could save healthcare systems money by preventing hospital stays, has convinced payers in EU countries--but in the U.S., insurers and pharmacy benefits managers are holding back.

That’s an ironic twist in an industry where the wide-open U.S. market has been a staple of pharma sales growth for decades. Pricing power in the states has been all but taken for granted, and U.S. premiums still help make up for cheapskate reimbursements elsewhere.

Don’t count on it going forward, however, Jimenez told the Financial Times. Steep launch trajectories are a thing of the past.

“It’s going to be a fact of life that we have to accept a slower uptake,” Jimenez said to the London newspaper. “We are just not going to see the hockey-stick shape we had in the 90s and 2000s with thousands of sales reps in the US. The model has changed and it will take longer to get up and running.”

No one knows that better than Jimenez these days. In Entresto, Novartis thought it had a certain “megablockbuster” and figured on its most impressive launch in many years. But as of the first quarter of this year, the drug is still flailing, with just $17 million in sales and continued reluctance among U.S. payers.

The Swiss drugmaker is amping up its U.S. marketing efforts with new direct-to-consumer advertising campaign and a detailed push with its newly retrained sales force. 

In a way, it makes sense that Entresto’s cost-saving data is playing better in Europe. Single-payer healthcare systems can take a longer-term outlook. Shelling out the $4,500 per year for Entresto now means they’ll save money down the line, provided it works as trial data suggest. In the U.S., there’s a constant churn in coverage, with employer-funded plans and Medicare beneficiaries shifting from one plan to another to another. One insurer might foot the bill for the drug now, only to lose the savings to another insurance company when the patient moves to another insurer in a couple of years.

Plus, U.S. payers are newly emboldened to push for better prices on drugs. Amid political pressure on pharma pricing and high-profile public debates over expensive drugs, insurers are twisting arms for formulary positioning and erecting prior authorization hurdles to limit coverage to patients who meet very specific criteria--and whose doctors do the paperwork to prove it.

Meanwhile, Novartis’ efforts to strike pay-for-performance deals on the drug in the U.S.--where insurers get higher rebates if Entresto doesn’t perform as anticipated--have yielded fewer such arrangements than Novartis might have hoped. Cigna and Aetna did jump on that bandwagon recently, with pilot programs on the drug at each insurer.

Jimenez says that he’s still bullish on Entresto’s long-term prospects. Novartis sees peak sales of $5 billion even after the drug’s slow start. The company expects $200 million this year.

- see the FT story (sub. req.)

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It's not just payers waiting on PCSK9 outcomes data. Doctors are holding back, too