How to prep for a 'megablockbuster' launch? Novartis lines up cost-savings data

Here's the shape of pharma marketing to come. Months before Novartis ($NVS) can ask the FDA to approve its "megablockbuster" heart failure drug, the company is trumpeting new data--not on efficacy or safety, but on cost.

Basically, the experimental med cut ER visits by 30% and reduced hospitalizations by 16%, compared with an older standard treatment, elanapril. The LCZ696 patients who did find themselves in the hospital were less likely to end up in intensive care, and much less likely to need intravenous drugs. Percentage-wise, that was 18% fewer ICU stays and 31% less need for IV meds.

No need to spell out the hefty cost savings from reducing ER visits, hospital stays and particularly, jaunts into the ICU.

Novartis pharma chief David Epstein

Analysts figure that Novartis could price this heart failure pill at $7 per day, a big premium over cheap generics. But if insurers can save tens of thousands--even hundreds of thousands, for ICU patients--then $210 for a 30-day supply looks even cheaper. No wonder Novartis pharma chief David Epstein says the drug "will possibly be the most exciting launch the company has ever had."

This data isn't just aimed at regulators, though it does fortify the Novartis case for LCZ696 as a heart failure drug that works--and works very well. It's primarily aimed at payers, who are increasingly looking askance at high-priced meds. Companies that can justify their prices, using cold hard data, have a better shot at winning reimbursement and favorable spots on various formularies.

This is the same reason Pfizer ($PFE) is conducting an outcomes trial on its PCSK9 cholesterol drug bovicirumab. It's why U.K. cost-effectiveness watchdogs recommend that pharma companies start making a case for coverage long before their new meds are approved. In fact, it's the same reason why experts have been talking about pharmacoeconomics for years.

The Novartis cost analysis, along with a few other current examples, show that at least some drugmakers have been acting, rather than just pontificating. More might be inspired if Novartis charges into the heart failure market as analysts expect. Peak sales estimates range up to $10 billion.

- read the Novartis release

Special Reports: Top 10 pharma companies by 2013 revenue - Novartis | Top 10 cardio drugs of 2012

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