Novartis priced Entresto on par with results, new cost watchdog says

A new U.S. cost-effectiveness watchdog has now weighed in on three of the most hotly anticipated drug launches of 2015. And so far, pharma has scored just one out of three.

Last week, the Institute for Clinical and Economic Review (ICER) said Amgen ($AMGN) on the one hand, and Sanofi ($SNY) and Regeneron ($REGN) on the other, had vastly overpriced their cholesterol-fighting PCSK9 drugs. To match their benefits, the cost of Repatha and Praluent should be about two-thirds less than their list prices of $14,000-plus per year, ICER's report said.

Not so much for Novartis ($NVS) and its new heart failure drug Entresto. The Swiss drugmaker's $4,600-per-year price tag is "well-aligned with the degree of benefit it brings to patients," the institute said in a statement about its new report. That means, ICER says, that Entresto is "cost-effective" in the long term, judged according to "commonly accepted" benchmarks.

That's what the Swiss drugmaker sought to prove when it studied Entresto in clinical trials. Novartis designed late-stage research to not only show that the drug worked, but also that it worked better than currently available standard therapy. The company hopes its outcomes data can show payers that Entresto may cost a lot more than previously used meds, but that it could save them money on hospitalizations and other complications.

ICER isn't so sure about the savings, despite its thumbs-up on the cost-effectiveness side. And the group does think Entresto is a bit overpriced when considered in the context of its overall cost to the healthcare system. With nearly 2 million patients set to start the drug over its first 5 years on the market, the budget impact would be significant. And so ICER figures that a $3,779 annual cost for Entresto--about 17% off its list price--would be more in line.

And as ICER notes, that's not outside the realm of the usual price break U.S. payers can achieve. "Private insurers and Medicaid programs are frequently able to achieve discounts at this level," the group said in its statement.

By contrast, ICER took a far dimmer view of PCSK9 meds and their potential burden on the healthcare system. After crunching the numbers on Repatha and Praluent's costs, benefits and likely uptake among patients, the institute concluded that the meds would need to run about 85% less than their list prices to be a reasonable burden on the healthcare system.

Novartis, Amgen, Sanofi and Regeneron will have their chance to respond to the ICER analyses. In Entresto's case, the ICER report will be open for public comment till Sept. 25. A revised draft will be up for debate Oct. 29 by cost-benefit analysts at the California Technology Assessment Forum. At a public meeting, the panel will discuss ICER's evidence and vote on Entresto's effectiveness and value.

- see the ICER release

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