Entresto’s U.S. list price, also known as its wholesale acquisition cost, is $12.50 a day, or about $4,560 a year per patient. Some analysts have estimated the drug eventually could generate more than $6 billion in annual global sales.
The Boston-based Institute for Clinical and Economic Review issued a report saying Entresto’s list price fairly reflects the clinical benefit it provides over older treatments for heart failure, which it said means the drug can be considered “cost-effective.” But ICER also predicts that nearly two million U.S. patients could be prescribed the drug in its first five years on the market, which would create “a budget impact so high” that it would place excessive cost burdens on the overall health-care system.
“It tips over our threshold for too much of a budget impact to keep overall health-care cost growth in line with the national economy,” Steven Pearson, a physician and president of ICER, said in an interview Friday.
To curb that budget strain, ICER says Entresto should cost about $3,780 a year, or 17% less than the list price. Dr. Pearson said insurers and other payers may be able to secure such discounts in negotiations with Novartis.
Earlier Coverage
- Doctors Object to High Cancer-Drug Prices (July 23)
- New Class of Cholesterol Drugs Should Cost Much Less, Report Says (Sept. 8)
- Pharmaceutical Companies Buy Rivals’ Drugs, Then Jack Up the Prices (April 26)
- FDA Approves Novartis’s Heart Failure Drug (July 7)
- Rising U.S. Drug Prices Are Focus of Research Grant (July 21)
The U.S. Food and Drug Administration approved Entresto, a tablet taken twice daily, in July. A clinical trial showed it reduced the risk of death and hospitalization from heart failure versus another drug, enalapril. Side effects included low blood pressure and kidney impairment.
A Novartis spokeswoman said the company is “pleased that ICER found Entresto to be cost-effective” and that the company believes it has set a fair price in line with the value for patients and the overall health-care system.
The company previously has said it is open to contracts with insurers and other health payers to link the drug’s price to outcomes such as whether it reduces the rate of heart-failure hospitalizations among patients who take it.
ICER recently expanded its research into the cost-effectiveness of new drugs thanks to a $5.2 million grant from the Laura and John Arnold Foundation. ICER’s reports have been drawing increasing attention, as patients and insurers grapple with rising drugs costs. Some U.S. drug-plan managers credited the nonprofit last year with helping them secure big discounts on expensive new hepatitis C drugs, after ICER concluded the therapies would only be cost-effective at half their price.
Earlier this week, ICER said new cholesterol-lowering drugs from Amgen Inc., Sanofi SA and Regeneron Pharmaceuticals Inc. should cost about 85% less than what the companies are charging, based on their clinical benefits and the potential strain on health-care budgets. The companies said they are reviewing the ICER report and have questioned some elements of the methodology behind ICER’s conclusions.
ICER bases its conclusions on a review of the safety and efficacy results from clinical trials of drugs, as well as estimates of the economic effect of their use, Dr. Pearson said. The evaluation includes calculating how much it would cost for a drug to provide a patient with an additional year of healthy life, versus older treatment options. It also scrutinizes a drug’s effect on overall health spending.
The group takes about six months to prepare the drug-evaluation reports, tapping into nearly 20 employees with expertise in epidemiology and other fields, Dr. Pearson said. ICER also commissions outside experts who have developed economic models that help judge a drug’s cost-effectiveness. For the Entresto review, ICER received such assistance from professors at Stanford University School of Medicine.
Write to Peter Loftus at [email protected]
Source: Wall Street Journal Health
