ARTICLE | Strategy

Paying in heart failure

Why Novartis likes outcomes-based payment for Entresto in heart failure

July 20, 2015 7:00 AM UTC

Because Entresto sacubitril/valsartan is entering a market in which cheap generics are the standard of care, Novartis AG had to get creative. That's why the pharma is discussing a performance-based pricing model with a few payers that would begin with discounts for its new heart failure drug, and then would give the pharma a piece of downstream healthcare savings.

The scheme is novel in that Novartis would accept a greater share of the upfront risk compared with outcomes-based contracts that start with a higher upfront price and provide payers with rebates if outcomes are not as good as expected...