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Lessons from Amgen and Novartis U.S. risk-sharing reimbursement deals

The first handful of outcomes-based deals notched by Amgen Inc. and Novartis AG for new drugs in the U.S. provide early lessons for companies thinking about testing similar pricing models. The first is that companies should expect different insurers and PBMs to want to track different endpoints depending on their business goals.

The second is that real risk-sharing deals - in which drug manufacturers not only pay for suboptimal drug performance, but also share in the upside of better-than-expected performance - are not attractive to some payers at current drug pricing levels.

Amgen and Novartis blazed a trail last year when they announced their intentions to seek risk-sharing arrangements with U.S. payers for brand-new innovative drugs. The companies had to get creative, because they were launching into commercial headwinds by introducing new drugs into markets dominated by cheap generics.

Within weeks of last July's FDA approval for Entresto sacubitril/valsartan to treat heart failure, Novartis said it would propose performance-based pricing models with a few payers. As proposed, the model would start with discounts and then give the pharma a piece of downstream healthcare savings related to reductions in hospitalization.

On the day Repatha evolocumab was approved to treat selected populations with high cholesterol, Amgen said it would work with payers to provide "innovative pricing programs linked to efficacy" based on LDL lowering.

Both drugs were a good fit for risk-sharing deals: they were entering large markets where they would add significantly to current drug spending, there is potential for significant healthcare savings if the drugs

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