Big Pharma Gets Solace From Europe
Novartis says a value-for-money heart-failure drug is getting a better reception there than in the U.S.
Are the transatlantic tables turning in pharma?
Switzerland’s Novartis said this past week that it was seeing faster uptake of heart-failure drug Entresto in Europe than in the U.S. The potential blockbuster has struggled: It sold just $17 million in the first quarter, with Novartis guiding to $200 million for the year, well below forecasts.
With heightened focus on the burden of high U.S. drug prices, Novartis said it got a better reception in Europe’s single-payer system than in the U.S. for its value-for-money pitch for Entresto, which helps to reduce hospitalizations. That would be a real turnaround. For years, pharma companies have benefited from high prices for innovative drugs in the U.S., while struggling in Europe.
The shift may be less dramatic than it seems. Novartis later conceded that Entresto is priced at €5.50 ($6.17) a pill in Europe, about half the list price in the U.S. Of course, no one pays the list price. But Novartis also suggested that its pricing of the drug, which got a nod of approval from the Institute for Clinical and Economic Review, meant more limited discounts on offer to payers than seen elsewhere.
Ultimately, it isn’t quite clear why Entresto has had such a slow start. One barrier has been requirements for doctors to seek prior authorization before prescribing the drug. But Novartis also said that it was seeing no “real sense of urgency” among prescribers, despite the drug’s seemingly impressive data.
As long as U.S. doctors are cautious, investors should be, too.