Novartis’ Shaw Talks Outcomes-Based Contracts

Novartis AG is looking to lead the charge when it comes to outcomes-based reimbursement, US Country Head and President, Novartis Pharmaceuticals Christi Shaw said, pointing to two contracts for its heart failure drug Entresto signed with Cigna Corp. and Aetna Inc.

“We used our clinical trial endpoints of death and hospitalization as the primary endpoints to prove that we will reduce death and hospitalization in heart failure patients as this study projected,” Shaw said. “If we don’t do that, then we should give back to the system.” Neither Novartis nor the insurers have provided details about how much of the cost Novartis would be required to return if patients don’t achieve the expected outcomes.

Industry has shown a willingness to move toward more outcomes-based approaches but there are many challenges to implementing the programs, for example getting industry and payers to agree on the appropriate endpoints to use and data to verify the outcomes.

The two Entresto contracts are one-year contracts and Shaw acknowledged it would be ideal if there were a way to share data across plans to measure the longer-term outcomes. One positive in this instance is that the majority of patients with heart failure – about two-thirds – are Medicare patients who tend to change plans less frequently than those on commercial insurance, she said.

Editor's note: To read about comments on drug pricing at the conference by company executives and other thought leaders, see [A#00160215002].

“We are also working with government on those things too, what are some of the policy issues that prevent us from being able to move faster,” Shaw added. “Some might think, well pharma and bio don’t want to do this, when I don’t think that’s true. If you don’t have a primary endpoint in your clinical trial -- that’s what the payers want to measure, that’s what’s important to patients -- you can’t really do the outcomes-based contracting.”

The launch of Entresto has been off to a slow start since its FDA approval in July, generating just $5m in sales in the fourth quarter. But Shaw said the drug is still estimated to generate $5bn in revenues eventually, despite its modest start. One issue has been securing access, given the high Medicare patient population, but that has recently improved, she said.

Gilead Recruiting Fresh Blood

One of incoming CEO John Milligan’s initiatives for Gilead Sciences Inc. will be to bring in a new generation of talent, he said during a fireside chat Feb. 9. The current president and chief operating officer is part of a longstanding management team at the big biotech. Milligan was appointed to take over from CEO John Martin effective March 1, with Martin remaining as chairman. Milligan and Martin have been working together at Gilead for more than two decades and the transition comes at an important time with Martin about to turn 65 and Milligan turning 55 years old.

“The board and John felt it was important the next CEO have enough time to put his or her imprint on the company,” Milligan said.

But, he acknowledged that a lot of Gilead’s top management has worked at the company for a long time, including Chief Scientific Officer Norbert Bischofberger.

“The challenge for me also is to create a next generation of leaders, a next generation successor for myself, so that we have this seamless continuity into the future,” he said.

The company is also looking to bring in people with skills the company doesn’t already have. “This is advertising for the people who want to apply,” Milligan joked. “Norbert and I pray that those people come in and keep the intellectual stimulation high for us so we can continue to move the company forward.”

Positive Veltassa Data For Relypsa, But Will It Make It Into The Label?

Relypsa Inc. has positive data from a Phase I drug-drug interaction study for Veltassa (patiromer) that could be important to the hyperkalemia treatment’s competitive position if a rival enters the market later this year as expected, but whether or not the data will make it onto the label is still uncertain.

During an interview, CEO John Orwin said the company needs to discuss the data with FDA to understand the agency’s perspective.

“Until we have that conversation, we wouldn’t want to speculate,” Orwin said. “We really need to understand what the FDA might be looking for.”

Relypsa announced the data Jan. 25, showing that Veltassa did not show a clinically meaningful reduction in absorption for nine of 12 drugs that had previously demonstrated binding in in vitro tests. For the other three drugs, when they were separated by three hours, no reduction in absorption was observed. Veltassa was approved in October for the treatment of hyperkalemia, but with a boxed warning about the potential for the 12 drugs to bind to other oral medications and the need for six-hour separation between their administration ([A#14151022004]).

Getting the new data into labeling would be important for Veltassa, particularly because AstraZeneca PLC is expected to launch a competitor drug soon. The product, known as ZS-9, is pending at FDA with an action date of May 26. AstraZeneca gained the drug with the acquisition of ZS Pharma Inc. last year for $2.7bn. ([A#14151105005]).

“It hasn’t proven to be an issue with physicians today in terms of their likelihood to prescribe [Veltassa], but could it be made into an issue or leveraged by a competitor is really the open question,” Orwin acknowledged. “I think that has a lot to do with what the label for the competitor product looks like.”

The apparently competitive bidding process for ZS Pharma has raised speculation that others might be interested in buying Relypsa. On that question, Orwin wouldn’t comment.

“Most companies have optionality but you don’t manage the company around optionality,” he said. “You manage around doing the right thing for patients and creating the most long-term value.”

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