(Corrects discount Institute for Clinical and Economic Review
recommended to 9 percent from 17 percent in eighth paragraph)
NEW YORK Feb 8 U.S.-based health insurer Cigna
Corp and Novartis AG have agreed on a
performance-based price for the Swiss drugmaker's new heart
drug, Entresto, Cigna said on Monday.
The agreement is one of the few performance-based deals that
have been made public by drugmakers and U.S. managed-care
companies, who say they have been having more discussions about
linking price to health outcome in order to cut unneeded drug
Drug prices jumped about 13 percent in the United States
last year, spurring a public outcry and moving the issue onto
the campaign platform of Hillary Clinton and other U.S.
Presidential candidates for the November 2016 election.
Under the agreement, Cigna said its payments to Novartis
will be linked to how well the drug - which treats people with
chronic heart failure to help prolong lives and reduce hospital
admissions - improves the relative health of Cigna's customers.
Specifically, payments will be based on a reduction in the
proportion of customers who are admitted to hospital for heart
Cigna manages health benefits for some of the largest
U.S.-based corporations, in which those companies bear the risk
of higher medical costs. It also has a small commercial business
that includes individual customers on the government health
exchanges and it manages government contracts for Medicare and
Entresto, which costs about $12.50 a day or $4,560 per year,
was approved by the U.S. Food and Drug Administration in July.
Its price is cheaper than those of some other new drugs, but is
still more than analysts expected.
The Boston-based Institute for Clinical and Economic Review,
an independent group that analyzes drug prices, has said the
price should be 9 percent lower.
Novartis Chief Executive Joe Jimenez has publicly discussed
the need for the industry to move to a more outcome-based
David Epstein, Novartis's head of pharmaceuticals, said on
Jan. 27 during an investor conference call that it had signed
deals with two health insurers in which the company had agreed
to a base price and a modest rebate.
"Depending upon whether or not we achieve specific goals
around reduced hospitalization and savings to the plan, the
rebate would either go up or go down," he said.
(Reporting by Caroline Humer; Additional reporting by John
Miller in Zurich; Editing by Bernadette Baum)