Insurers set performance-based price for heart drug

In one of the few arrangements of its kind, Cigna Corp and Aetna Inc. struck a deal with Novartis for a performance-based price for its heart failure drug, Entresto.

The agreements are among the few performance-based deals that have been made public by drugmakers and US managed care companies, Reutersreported. The deal was made in an effort to combat the skyrocketing drug prices – they rose 13% in the United States last year.

Congressional hearings investigating rising drug costs, including Turing Pharmaceuticals’ price increase of 5,000% on Daraprim, were held in early February.  

Related: Hearing ups pressure on drugmakers’ prices

In the new agreement with Novartis, Cigna said its payments to Novartis will be linked to how well the drug improves the relative health of Cigna customers. Payments will be based on a reduction in the proportion of customers who are admitted to the hospital for heart failure, according to Reuters.

And Aetna signed a value-based agreement with Novartis that is based on the drug replicating results that it achieved during clinical trials, according to Reuters. 

“Competitive drug prices are important, but equally so is ensuring that customers’ medications are actually working as, or better than, expected. Outcomes-based contracts require that prescription medicines perform in the real world at least as well as they did during clinical trials and are a valuable tool for improving health and managing costs,” said Christopher Bradbury, senior vice president of integrated clinical and specialty drug solutions for Cigna Pharmacy Management.

Related: Americans want drug pricing reform

This agreement is effective for Cigna's commercial business – not its Medicaid and Medicare plans – and the insurer said that Entresto is a preferred brand subject to prior authorization review.

Entresto costs approximately $4,560 per year, more than analysts expected. The Institute for Clinical and Economic Review, an independent group that analyzes drug prices, said the price should be 17% lower, Reuters reported.

Read more: ‘Beyond the pill’: Novartis eyes new pricing model for heart failure drug