Innovative pricing arrangements
Novartis has initiated a series of innovative pricing arrangements, where payment is directly related to the value created by its products for patients.
In Germany, for example, Novartis entered into an arrangement with two major sick funds on Aclasta (zoledronate), a medicine to prevent fractures in post-menopausal women with osteoporosis. As an annual injection, instead of daily or weekly pills, patients will be more compliant with Aclasta than with other medications, which is likely to result in a lower rate of fractures. Novartis has supported this anticipated outcome with an arrangement, whereby the cost of Aclasta will be refunded, if the patient experiences an osteoporotic fracture within one year of the injection.
In the UK, Novartis implemented an outcomes-based arrangement for Xolair (omalizumab). This is a highly innovative therapy for patients with severe allergic asthma. However, due to its mechanism of action, not all patients will respond to Xolair. Under the Xolair Outcomes Based Rebate scheme, treatment response will be assessed after 16 weeks. If patients do not respond as anticipated (based on clearly defined criteria), Novartis may be asked to provide replacement stock. Patients responding will continue to be treated as usual.
In a number of countries, Novartis has offered dose-capping arrangements for Lucentis (ranimizumab), a breakthrough therapy for patients with wet age-related macular degeneration. While all clinical trials were performed with a monthly injection of Lucentis, the label (SmPc) specifies the treatment regimen as an initial three monthly injections in the treated eye, followed by treatment on an as needed basis, resulting in six to eight injections per year for the majority of patients. In the course of its assessment, the UK National Institute for Health and Clinical Excellence (NICE) confirmed that Lucentis would be cost-effective when used this way, and agreed that it was appropriate to accept our novel offer for a ‘patient access scheme’ whereby up to 14 injections per patient and eye would be paid by the NHS, and Novartis would reimburse the NHS for the cost of additional vials the patients may need.
We believe that the interests of patients, physicians, payors and providers can be aligned in such models and create a value-based competition, resulting in better outcomes for patients.