Novartis Turns To Digital Health To Rationalize High Cost Heart Failure Drugs

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Last week, the FDA approved the first drug to show a measurable improvement to mortality rates for heart failure patients when compared to Enalapril, the current standard treatment. The new drug, Entresto, was developed by Novartis and is being called a game-changer by cardiologists who have waited more than decade for better medications, and specifically for medications that reduce mortality rates, for the condition. Entresto, which has been shown to both reduce mortality and heart failure-associated hospitalizations, represents the most significant improvement in treatment options in 20 years, and is expected to be a blockbuster drug for Novartis.

The problem with Entresto is its cost. At $12.50 per day, the new drug is significantly more expensive than its less effective predecessor, Enalapril, which costs less than a dollar per day. To help insurers maximize their return on investment, Novartis is evaluating the possibility of partnering with digital health companies to further reduce heart failure-associated hospitalizations and help ensure that the medication is a financially sustainable treatment option.

Novartis has a track record of pursuing innovative solutions to support its treatments. In 2010, the company invested $24 million in Proteus Digital Health, a startup building ingestible sensors that, pending FDA approval, will be embedded in traditional pills. The sensors can detect when they have been swallowed, and then will automatically send a signal to a paired smartphone app to track medication compliance for patients. In 2014, Novartis made headlines again when it partnered with Google to commercialize its glucose-monitoring contact lenses. More recently, Novartis announced that it had partnered with Qualcomm in a $100 million joint-effort to create a digital health platform designed to support clinical trials. The announcement was made in January 2015, just two months before Apple unveiled ResearchKit which provides similar functionality.

Now, Novartis is returning to the digital health industry to find ways of rationalizing the cost of its newly approved medication. The company is specifically evaluating remote patient monitoring services and solutions, including Internet-connected scales that could detect concerning changes in daily fluid balances. By rolling out a platform that supplements its medication, Novartis hopes to improve outcomes and drive down healthcare services utilization within the heart failure patient population. This, says CEO Joe Jiminez, is the way forward for Novartis, “We’re going to have to get smarter about services around the pill…and move into some areas that are different from just discovery of the drug. You’re going to see Novartis go to payers with multiple services.” By partnering with remote patient monitoring services, Jiminez believes he can win over insurers by offering a comprehensive solution that will contain costs, rather than increase them.

The company is also testing flexible pricing models to insurers in a new payment model. Under the new model, insurers would get a partial refund if the new drug did not deliver on its promised outcome, and Novartis would get a bonus if the drug over-performed.


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