Wednesday, May 06, 2009

Novartis Puts Its Money Where Its Mouth is, Too

Last month we heard about how Proctor & Gamble and partner Sanofi-Aventis have agreed to reimburse a health insurer, Health Alliance, for the costs of any fractures suffered by patients taking osteoporosis drug Actonel. That’s putting one’s money where one’s mouth is, as P&G’s NAM general manager pointed out in this NYT piece.

Now you've of course read all about the pay-for-performance style deals that are increasingly popular in Europe—whereby, for instance, a company agrees to re-fund the cost of a drug if it doesn’t work, or help pay for part of it. But the Actonel deal is a bigger deal: it’s pay-for-non-performance. That could get expensive. We’ve no doubt that P&G/Sanofi have gone mad with their small-print. But still, this is potentially the top of a very slippery slope for drug firms in their desperate bid to win favorable coverage.

Turns out Novartis is doing something similar with its own bone drug, Reclast—this time in Europe (where it’s sold as Aclasta). The Swiss firm is running two pilot studies, in Germany and Italy. According to Joe Jimenez, CEO of Novartis Pharmaceuticals, “we pay for hospitalization and nursing care if there’s a fracture” for patients taking Aclasta, which is given as a once-yearly infusion.

That’s faith in the product for you—given that Novartis won’t easily, with a once-yearly infusion, be able to claim non-compliance. (P&G/Sanofi might: Actonel is once-weekly.) And indeed, Jimenez was quick to add that he “does not see more broad-scale use” of such programs (even though the pilots, running for one or two years, are not yet complete). “Reimbursement is not going to be an issue for us” in the US, he argues. “The drug stands on its own benefit. Clinical evidence of efficacy tends to be enough.” (Though not, apparently, in Italy and Germany.)

Still, one big reason these companies are bending over backwards to get their drug nicely fitted into formularies and onto reimbursement lists is the imminent arrival of Amgen’s denosumab, currently under FDA review but expected to be approved before year-end. That drug is the company’s future, and you can be sure it will market the hell out of it.

Amgen’s most obvious trump: denosumab is not a bisphosphonate like Actonel and Reclast. D-mab builds up bone, rather than preventing its breakdown. (For more on future osteoporosis drugs, read this.) It also thus circumvents the bad bisphosphonate press that is emerging after many years of market usage: osteonecrosis of the jaw, bone pain, ‘frozen’ bone…all thought to be a result of blocking the normal bone regeneration process over the long-term.

Now sure, both Reclast and D-mab are really looking to take share from oral bisphosphonates which account for over 90% of osteoporosis sales volume. But if there’s only a bit of share to go around (and let’s face it, with generic Fosamax about, oral BPs aren’t going to go away) Novartis will be up against Amgen big time. “And you can assume we’ll aggressively defend what we’ve built” asserts Jimenez, in case it wasn’t clear. He points to Reclast's good fracture reduction data (he’s right; D-mab doesn’t beat it), and the drug’s once-yearly administration. But convenience isn’t going to be the trump-card for a 15-minute infusion given in specialist centers only—not over a twice-yearly subcutaneous injection.

The trump card for Novartis may well be denosumab’s as-yet-unknown long-term safety profile, particularly as, according to Jimenez, the drug “is still in the system after six months, unlike Reclast which is cleared within 24 hours.” BPs long-term safety may not be great, but in such matters it might be a case of better the devil you know--and of putting your money where your mouth is.

image by flickrer johnmuk used under a creative commons license

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