Colorado implements accountability for Novartis on outcomes of two new drugs

As part of its broader efforts to lower drug costs in the state, the Colorado Department of Health Care Policy & Financing (HCPF) announced this week that it has contracted with Novartis Pharmaceuticals Corporation for two drugs that aim to treat patients and deliver savings to taxpayers.

The value-based contracts are designed to give Medicaid members affordable access to the drugs and hold drug manufacturers financially accountable to the clinical outcomes. Should the treatments fail to achieve defined clinical health outcomes, the state would be awarded reimbursement.

 

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The agreements pertain to two innovative therapies: Zolgensma, a treatment for spinal muscular atrophy (SMA), and Entresto, a treatment for heart failure.

Zolgensma is a one-time only prescription gene therapy infusion used to treat children under 2 years old with SMA. The therapy targets the malfunctioning survival motor neuron 1 (SMN1) gene to replace it with a working copy that promotes production of SMN protein. This protein is vital to the function and survival of motor neuron cells that moderate muscle function. As of September 2021, the drug has treated more than 1,600 children diagnosed with SMA.

The Zolgensma contract allows the Department to recoup a significant portion of the Medicaid price if the gene therapy fails to deliver the clinical health outcomes on developmental metrics for a five-year period following its use. 

Entestro is a prescription medicine used to treat adults with long-lasting (chronic) heart failure to help reduce the risk of death and hospitalization. It utilizes valsartan and sacubitril, two active ingredients that target vascular conditions to promote blood flow.

The Entestro contract provides manufacturer refunds in the form of additional rebates to the Department if hospitalizations are not reduced by at least 20% in qualifying Colorado Medicaid members taking the medication.

These initiatives build off of the state’s other recent efforts to implement value-based care, including the standardized public health benefit plan, referred to as the Colorado Option, which was signed into law by Governor Jared Polis last summer. The state also established in June a Prescription Drug Affordability Board tasked with reviewing and setting price limits on prescription medications.

According to HCPF Executive Director Kim Bimestefer, entering into more value-based arrangements with drugmakers will continue as part of efforts to address costs and inefficiencies in the health care system.

“The Department is working hard to close health care disparities, improve patient health outcomes, and drive better affordability in the Medicaid program. Value-based contracts enable us to financially reward our providers for helping us achieve these shared goals,” said Bimestefer. “Such contracts also help us hold providers and partners like drug manufacturers financially accountable for the better results we want from them going forward.”