US insurers dragging feet on covering new drugs, Novartis says

By John Miller BASEL (Reuters) - Getting U.S. government and commercial insurers to cover new medicines can now take longer than in Europe, Swiss drugmaker Novartis said on Wednesday, blaming U.S. delays for weaker than expected sales of a key heart failure treatment. Last year, the U.S. Food and Drug Administration approved 45 novel drugs, the most since the all-time record of 53 in 1996. However, Novartis said poor sales of one of those new drugs, its heart failure treatment Entresto - just $5 million for the fourth quarter, well off expectations of analysts as well as the company - resulted from delays in making new medicines available to insured patients. David Epstein, the company's pharmaceuticals chief, said European insurers and governments were now faster to reimburse for medicines such as Entresto and Novartis's new psoriasis and arthritis drug Cosentyx than those across the Atlantic. "They (in the U.S.) have really developed their tools extensively around introduction of new drugs, which creates a period of time where access is difficult," Epstein said. "And that period of time is now longer than it is in Europe." How fast Novartis can convince insurers to pay for new drugs is a critical theme now for the company, given it has $3 billion worth of drugs where patents expire this year. Epstein blamed lackluster Entresto numbers on so-called "blocks" by federal Medicare insurance for seniors, as well as from commercial insurers, that last for months after regulatory approval while they evaluate the therapies. He said that was changing for Entresto: For 70 percent of people covered by Medicare, and 77 percent of patients on U.S. commercial plans, it has now been added to the list of drugs covered. "By mid-year, we'll see this product is on a much better track and continues to have strong blockbuster potential," Epstein said. (Reporting by John Miller in Basel, Ben Hirschler in London; Editing by Mark Potter)