Finding the right balance between a potent drug pipeline and people-friendly pricing.
Swiss pharmaceutical giant Novartis has made waves with a drug pipeline that includes one of the most talked-about experimental cancer therapies in recent years—a treatment called Kymriah that reconfigures the body’s own immune cells to become aggressive blood-cancer killers. Kymriah just won a milestone FDA approval to become the first drug in its class.
Innovation comes in many forms, and the company has shown a willingness to apply this same creativity to its drug pricing structure, adhering to the philosophy that medicines should be judged on their worth. The company’s access initiatives in developing nations reflect one aspect of that thinking: Novartis offers treatments for deadly chronic illnesses at $1 per treatment per month to governments and public-sector customers in poor countries, as well as education and screenings in places like India, Kenya, and Vietnam.
Novartis has also set out to change how the biopharma industry and governments approach drug pricing and development. Its Sandoz unit was the first to win U.S. approval of a “biosimilar” drug—a treatment that’s the cheaper generic equivalent of some of the world’s most expensive therapies. Novartis has several more biosimilars marketed in other countries (as well as an FDA approved copycat of Amgen’s bestselling treatment Enbrel, which hasn’t reached the U.S. yet due to patent spats), and three others in late-stage clinical development.
CEO Joe Jimenez, who recently announced that he would retire next year, is also cochair for a global “value-based pricing” project that wants to figure out how to best match health care costs with patient outcomes. For Novartis, it’s not just a theoretical concept. In the case of Kymriah, the company will get reimbursements only if patients respond to treatment within a month.
Joseph Jimenez, Jr.
|Revenues ($M) (Last Fiscal Year)||$49,436|
|Profits ($M) (Last Fiscal Year)||$6,712|
|Market Value ($M)||$216,319|