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# Novartis CEO sees IRA impact ‘manageable’ in short run, maintains midterm growth goal
By [Angus Liu](https://www.fiercepharma.com/person/angus-liu-0)Jul 18, 2024 11:05am
[Novartis](https://www.fiercepharma.com/keyword/novartis) [Vas Narasimhan](https://www.fiercepharma.com/keyword/vas-narasimhan) [Earnings](https://www.fiercepharma.com/keyword/earnings) [Entresto](https://www.fiercepharma.com/keyword/entresto)
As biopharma companies and the U.S. government near the deadline of their drug price talks under the Inflation Reduction Act (IRA), Novartis CEO said the cost cuts “might be manageable” in the short term for the firm’s first few products to be included.
That’s because at least for the initial 10 drugs subject to IRA price negotiations, the products are already relatively close to their patent cliffs with generic entries expected not too far away, Narasimhan said during Novartis’ second-quarter earnings call Thursday.
Take Nova...
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# Novartis CEO sees IRA impact ‘manageable’ in short run, maintains midterm growth goal
By [Angus Liu](https://www.fiercepharma.com/person/angus-liu-0)Jul 18, 2024 11:05am
[Novartis](https://www.fiercepharma.com/keyword/novartis) [Vas Narasimhan](https://www.fiercepharma.com/keyword/vas-narasimhan) [Earnings](https://www.fiercepharma.com/keyword/earnings) [Entresto](https://www.fiercepharma.com/keyword/entresto)
As biopharma companies and the U.S. government near the deadline of their drug price talks under the Inflation Reduction Act (IRA), Novartis CEO said the cost cuts “might be manageable” in the short term for the firm’s first few products to be included.
That’s because at least for the initial 10 drugs subject to IRA price negotiations, the products are already relatively close to their patent cliffs with generic entries expected not too far away, Narasimhan said during Novartis’ second-quarter earnings call Thursday.
Take Novartis’ fixed-dose heart failure combo drug Entresto, which is one of the 10 meds up for IRA price adjustments that will take effect in 2026. Novartis currently expects Entresto generic entry in mid-2025 in its financial forecasting, although the company is still defending several other patents to potentially extend the market exclusivity.
“When you start getting hundreds of drugs on this list, and you have drugs that are earlier in their life cycle in areas where you need more time to actually generate the peak sales and the return,” that may become more difficult for companies to manage the impact of IRA, Narasimhan added.
Companies and the Centers for Medicare & Medicaid Services will have until the end of July to set the maximum fair prices of the 10 drugs and will publish the results by Sept. 1. Johnson & Johnson, which has three meds on the list, has [received](https://www.fiercepharma.com/pharma/jj-keeps-growth-projections-afloat-it-braces-ira-price-negotiation-impact) the final price offers from Medicare, the company disclosed during its second-quarter report Wednesday. J&J has decided to maintain its projection of growing sales between 5% to 7% on average from 2025 to 2030.
Narasimhan on Thursday’s call also reiterated Novartis’ [mid-term guidance](https://www.fiercepharma.com/pharma/novartis-dials-midterm-sales-projection-fleshes-out-kisqalis-7b-plus-goal), which aims to drive up sales by an average of 5% or more from 2023 to 2028. And during a separate Thursday call with reporters, CFO Harry Kirsch said Novartis expects to grow every year despite Entresto’s patent cliff.
### Related
[J&J keeps growth projections afloat as it braces for IRA price negotiation impact](https://www.fiercepharma.com/pharma/jj-keeps-growth-projections-afloat-it-braces-ira-price-negotiation-impact)
Second-quarter numbers suggested that Novartis is on a good track. Sales at the Swiss pharma were up 11% at constant currencies to reach $12.5 billion during the past three months, slightly ahead of Wall Street’s consensus.
Novartis’ confidence is built on several key growth drivers, although one of them fell short of expectations in the second quarter.
The only disappointment in Novartis’ Q2, as ODDO BHF analysts noted, came from the radioligand therapy (RLT) Pluvicto, whose $345 million haul during the period fell 5% below consensus. The prostate cancer drug saw sequential growth from $310 million in the first quarter.
“We’re now in a transition point where our early rapid uptake is now transitioning to a place where we need to generate demand in a next wave of centers and then eventually out into community oncology, both for the success of Pluvicto, but also for the long-term success of RLT,” Narasimhan said.
The CEO outlined some specific targets. In its currently approved setting as a post-chemo treatment of metastatic castration-resistant prostate cancer, Pluvicto has secured about 30% market share, or 90% share in some treatment centers where Novartis is well established. The company now aims to grow its share at some newer sites from 50% to 90%. In another about a third of the 475 treatment sites that are “much more in the community,” the company hopes to grow its market share from 10% first to 50% and eventually to 90% as well, Narsimhan said.
To help with that push, Novartis recently expanded Pluvicto’s field force to educate community doctors and increased its U.S. promotional efforts, with a direct-to-consumer campaign planned in the third quarter to raise awareness of the drug.
It’s also plotting a phased launch of a “patient-ready dose,” which Narasimhan said is “a very important step in that it reduces the time of providing Pluvicto from around an hour to less than 10 minutes, and this will allow sites to hopefully take on more patients.”
Global expansions are underway, too. The company recently got German reimbursement policy approved, and an application in China is planned for later this year.
All these efforts will be even more important as Novartis looks to move Pluvicto up in the treatment sequence to before chemotherapy. An FDA application is being planned for later this year after the overall survival trend in the phase 3 PSMAfore trial turned in Pluvicto’s favor.
### Related
[Novartis dials up midterm sales projection, fleshes out Kisqali's $7B-plus goal](https://www.fiercepharma.com/pharma/novartis-dials-midterm-sales-projection-fleshes-out-kisqalis-7b-plus-goal)
Besides Pluvicto, the breast cancer drug Kisqali is also anticipating a key FDA decision as a postsurgical adjuvant therapy for early-stage disease. Novartis now expects a verdict by the end of September, which appears to be a delay considering it filed the application in December and used a priority review voucher.
During Thursday’s call, Narasimhan confirmed that Kisqali’s application got delayed by three months because of some [manufacturing adjustments](https://www.fiercepharma.com/pharma/novartis-halts-recruitment-clinical-trials-it-adjusts-its-manufacture-breast-cancer-drug) it recently made. Novartis has completed the changes and provided additional stability data to the FDA, he said. The company is already in label discussion with the agency, and Narasimhan said he’s confident in a broad label.
Kisqali sales in the metastatic breast cancer setting jumped 50% year over year at constant exchange rates, reaching $717 million in the second quarter.
In another delay Novartis communicated Thursday, the company pushed back its U.S. filing for the BTK inhibitor [remibrutinib](https://www.fiercebiotech.com/biotech/novartis-btk-inhibitor-hits-hives-phase-3-teeing-filings-counter-dupixent-threat) in chronic hives to 2025 also because of the need to make some manufacturing adjustments.
The biggest beat in Novartis’ second quarter came from the cholesterol drug Leqvio. The RNA interference therapy, which has been on a slow launch since its approval in late 2021, reeled in $182 million in sales, beating consensus by 10%.
“I think we’re seeing step by step, more and more acceptance of the option to take twice a year medicine to achieve 50% to 60% cholesterol lowering, and that’s a trend we’re seeing broad-based around the world,” Narasimhan said.
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