(Bloomberg) — Novartis AG's new heart medicine is getting a warmer reception in Europe than the United States, defying conventional market wisdom and highlighting weaknesses in the world's largest health care market.
The drug, Entresto, is struggling to generate the sales investors expected after its introduction in July. Analysts have cut their 2020 estimates for Entresto by 35 percent in the last three months amid weak demand for the drug in the U.S., where physicians are reluctant to prescribe the drug as insurance companies resist broad coverage.
Entresto has had a faster uptake in Europe since it was approved by regulators there in November. That may be because many European governments are the main purchasers of both drug and hospital treatment. Entresto reduces hospitalization rates for heart-failure patients by 20 percent, saving governments money, Novartis (NYSE:NVS) Chief Executive Officer Joe Jimenez said.
"The savings that Entresto could provide across the system is being recognized," Jimenez said Thursday on a conference call with journalists.
In the first week Entresto was on the German market, more than 1,000 patients were on the therapy, David Epstein, CEO of Novartis's pharmaceutical unit, said on a conference call in January. That compared with about 11,000 patients in the United States, after the drug had been available for six months. In Switzerland, the adoption of the new treatment was more than five times as strong as it was in the United States, Epstein said.
Straightforward Switzerland
"The Swiss system is much more straightforward," Epstein said. "Once the price is negotiated, the market opens."
