Biogen slumps after Medicare proposes to limit coverage of Alzheimer’s drug

• Medicare won’t pay for Adulhelm until it sees positive results from a government-approved trial

• The decision could result in an insignificant amount of sales for the drug in 2022 and 2023

Biogen Inc fell over 10% on Wednesday after the U.S. government announced restricted coverage of a controversial Alzheimer’s drug, Aduhelm, approved last year.

The Centers for Medicare & Medicaid Services (CMS), in a statement, proposed that patients need to be enrolled in a clinical trial to have access to the treatment, vastly limiting the number of patients who could use the expensive drug.

The proposal was based on an analysis of the benefits and risks of the drug, which has raised concerns about Aduhelm’s high cost and efficacy.

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“While there may be the potential for promise with this treatment, there is also the potential for harm to patients,” said Dr. Lee Fleisher, chief medical officer at CMS and director of the Center for Clinical Standards and Quality, in the statement.

“This harm may range from headaches, dizziness, and falls to other potentially serious complications such as brain bleeds,” he said.

Controversies

Biogen had been waiting for the government’s coverage decision, if which had been positive, would help drive up sales of Aduhelm and counter the hit to its revenue from some of its leading drugs from growing competition.

Analysts are expecting that if CMS’s draft decision goes through, it could result in negligible Aduhelm sales in 2022 and 2023.

Moreover, the final decision, which would come by April 11, on whether to pay for the treatment is vital because it affects whether health insurers will cover the cost.

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Aduhelm became the first new treatment for Alzheimer’s in nearly twenty years after it won approval from the U.S. Food and Drug Administration (FDA) in June, without the view of the agency’s outside advisors.

Moreover, Biogen had not proven the treatment’s clinical benefit yet.

Last month, the drugmaker reduced the price of Aduhelm to $28,200 for an average-weight person after facing slower-than-expected sales in the United States and facing repeated complaints from hospitals that the high cost of the drug was not worth its benefits.

Picture Credit: Axios