Alzheimer’s Drug Price Uproar Grows as U.S. Weighs Coverage

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The $56,000 annual price for Biogen Inc.’s recently approved Alzheimer’s therapy is drawing increasing criticism ahead of a decision by the U.S. government on reimbursement policies for the medication.

The Employers’ Prescription for Affordable Drugs, a coalition of health-care purchasers, said in a letter to congressional leaders on Monday that taxpayers and employers will have to pay billions of dollars for the drug, called Aduhelm, without knowing whether it works.

Aduhelm’s approval and price are a “cautionary tale of a broken system that is in profound need for reform,” the group wrote.

The Food and Drug Administration granted Aduhelm an accelerated approval this month over the objections of an advisory committee that said there was a lack of clear evidence that the drug could slow patients’ cognitive decline. Regulators said that Biogen must continue to study the therapy.

Despite the dispute over its benefits, Aduhelm could be taken by millions of Americans, creating a formidable new burden for taxpayers, employers and households who will ultimately pay for it. In addition to the high list price of the drug, patients who take it are expected to need regular scans to monitor treatment outcomes and side effects.

Biogen has said it expects 80% of the patients who ultimately take its drug to be on Medicare, the public insurance that covers Americans 65 and older. The federal agency that runs the program, the Centers for Medicare & Medicaid Services, hasn’t yet said how it will handle coverage.

If a million patients take Aduhelm, the annual cost would top $57 billion, according to estimates from the Kaiser Family Foundation. That’s more than the total for all drugs covered under Medicare’s Part B program, which is for medications like Aduhelm that are infusions administered in a doctor’s office.

Biogen is “engaging directly with public and private payers, and health systems to ensure coverage policies support access for appropriate patients,” spokeswoman Allison Parks said in an email, citing agreements with Cigna Corp. and the Veterans Health Administration.

The company plans to work with Medicare on “innovative price and access agreements that would help support continued sustainability of Medicare budgets,” she wrote.

Unusual Move

It would be unusual for Medicare to limit access to a treatment that has gained a broad acceptance from the FDA. Officials may not have much room to maneuver, analysts from RBC Capital Markets wrote in a note to clients on Tuesday.

“The ability for CMS to meaningfully restrict Aduhelm appears limited to us in the near-term,” RBC’s Brian Abrahams wrote. “We think that CMS’s hands may largely be tied, barring an intervention from Congress.”

A meeting of outside experts who advise Medicare on coverage decisions could be scheduled for as soon as July, the RBC analysts wrote.

CMS is reviewing the FDA’s decision and will have more information soon, according to a spokesperson for the agency who asked not to be named.

Patient Pushback

Alzheimer’s patient groups who implored the FDA to allow the drug on the market and praised the approval have also denounced the price. “This price is simply unacceptable,” the Alzheimer’s Association said June 12.

Some lawmakers have lashed out how the FDA handled the approval. Senator Joe Manchin, a Democrat from West Virginia, urged the Biden administration to replace the acting FDA chief. Representative Jim Cooper, a Tennessee Democrat, said that his wife recently died from Alzheimer’s and effective therapies are needed.

“But this drug doesn’t seem to work,” he said in a statement. “Charging $56,000 for a drug that doesn’t work is a scam.”

Pricing Reform

The Employers’ Prescription for Affordable Drugs, which includes six large trade organizations for health-care purchasers and human-resources groups, urged Congress to take up comprehensive drug-pricing reform. The group said in its letter that the government should negotiate prices for drugs like Aduhelm where no market competition exists.

Democrats have proposed letting Medicare negotiate drug prices, but the policy faces GOP opposition and resistance from Democratic centrists who hold crucial votes.

Senator Ron Wyden, the Oregon Democrat who leads the Senate Finance Committee, cited Aduhelm Tuesday in a document outlining principles for drug pricing reform. One was to give Medicare authority to negotiate prices.

While high prices for some drugs may be justified by “remarkable clinical benefits,” Wyden wrote, “many, like the recently-approved Alzheimer’s drug Aduhelm, launch at prices far beyond any reasonable justification of the clinical value to patients, caregivers, or society.”

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