Biogen Prepares to Fight Medicare Over Alzheimer’s Drug Limits
(Bloomberg) -- Biogen Inc. executives vowed to fight hard to reverse Medicare’s preliminary decision that would sharply limit coverage of the company’s Alzheimer’s drug, while saying more cost cuts and strategic measures are possible if the decision stands.
The drugmaker is urging patients and physicians to show their disapproval with the proposal to restrict reimbursement for Aduhelm to patients in randomized controlled trials, officials said Thursday on a call with analysts. Only a small number of patients, perhaps in the hundreds, with the resources and time to travel to major hospitals conducting the trials, would get access to the drug under the rule, Chief Executive Officer Michel Vounatsos said.
In December, the drugmaker announced it would make $500 million in annualized cost reductions, thought it hasn’t specified details. Company officials suggested on the call that if the final Medicare decision doesn’t go Biogen’s way, further cost-cutting measures are likely. Biogen may consider other options, Vounatsos said.
“We are engaging very closely with our board on tactical shorter measures but also strategic options,” he said. “I cannot go further.”
The reimbursement decision is just the latest chapter for Aduhelm, one of the most controversial drug approvals in recent Food and Drug Administration history. The drug hasn’t been shown to slow cognitive decline, as Biogen’s two large clinical trials produced contradictory results. Over the objections of its outside advisers, the FDA still approved the drug based on its ability to remove amyloid, a disease-linked protein, from the brains of Alzheimer’s patients.
Biogen rose 6% at 10:38 a.m. in New York. The shares have lost about 40% since the drug was approved in June.
The comments on strategic options are “likely to garner increasing attention,” RBC Capital Markets analyst Brian Abrahams said in a note to clients, “though we believe major upside scenarios like a potential takeout remain difficult to envision given the pipeline risk and challenges to base business.”
Many private insurers have refused to cover Aduhelm, and some top hospitals aren’t administering it. But Medicare is by far the most important payer, as the majority of Alzheimer’s patients are covered by the government health program for older people.
The proposal “will not only block access to Aduhelm, but it will also block access to future amyloid therapies for the indefinite future,” Vounatsos said on the call. Meanwhile, millions of patients in the early stages of Alzheimer’s who the drug is aimed at helping are worsening, he said.
Vounatsos said he had no dialogue with the Centers for Medicare & Medicaid Services, which oversees the health program, during an initial Medicare coverage review process last year, outside of a call with the administrator at the outset of the review. In the near future, he said, he hopes that he and his team can meet with CMS officials to share the company’s perspective.
Vounatsos said he anticipates the final decision will look different than CMS’s “dramatic” proposal.
Medicare’s coverage proposal is in a 30-day public comment period. During this time, it’s “really, really important” that people post their beliefs, Biogen’s U.S. President Alisha Alaimo said on the call. Patient-advocacy groups have slammed the proposal as one that discriminates against people with Alzheimer’s disease.
After that period closes, Biogen officials said on the call there is likely to be a 30-day period when CMS officials will meet with interested companies and advocacy groups. A final decision is expected by April 11.
Biogen is pushing for a less restrictive coverage that aligns with who was included in its clinical trials.
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