Biogen’s Alzheimer’s Drug Could Cost Medicare Billions of Dollars Per Year, Report Says

Biogen’s Alzheimer’s Drug Could Cost Medicare Billions of Dollars Per Year, Report Says


A pedestrian walks past the headquarters of Biogen Inc. in Cambridge, Massachusetts on Monday, June 7, 2021.

Adam Glanzman | Bloomberg | Getty Images

BiogenicExpensive New Alzheimer’s Drug Aduhelm Could Cost Medicare Billions of Dollars Per Year, Analysis Says published Thursday by the nonprofit Kaiser Family Foundation.

The Food and Drug Administration on Monday approved the company drug, the first drug approved by U.S. regulators to slow cognitive decline in people living with Alzheimer’s disease and the first new drug against the disease in nearly two decades.

The biotech company said it was charging $ 56,000 for an annual price of the new treatment, higher than the price of $ 10,000 to $ 25,000 expected by some Wall Street analysts. This is the wholesale price, and the actual cost patients will pay will depend on their health coverage.

Alzheimer’s disease is estimated to affect more than 6 million Americans, the vast majority of whom are 65 years of age and older. Biogen said it expects about 80% of Alzheimer’s disease patients to be covered by Medicare, the federal health insurance program for the elderly.

It’s still unclear how many Medicare beneficiaries will take Biogen’s drug, but even a conservative estimate would result in a “substantial increase” in Medicare spending, according to KFF.

In 2017, nearly 2 million Medicare beneficiaries used one or more Alzheimer’s disease treatments covered by Medicare Part D, according to KFF, which analyzed claims data. The group said if a quarter of those beneficiaries were prescribed Aduhelm instead, and Medicare paid 103% of the $ 56,000 in the short term, “the total expenditure for Aduhelm in just one year would be almost $ 29 billion.”

Aduhelm will be covered by Medicare Part B, said KFF, which typically covers doctor-administered drugs approved by the FDA.

“If 1 million Medicare beneficiaries receive Aduhelm, which might even fall short of Biogen’s expectations, spending on Aduhelm alone would exceed $ 57 billion in a single year – far exceeding spending on all other drugs. covered by Part B combined, ”the group said. Total Part B spending was $ 37 billion in 2019.

Biogenic has been the subject of criticism from Wall Street analysts and advocacy groups who have asked how the company might justify the price, especially as medical experts continue to debate whether there is enough evidence that the drug actually works and that the industry is criticized for drug prices.

In a call with investors on Tuesday morning, Evercore ISI analyst Umer Raffat praised the Massachusetts-based company for approving the drug in the United States before asking executives to explain its price. .

“I think there is a mismatch between some of the words you’ve shared in your press releases, like accountability, access, health equity, versus price, especially given the primary care population,” he said. he declared to the leaders.

Biogen executives said on Tuesday that the full price of the new treatment was “justified” by the value it is expected to bring to patients, caregivers and society. They insisted the price is “responsible,” noting that the disease costs the United States billions each year.

The company has pledged not to increase the price of the new drug for the next four years. That being said, executives said they were “open-minded” and suggested they might rethink pricing as the company assesses demand over the next several years.

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