A pedestrian walks past Biogen Inc. headquarters in Cambridge, Massachusetts on Monday, June 7, 2021.
Adam Glanzman | Bloomberg | Getty Images
Biogen’s expensive new Alzheimer’s drug Aduhelm could cost Medicare billions of dollars, according to an analysis published Thursday by the nonprofit Kaiser Family Foundation.
The Food and Drug Administration on Monday approved the company’s drug, the first US regulator-approved drug to slow cognitive decline in people with Alzheimer’s and the first new drug for the disease in nearly two decades.
The biotech company said it is charging $ 56,000 for an annual course of the new treatment, more than the $ 10,000-25,000 price some Wall Street analysts expected. This is the wholesale price, and the cost that patients actually pay depends on their health insurance plan.
It is estimated that Alzheimer’s disease affects more than 6 million Americans, the vast majority of whom are 65 years of age and older. Biogen estimates that about 80% of Alzheimer’s patients are covered by Medicare, the state health insurance for the elderly.
It is 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 were using one or more Alzheimer’s treatments that are covered under Medicare Part D, according to KFF. The group said if a quarter of those beneficiaries were instead prescribed Aduhelm, and Medicare paid 103% of $ 56,000 in the near future, “the total spending on Aduhelm in a year alone will be nearly $ 29 billion”.
According to the KFF, Aduhelm is covered by Medicare Part B, which generally covers FDA-approved, physician-administered drugs.
“If 1 million Medicare beneficiaries received Aduhelm, which may be on the lower end of Biogen’s expectations, spending for Aduhelm alone would exceed $ 57 billion in a single year – well above anything else covered by Part B. Medication together, ”group said. The total spend for Part B in 2019 was $ 37 billion.
Biogen has been criticized by Wall Street analysts and advocacy groups for questioning how the company could justify the price, especially as medical experts continue to debate whether there is enough evidence that the drug actually works and criticize the industry for drug prices becomes.
On a call to investors Tuesday morning, Evercore ISI analyst Umer Raffat congratulated the Massachusetts-based company on US approval of the drug before asking executives to explain the price.
“I think there is a discrepancy between some of the words you shared in your press releases like responsibility, access, health equity, and price, especially given the basic care population,” he told executives.
Biogen executives said Tuesday the overall price of the new treatment was “underpinned” by the value it is expected to bring to patients, caregivers and society. They insisted that the price was “responsible” and stated that the disease costs the US billions each year.
The company has pledged not to increase the price of the new drug over the next four years. However, executives said they were “open-minded” and suggested reconsidering the price as the company assesses demand over the next few years.