Medicare won't pay for Eli Lilly Alzheimer's agent

Medicare has put up a big roadblock to Eli Lilly's ($LLY) Alzheimer's screening product Amyvid. The Centers for Medicare & Medicaid Services (CMS) says it will only pay for the diagnostic agent if patients using it are in clinical trials, at least for now.

As the key payer for U.S. seniors, Medicare controls the purse strings on the very market Lilly is targeting with Amyvid. And as one of the few new products Lilly has launched recently, Amyvid needs to succeed. Analysts have said it could bring in as much as $500 million annually--but only if it's widely reimbursed. If not, Lilly is looking at $100 million. And Lilly needs all the help it can get; the company recently announced another round of layoffs as it struggles to cope with its patent cliff.

It's not Amyvid's first brush with rejection. The FDA stiff-armed the product in 2011. The IV imaging agent highlights the beta-amyloid plaques that are one hallmark of Alzheimer's disease so they can be seen during an imaging scan. But beta amyloid can build up in people who don't have Alzheimer's, so the agency's expert advisers worried that the test would set off a series of false diagnoses.

Now, the CMS is asking Lilly for new clinical trials to prove Amyvid is worth using. And Medicare would only cover the tests for trial participants until the CMS is satisfied. "[E]vidence is insufficient" to show that the imaging test "improves health outcomes" for patients with dementia, the agency said in its draft decision.

Lilly says it's "disappointed" in the coverage decision. "CMS appears to be challenging the value of an adjunctive tool that can assist physicians in making a more informed diagnosis for patients with cognitive impairment," Lilly's Daniel Skovronsky, CEO of its Avid Radiopharmaceuticals unit, said in a statement. He went on to warn that the ruling "may stifle future innovation" in diagnosing Alzheimer's disease. You can be sure that Lilly will be lobbying CMS for a change of heart until the final decision comes down this fall.

- read the statement from Lilly
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