Awaiting a Medicare coverage decision on its controversial Alzheimer’s drug, Biogen is making an unexpected goodwill gesture—and initiating an expected restructuring—as it faces pressure from multiple fronts.
In an unusual move, Biogen has decided to cut Aduhelm’s price in the U.S. by about half, effective Jan. 1, 2022, the company said Monday. For a patient weighting 74 kg (163 pounds), the annual maintenance cost of Aduhelm will be $28,200 after the adjustment.
In tandem with the price cut, Biogen said it will launch an overhaul with the goal to cut $500 million in annual costs. Translation: Layoffs are likely around the corner. The company said it’s still finalizing the details and will unveil the plan in the first quarter next year.
Drugmakers regularly raise their prices in the U.S. and rarely voluntarily cut their list prices. Biogen’s move comes after the Centers for Medicare & Medicaid Services (CMS) projected a 15% rise to Medicare Part B premiums in 2022 and cited the potential inclusion of Aduhelm as the main reason for the increase. The estimate triggered another round of criticism toward the pricey and controversial Alzheimer’s drug.
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Aduhelm’s current $56,000-per-year list price surprised many industry watchers when Biogen released it after an FDA approval in June. Before the big revelation, industry watchers had largely expected the price to land at around $10,000 to $30,000. For its part, influential U.S. drug cost watchdog the Institute for Clinical and Economic Review has said the antibody therapy should be priced between $3,000 to $8,400 per year for it to be cost-effective among patients with early Alzheimer’s disease.
Meanwhile, Aduhelm faces big questions around its efficacy and safety, given seemingly contradictory outcomes findings from two phase 3 trials and a link to a potentially life-threatening complication. The reduced price “takes into consideration the questions raised about this first class of therapies, the potential eligible population and revised pharmaco-economic assumptions,” Biogen said in a Monday statement.
The CMS recently started a national coverage determination process to weigh the profile of Aduhelm and other similar antibodies that target toxic beta amyloid plaques in the brain to treat Alzheimer’s. Lilly, for one, unveiled last week that it will complete a rolling submission of rival drug donanemab by March 2022.
Describing the upcoming CMS decision as a “critical time for the Alzheimer’s disease community,” Biogen CEO Michel Vounatsos said in a statement that the company hopes its actions “will facilitate patient access to these innovative Alzheimer’s treatments.”
A recent survey conducted by Bloomberg found that most of the 25 major insurers in the U.S. were unsure of Aduhelm’s benefit-risk profile. UnitedHealth Group, for one, has said it’s waiting for Medicare’s decision to make its own. The CMS evaluation process is expected to have a draft decision by January 2022, with a final verdict due in April.
Biogen estimates that nearly 50,000 patients would start treatment with Aduhelm in 2022 if insurance coverage were in place alongside access to diagnostics and specialized centers.
Aduhelm’s market performance has been miserable given all the uncertainty surrounding the launch. Its third-quarter sales were a meager $300,000. Biogen cited “delayed uptake” of Aduhelm, along with the continued impact of generic competition to its multiple sclerosis franchise, as the reason for the $500 million restructuring.
To confirm Aduhelm’s profile and to allay physicians’ concerns, Biogen plans to start an FDA-mandated phase 4 clinical trial of the drug next May, with an initial data readout expected in 2026.