A $56,000 annual price tag for a drug with questionable credentials?
Let the feeding frenzy begin for politicians who have long supported drug price reform and now have a poster child for their cause—Biogen’s Alzheimer’s disease treatment Aduhelm, which secured a controversial FDA approval on Monday despite mixed trial results.
Reaction from Washington, D.C. was immediate. In a tweet, Sen. Ron Wyden (D-Ore.) called the price “unconscionable” and said that Medicare should have the right to negotiate prices directly with drugmakers.
Rep. Ro Khanna (D-Calif.) told Bloomberg that Aduhelm’s price “is further evidence that our drug-pricing system is broken.”
The chair of the House Oversight Committee, Rep. Carolyn Maloney (D-N.Y.) added that the price “would cost Medicare billions of dollars," as quoted by the news service.
Drugmakers contend that in a highly competitive industry, the cost of developing new treatments for challenging diseases can extend into the billions of dollars.
In a conference call on Tuesday, Biogen CEO Michel Vounatsos and other Biogen executives faced a handful of questions concerning the drug's price.
“We believe that the price is substantiated by the value it is expected to bring to patients, caregivers and society,” Vounatsos said.
Chirfi Guindo, Biogen’s vice president of global product strategy and commercialization, pointed to the company’s “commitment to fund future research, not just in Alzheimer’s, but also in neurodegenerative diseases” such as amyotrophic lateral sclerosis and Parkinson’s. Biogen also considered the prices of other recently launched drugs in oncology and immunology when making its Aduhelm decision, Guindo said.
With Aduhelm becoming the first Alzheimer’s treatment to be approved in 18 years and 6 million people diagnosed with the disease in the United States, Biogen has a captive market. The list price for monthly infusions for a patient of average weight is $4,312, higher than analyst predictions and well beyond the $8,300 recommended annual cost from the drug-price watchdogs at the Institute for Clinical and Economic Review.
And because so many Alzheimer's patients are on Medicare, there isn't any "organized resistance" to the price, Bernstein analyst Ronny Gal wrote to clients earlier this week. He predicted that the price would trigger talk of reform in Washington.
“Such a high cost will facilitate new management strategies and could be a catalyst for movement on drug price reform,” Gal wrote.
By contrast, Karen Lynch, the CEO of CVS Health Corp., believes that the costs will be gradual. Speaking at Goldman Sachs annual global health-care conference, Lynch said that Aduhelm won’t significantly affect medical costs this year or next.
Not all reaction on Capitol Hill was negative. Rep. Cathay McMorris Rodgers (R-Wash.) tweeted that the approval gives patients and their families “renewed hope.” Allowing Medicare to negotiate drug prices would inhibit new innovation and prevent new treatments from reaching the market, Rodgers contends.
“We need more biomedical innovation so patients have a fighting chance,” she said. “That’s why we must stop Speaker (Nancy) Pelosi’s radical drug pricing scheme. It would halt innovation in its tracks.”
Quantifying the costs and benefits of drugs with blockbuster potential isn’t easy. Speaking on CNBC on Monday, Vounatsos defended Biogen’s strategy.
“Today the coast of Alzheimer’s is $600 billion to the U.S. in terms of direct and indirect cost,” Vounatsos said. “It is really time now that we invest some resources in treatment.”