Biogen’s Alzheimer’s drug could cost Medicare billions of dollars a year, report finds

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

Adam Glanzman | Bloomberg | Getty Photos

Biogen‘s pricy novel Alzheimer’s drug, Aduhelm, might per chance possibly per chance well price Medicare billions of bucks a 365 days, based fully fully on an analysis printed Thursday by the non-profit Kaiser Family Foundation.

The Food and Drug Administration on Monday authorized the firm’s drug, the most necessary medicine cleared by U.S. regulators to slack cognitive decline in folk living with Alzheimer’s and the most necessary novel medicine for the disease in close to 2 a long time.

The biotech firm stated it is charging $56,000 for an annual route of the novel therapy, increased than the $10,000 to $25,000 price some Wall Avenue analysts enjoy been looking ahead to. That is the wholesale price, and the out-of-pocket price patients will surely pay will rely on their health coverage.

Alzheimer’s disease is estimated to enjoy an affect on greater than 6 million People, the gargantuan majority of whom are age 65 and older. Biogen has stated it expects about 80% of Alzheimer’s patients to be covered by Medicare, the federal health insurance program for the elderly.

It’s restful unclear how many Medicare beneficiaries will take Biogen’s drug, but even a conservative estimate would result in a “gigantic develop” in Medicare spending, based fully fully on KFF.

In 2017, close to 2 million Medicare beneficiaries worn one or more Alzheimer’s treatments covered below Medicare Fragment D, based fully fully on KFF, which analyzed claims knowledge. The neighborhood stated if a quarter of those beneficiaries are prescribed Aduhelm as a replace and Medicare pays 103% of $56,000 within the end to length of time, “total spending for Aduhelm in one 365 days alone might per chance possibly per chance well be close to $29 billion.”

Aduhelm shall be covered below Medicare Fragment B, KFF stated, which in overall covers FDA-authorized physician-administered medicines.

“If 1 million Medicare beneficiaries web Aduhelm, that would even be on the low terminate of Biogen’s expectations, spending on Aduhelm alone would exceed $57 billion bucks in a single 365 days – a ways surpassing spending on all assorted Fragment B-covered drugs blended,” the neighborhood stated. Entire Fragment B spending was $37 billion in 2019.

Biogen has confronted some criticism from Wall Avenue analysts and advocacy groups who puzzled how the firm might per chance possibly per chance well make clear the price, particularly as medical experts proceed to debate whether there’s enough proof that the drug surely works and the industrial faces criticism over drug costs.

On a call with investors Tuesday morning, Evercore ISI analyst Umer Raffat congratulated the Massachusetts-based fully fully firm on the drug’s U.S. approval ahead of asking executives to sigh its price.

“I attain mediate there’s a disconnect between some of the phrases that you just’ve got shared to your press releases, luxuriate in responsibility, procure entry to, health fairness, versus the price level, particularly given the most necessary care population,” he told executives.

Biogen executives stated Tuesday the total price resolve for the novel therapy is “substantiated” by the price it is expected to bring to patients, caregivers and society. They insisted the price is “responsible,” noting the disease charges the U.S. billions each and every 365 days.

The firm has committed to not elevating the value of the novel drug over the next four years. That being stated, executives stated they are “open-minded” and urged they might per chance per chance rethink the price because the firm assesses question over the following couple of years.