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Biogen Inc.’s decision to cut the price of its Alzheimer’s drug Aduhelm in half starting Jan. 1 is “a day late and a dollar short,” according to Raymond James, which is not expecting the move to change the trajectory of the drug launch or restore Biogen’s battered reputation.
“If price represented the only barrier to adoption, we think there would have been some measurable out-of-pocket demand at this point,” analysts led by Danielle Brill wrote in a note to clients.
“Furthermore, even if the outcome of CMS’s NCD review is broad coverage (with no CED), we do not think Aduhelm adoption will drastically accelerate given our view that prescribers will prefer Lilly’s
LLY,
donanemab and Roche’s
ROG,
gantenerumab over Aduhelm,” the Raymond James team wrote, referring to rival treatments expected to come to market in the next two years.
The Centers for Medicare and Medicaid Services, or CMS, is expected to issue a draft national coverage decision, or NCD, on reimbursing the class of therapies that includes Aduhelm in January. A final decision is expected in April.
Aduhelm’s story is complicated. When the then-experimental therapy was going through late-stage clinical trials in 2019, the data indicated it didn’t work, and Biogen shelved the product. Then, months later, the biotech company resurrected it, introduced a new and more positive take on the older data, and announced plans to seek approval from the Food and Drug Administration.
Aduhelm, then called aducanumab, eventually received approval — and widely, for all people with the disease — though even that was controversial, and Biogen in July requested a narrower indication. Several members of the FDA’s advisory committee who had voted against the agency’s approving Aduhelm quit in response, and acting FDA commissioner Janet Woodcock in July announced a federal investigation into the process behind the Aduhelm approval.
Biogen
BIIB,
said the decision to lower the price will reduce it to $28,200 a year for a patient of average weight of 74 kg, or 163 pounds.
“Too many patients are not being offered the choice of Aduhelm due to financial considerations and are thus progressing beyond the point of benefiting from the first treatment to address an underlying pathology of Alzheimer’s disease,” Biogen Chief Executive Michel Vounatsos said in a statement. “We recognize that this challenge must be addressed in a way that is perceived to be sustainable for the U.S. healthcare system.”
Raymond James said the motivation may have more do with with pressuring CMS into issuing an NCD without a CED, or coverage with evidence development. A CED cycle is considered “completed” when CMS removes a requirement for study participation as a condition of coverage for one or more indications of an item or service.
Biogen said last week that it plans to submit a protocol for a Phase 4 confirmatory study for Aduhelm to U.S. regulators in March. The study is a condition of the accelerated approval granted to Aduhelm last year. It is expected to enroll 1,300 participants, dose the first patient in May and take about four years.
Brill wrote that, according to an analysis by Raymond James healthcare analyst Chris Meekins, CMS was leaning toward NCD with CED, “in which case, it seems feasible that Biogen would offer (1) to conduct their own study (in a reasonable time frame) and (2) to lower the price, in exchange for NCD with broad coverage and no CED.”
Another possibility is that the company was taking action to compete with the drugs coming from Lilly and Roche, with Lilly’s expected to launch in mid-2022 and Roche’s to come in the second half of 2023. “Both Lilly [and] Roche have indicated plans to price more responsibly than Biogen,” said Brill.
Biogen said it expects the pricing action to help make Aduhelm available to about 50,000 patients in 2022. The company is also planning to cut costs in 2022 to offset a hit to revenue from the continued entry of generics to the multiple-sclerosis market and the delayed uptake of Aduhelm.
An earlier note from Raymond James analyst Steven Seedhouse published in October after Biogen’s third-quarter earnings slammed the company for what he called “potentially the worst drug launch of all time.”
Don’t miss: Biogen’s new Alzheimer’s treatment had ‘potentially the worst drug launch of all time,’ analyst says
Biogen said it had garnered just $300,000 in sales in the third quarter, compared with Street expectations of $17 million.
Biogen shares were essentially flat Monday but have fallen 3% to date in 2021 while the S&P 500
SPX,
has gained 21%.
