A pedestrian walks past Biogen Inc. on Monday, June 7, 2021 in Cambridge, Massachusetts. Headquarters.
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Biogen’s new Alzheimer’s drug, EduHelm, could cost Medicare billions of dollars a year, according to an analysis published Thursday by the nonprofit Kaiser Family Foundation.
The Food and Drug Administration on Monday approved the company’s drug, the first drug approved by US regulators to slow cognitive decline in people with Alzheimer’s and the first new drug for the disease in nearly two decades.
The biotech company said it is charging $56,000 for an annual course of the new treatment, which is higher than some Wall Street analysts were expecting at a price of $10,000 to $25,000. This is the wholesale price, and the out-of-pocket cost patients will actually pay will depend on their health coverage.
Alzheimer’s disease is estimated to affect more than 6 million Americans, most of whom are 65 years of age and older. Biogen has said it expects about 80% of Alzheimer’s patients to be covered by Medicare, the federal health insurance program for the elderly.
According to KFF, it’s still unclear how many Medicare beneficiaries will take Biogen’s drug, but even a conservative estimate would “significantly increase” Medicare spending.
In 2017, nearly 2 million Medicare beneficiaries used one or more Alzheimer’s treatments covered under Medicare Part D, according to KFF, which analyzed claims data. The group said that if a quarter of those beneficiaries are prescribed Aduhelm instead and Medicare pays 103% of the $56,000 in the near term, “the total expense for Aduhelm in one year alone would be approximately $29 billion.”
Aduhelm will be covered under Medicare Part B, KFF said, which generally covers FDA-approved physician-administered drugs.
“If 1 million Medicare beneficiaries receive EduHelm, which may also be on the low end of Biogen’s expectations, spending on EduHelm alone would exceed $57 billion dollars a year — on all other Part B-covered drugs. jointly exceeding the expenditure,” the group said. Total Part B spending in 2019 was $37 billion.
Biogen has faced some criticism from Wall Street analysts and advocacy groups, who questioned how the company could justify the price, especially as medical experts continue to debate whether there’s enough evidence that the drug really does. and the industry faces criticism over drug prices.
“I think there is a disconnect between some of the words you shared in your press release, like responsibility, access, health equity, versus price point, especially looking at the primary care population,” he told officials.
Biogen officials said Tuesday that the overall price figure for the new treatment is “proofed” by the price it expects for patients, carers and society. He stressed that the price is “responsible”, noting that the disease costs US billions of dollars each year.
The company is committed to not increasing the price of the new drug over the next four years. That being said, executives said they are “open-minded” and suggested they may reconsider the price as the company assesses demand over the next few years.
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