Biogen faces powerful questions over $56K a 12 months worth of newly authorized Alzheimer’s drug
An individual skateboards previous Biogen Inc. headquarters in Cambridge, Massachusetts, on Monday, June 7, 2021.
Adam Glanzman | Bloomberg | Getty Pictures
Biogen on Tuesday confronted powerful questions from Wall Road analysts over the $56,000 annual value of its newly authorized Alzheimer’s drug Aduhelm – a price ticket executives are calling “truthful” and “accountable.”
Shares of Biogen surged 38% Monday after the FDA introduced it authorized the corporate’s drug, scientifically referred to as aducanumab. It’s the first treatment cleared by U.S. regulators to sluggish cognitive decline in individuals dwelling with Alzheimer’s and the primary new medication for the illness in almost 20 years.
The biotech firm mentioned is it charging $56,000 for an annual course of the brand new therapy, larger than the $10,000 to $25,000 worth some Wall Road analysts have been anticipating. That is the wholesale worth, and the out-of-pocket value sufferers will truly pay will rely upon their well being protection.
Some analysts and advocacy teams instantly questioned how the corporate might justify the worth – about 5 instances larger than anticipated – particularly as medical specialists proceed to debate whether or not there’s sufficient proof that the drug truly works and the business faces criticism over drug costs.
The FDA departed from the recommendation of its impartial panel of outdoor specialists, who unexpectedly declined to endorse the drug final fall, citing unconvincing information.
“Our one concern right here comes across the Aducanumab annual value, and whether or not at $56K/12 months (we have been at $10k) the sticker shock might additional invigorate scrutiny on drug pricing,” Stifel analyst Jeff Preis advised traders in a observe Monday.
On a name with traders Tuesday morning, Evercore ISI analyst Umer Raffat congratulated the Massachusetts-based firm on the drug’s U.S. approval earlier than asking executives to elucidate its worth.
“I do suppose there is a disconnect between a few of the phrases that you have shared in your press releases, like accountability, entry, well being fairness, versus the worth level, particularly given the first care inhabitants,” he advised executives.
J.P. Morgan analyst Cory Kasimov later requested executives how a lot Medicare shall be anticipated to pay for the drug and the way involved they’re concerning the “backlash” the business will face over its pricing.
Biogen executives mentioned the whole worth determine for the brand new therapy is “substantiated” by the worth it’s anticipated to deliver to sufferers, caregivers and society. They insisted the worth was “accountable,” noting the illness prices the U.S. billions every year.
Greater than 6 million Individuals reside with the illness, in response to estimates by the Alzheimer’s Affiliation. The corporate mentioned it at present has the capability to supply 1 million sufferers with the drug yearly, with greater than 900 websites within the U.S. able to implement the brand new medication.
“We wish to be certain that Aduhelm is reasonably priced for sufferers and sustainable for health-care techniques,” one government mentioned.
The corporate has dedicated to not elevating the worth of the brand new drug over the following 4 years. That being mentioned, executives mentioned they’re “open-minded” and prompt they might rethink the worth as the corporate assesses demand over the following few years.
Biogen CEO Michel Vounatsos joined CNBC on Monday and mentioned the drug’s worth will enable the corporate to additional put money into its pipeline of medicines for different illnesses. He added the corporate is working intently with federal medical health insurance program Medicare in addition to non-public insurers.
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