Since winning approval for the Alzheimer’s drug Aduhelm (aducanumab) in June 2021, Biogen (Nasdaq: BIIB) has faced a punishing string of setbacks. As a result, the company’s share price is currently trading near $200 per share — less than half of its $414.71 peak on June 10, 2021.
In April 2022, the Centers for Medicare & Medicaid Services (CMS) dealt one of the most toughest blows to Aduhelm’s future by limiting coverage for the drug to clinical trial participants.
The CMS decision was “certainly an unusual action from CMS,” said Corey Metzman, chief operating officer and co-founder of Chapter, a data-driven digital Medicare advisor. Typically, CMS grants Medicare coverage to FDA-approved drugs. “What was unique about [Aduhelm] is that it went through the accelerated approval process.”
Another wrinkle is that the drug failed to win the backing of the FDA’s Peripheral and Central Nervous System Drugs Advisory Committee. Following the FDA’s approval of Aduhelm, three of eight committee members eventually resigned. Among them was Dr. Aaron Kesselheim, a professor at Harvard University, who lambasted the approval as the “worst drug approval decision in recent U.S. history.”
The committee concluded that “the clinical evidence and the [approval] process was either rushed or was not as clear as it should have been,” Metzman said.
Almost a year after the approval decision, many U.S. neurologists continue to have doubts about Aduhelm’s efficacy and concerns about its safety profile.
Another complicating factor is the FDA’s use of a surrogate endpoint — reducing amyloid-beta plaque — in approving Aduhelm. The agency required Biogen to perform a confirmatory study to verify its efficacy. That Phase 4 ENVISION study is now underway.
And then there is Aduhelm’s cost. Soon after the FDA approved Aduhelm, some pundits speculated that the drug’s initial roughly $56,000 per year price tag would drive up premiums.
The Institute for Clinical and Economic Review (ICER) concluded in an analysis that the price is “not in reasonable alignment with its clinical benefits.”
Biogen ultimately responded to the overall controversy by dropping the price to about $28,000, hoping the price reduction would help woo CMS to support the drug.
Now, the CMS decision to limit Aduhelm coverage to clinical trial participants could take the pressure off the CMS budget, but it is speculative to predict how it might sway prices.
“Every year, the million-dollar question is: ‘How will CMS change the base Part B premium?'” Metzman said.
The premium increase from 2021 to 2021 was about 14.5%, significantly larger than the Social Security cost of living adjustment.
Many CMS observers projected a significant premium increase in 2022 — even without the approval of Aduhelm because the rate hike from 2020 to 2021 was relatively muted. CMS hesitated to “impose a large Part B premium increase in the first full year of COVID,” Metzman said. “So, I think everyone expected a bit of a catch-up this year.”
It is possible that CMS could lower premiums.
In April 2022, the Secretary of the Department of Health and Human Services Xavier Becerra signaled that he would consider lowering premiums following the final coverage decision for Aduhelm. “We’re going to make sure that seniors don’t pay more than they have to,” Becerra told The New York Times.
Still, such a rate decrease has yet to materialize. Such a reduction may happen in the “back half of the year,” Metzman mused. “I think that would be unprecedented.”
Since its founding in 2020, Chapter has “never seen a mid-year change,” Metzman said. “I think what you might see is a much more moderate increase — if any increase at all — in 2023 Part B premiums.”
It remains difficult to ascertain how the CMS decision to limit Aduhelm coverage might influence the future of Medicare coverage of novel expensive drugs. “It’s hard to know whether [Aduhelm] is a one-off through the unique circumstances of the drug or the accelerated approval,” Metzman said.
Drugs approved via the accelerated approval pathway could face “a higher risk” of not winning full CMS reimbursement, Metzman said. But, “I think it’d be hard to make any firm predictions,” he concluded.
In any event, many Alzheimer’s patients are desperate for novel treatments for the disease, which affects 6.5 million Americans, according to the Alzheimer’s Association.
Advocacy groups such as the Alzheimer’s Association and the Cure Alzheimer’s Fund have supported FDA’s decision to approve Aduhelm and hoped that it would win CMS reimbursement. “I think that the advocacy groups are both well-intentioned and noble in their intentions to ensure that patients get coverage,” Metzman said.
Filed Under: Biologics, Neurological Disease