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Biogen faces difficult questions about the 56-year price of the new Alzheimer’s drug

A man rides a skateboard past the headquarters of Biogen Inc. in Cambridge, Massachusetts, on Monday, June 7, 2021.

Adam Glanzman | Bloomberg | Getty Images

On Tuesday, Biogen faced difficult questions from Wall Street analysts about the annual cost of the newly approved drug for Alzheimer̵

7;s disease, Aduhelm, at $ 56,000 – a price that executives call “fair” and “responsible.”

Shares of Biogen rose 38% on Monday after the FDA announced it was approving the company’s drug, scientifically known as educationumab. It is the first drug approved by US regulators to slow cognitive decline in people living with Alzheimer’s disease, and the first new drug for the disease in nearly two decades.

The biotech company said it was charging $ 56,000 for an annual course of the new treatment, higher than the $ 10,000 to $ 25,000 expected by some Wall Street analysts. This is the wholesale price and the actual costs that patients will pay will actually depend on their health coverage.

Some analysts and advocacy groups immediately questioned how the company could justify the price – about five times higher than expected – especially as medical experts continued to discuss whether there was enough evidence that the drug actually worked and the industry was criticized for its prices. medicines.

The FDA deviated from the advice of its independent group of outside experts, who unexpectedly refused to approve the drug last fall, citing unconvincing data.

“Our only concern here is about the annual cost of Aducanumab and whether at $ 56K / year (we were at $ 10k) the shock of stickers could further boost control over drug pricing,” Stifel analyst Jeff Price said in a note Monday.

During a conversation with investors on Tuesday morning, Evercore ISI analyst Umer Rafat congratulated the Massachusetts-based company on the approval of the drug in the United States before asking executives to explain its price.

“I think there is a discrepancy between some of the words you have shared in your press releases, such as responsibility, access, equity in healthcare, relative to the price point, especially given the primary care population,” he told executives.

JP Morgan analyst Corey Kasimov later asked executives how much the federal health insurance program Medicare would expect to pay for the drug and how concerned executives were about the “reaction” the industry would face because of its prices.

Biogen executives said the total cost of the new treatment is “justified” by the value it is expected to bring to patients, caregivers and society. They insisted that the price was “responsible,” noting that the disease cost billions in the United States each year.

More than 6 million Americans live with the disease, according to estimates by the Alzheimer’s Association. The company said it currently has the capacity to provide the drug to a million patients a year with more than 900 sites in the United States ready to implement the new drug.

“We want to make sure that Aduhelm is accessible to patients and sustainable for health systems,” said one CEO.

The company is committed not to raise the price of the new drug for the next four years. With that in mind, executives said they were “open” and offered to rethink the price as the company assessed demand over the next few years.

Biogen CEO Michelle Vunazos joined CNBC on Monday and said the price of the drug would allow the company to invest further in its pipeline of drugs for other diseases. He added that the company works closely with Medicare as well as with private insurers.

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