(Bloomberg) -- The U.S. Medicare program finalized a plan to restrict coverage for Biogen Inc.'s Alzheimer's therapy to patients in certain clinical trials, while offering a road map to cover drugs that show clinical benefit in the treatment of the disease.
The decision announced Thursday will effectively prevent most Alzheimer's patients from receiving Biogen's Aduhelm. Yet Medicare officials said that the policy would provide broader coverage to future drugs that show a clear benefit in large trials and get full approval from the Food and Drug Administration.
It's a blow to Biogen, which has been campaigning for the Centers for Medicare and Medicaid Services to reverse its stance since the initial coverage proposal was announced in January. Analysts at RBC Capital Markets said Thursday that the news, while in line with expectations, “likely spells the end for Aduhelm.” At the same time, it “leaves a clear door open” for other drugs in development. That includes potential new medicines from Eli Lilly & Co. and Roche Holding AG.
The decision strikes a middle ground, keeping a hard line on Aduhelm while creating a path to payment for newer treatments with solid evidence.
“Once the drug goes through traditional approval, then anyone is eligible who is a Medicare patient” and meets the drug's label criteria, said Tamara Syrek Jensen, a director in the Medicare agency's coverage and analysis group, on a call with reporters.
Biogen shares fell 1.1% in postmarket trading as of 6:43 p.m. New York time. The stock has given up all of its gains -- and then some -- since the FDA's surprising decision to grant accelerated approval to Aduhelm last June. Lilly shares rose 0.5% in extended trading before paring gains.
CMS's final policy undercuts “any remaining hope that Biogen can salvage Aduhelm as a viable product,” Bloomberg Intelligence analyst Marc Engelsgjerd said.
In a statement, Biogen called the CMS decision “unprecedented” and said it “effectively denies all Medicare beneficiaries access to Aduhelm, the first and only FDA-approved therapy in a new class of Alzheimer's drugs.”
The restrictions, including the distinction between accelerated approval and traditional approval, “have never been applied to FDA-approved medicines for other disease areas,” Biogen said, adding it's “carefully considering its options and will provide updates as the company further evaluates the business impact of this decision.”
Consistent Rules
Medicare officials said the policy will create consistent coverage rules for Alzheimer's drugs in development with reimbursement linked to the strength of the clinical benefits they show.
“This long-term pathway is meant to be nimble and respond to any new drugs in this class that are in in the pipeline that demonstrate clinical benefit,” Lee Fleisher, CMS's chief medical officer, told reporters.
“Our decision creates one standard and predictable pathway for national coverage that applies to every drug in this class.”
A handful of other new Alzheimer's drugs could be on the horizon. Eisai Co., which is partnered with Biogen, and Lilly have already started submitting applications to the FDA for their potential treatments.
Aduhelm's FDA clearance rested on two trials that showed the drug cleared the brain of amyloid, a protein associated with Alzheimer's disease. The studies produced conflicting results on whether that translated into the desired effect: slowing the rate of decline in patients in the early stages of Alzheimer's disease. One trial showed no effect, while the other showed a modest impact.
This potential for broader coverage upon full approval won't help people seeking Aduhelm in the short term, as Biogen is only gearing up another large trial now that is expected to take years to produce results. Patients who aren't in trials can pay for the drug on their own while federal authorities collect more evidence on the balance of risks and benefits. But Aduhelm's price tag of roughly $28,200 a year is likely to limit interest.
“Denying access to FDA-approved Alzheimer's treatments is wrong,” Harry Johns, chief executive officer of the Alzheimer's Association, said in a statement. “At no time in history has CMS imposed such drastic barriers to access FDA-approved treatments for people facing a fatal disease.”
Accelerated Approval
Drugmakers have increasingly turned to a regulatory process called accelerated approval, which lets companies introduce drugs for devastating diseases based on preliminary data that show they affect markers of the disease, even if they haven't been proved to improve patients' health.
The FDA's approval of Aduhelm through this pathway was particularly controversial because scientists disagree about whether the drug slows the progression of Alzheimer's. The drug removes amyloid, a brain protein linked to the disease, but whether that translates into benefits for patients is contested.
Outside advisers to the FDA opposed approving the drug, and three resigned in protest after the agency's clearance. The decision also triggered probes by members of Congress and an inspector general overseeing the agency.
Medicare officials rejected criticism that limiting coverage would chill future innovation in Alzheimer's therapies.
“The CMS final decision gives the public a clear definition of where the goal line is for what constitutes success in a trial,” the agency wrote.
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