Biogen Reduces Its Recently Approved Alzheimer’s Drug By 50 Percent

    Alzheimer drug maker Biogen Inc. has informed that it will cut the price of the drug Aduhelm by 50% in the U.S. as the high treatment cost has caused concerns among health insurers and patients. The company has decided to reduce the annual cost of treatment to $28200 to lower the out-of-pocket medical expense of the patients and reduce the burden of financial implications on the U.S. health system

    Aduhelm had received approval from the FDA in June, being the first drug for Alzheimer’s in 20 years. However, it was unusual for Biogen to drastically reduce the medication price soon after approval. Alzheimer’s disease affects some 6 million Americans, and the majority are elderly patients. 

    The treatment is met with skepticism from the medical experts and doctors who are unsure whether this medicine works. The payers view it from the prohibitive cost of $56000 per annum treatment. Private insurance companies say that they need more evidence of whether this drug is effective or not, as Aduhelm claims to slow down the rate of deterioration in Alzheimer’s patients. In response to a Bloomberg News survey, all the 25 large insurers who participated felt that this drug was unnecessary. 

    Many insurance companies are also waiting to see whether the U.S. government’s health schemes will cover Aduhelm. Medicare covers 63 million disabled and elderly Americans, and they said they will not decide until April 2022. It has, however, raised its premium to build a contingency fund to pay in the event of any demand in treatment claim. 

    Based in Cambridge, Massachusetts, Biogen saw its share price rise by 1.1% in morning trading Monday in New York. 

    Biogen and its Japanese-based partner Eisai Co. feel that cutting the drug’s price will boost the commercial prospects after the blowback response to its high launch price. The slow take-off affected the company, which is already facing pressure on its older blockbuster treatment, especially the multiple sclerosis treatment drug Tecfidera. Aduhelm had a pivotal role to play in Biogen’s future growth. 

    The company informed Monday that it is taking a series of steps to cut costs that will result in annualized savings of $500 million. More details are expected to be finalized in the coming weeks and publicly announced in the first quarter of 2022. 

    CEO Micheal Vounatsos said that the decisions were difficult but necessary to sustain the development of the medicine for a devastating disease like Alzheimer’s. The idea is to bring about an aligned cost base so that Biogen can continue investing in growth and innovation. 


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