An individual skateboards previous Biogen Inc. headquarters in Cambridge, Massachusetts, on Monday, June 7, 2021.
Adam Glanzman | Bloomberg | Getty Images
Biogen on Tuesday confronted tough questions from Wall Street analysts over the $56,000 annual price of its newly authorized Alzheimer’s drug, Aduhelm – a price tag executives are calling “fair” and “responsible.”
Shares of Biogen surged 38% on Monday after the FDA introduced it approved the company’s drug, scientifically referred to as aducanumab. It is the primary remedy cleared by U.S. regulators to gradual cognitive decline in individuals dwelling with Alzheimer’s and the primary new medication for the illness in almost 20 years.
The biotech firm stated it’s charging $56,000 for an annual course of the new therapy, greater than the $10,000 to $25,000 price some Wall Street analysts had been anticipating. That’s the wholesale price, and the out-of-pocket price sufferers will truly pay will rely on their well being protection.
Some analysts and advocacy teams instantly questioned how the corporate might justify the price — about 5 instances greater than anticipated — particularly as medical specialists proceed to debate whether or not there’s sufficient proof that the drug truly works and the trade faces criticism over drug costs.
The FDA departed from the recommendation of its impartial panel of outdoors specialists, who unexpectedly declined to endorse the drug final fall, citing unconvincing information.
“Our one concern here comes around the Aducanumab annual cost, and whether at $56K/year (we were at $10k) the sticker shock could further invigorate scrutiny on drug pricing,” Stifel analyst Jeff Preis informed buyers in a notice Monday.
On a name with buyers 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 price.
“I do think there’s a disconnect between some of the words that you’ve shared in your press releases, like responsibility, access, health equity, versus the price point, especially given the primary care population,” he informed executives.
J.P. Morgan analyst Cory Kasimov later requested executives how a lot federal medical health insurance program Medicare will probably be anticipated to pay for the drug and the way involved executives are concerning the “backlash” the trade will face over its pricing.
Biogen executives stated the whole price determine for the new therapy is “substantiated” by the worth it’s anticipated to carry to sufferers, caregivers and society. They insisted the price is “responsible,” noting the illness prices the U.S. billions every year.
More than 6 million Americans reside with the illness, in keeping with estimates by the Alzheimer’s Association. The firm stated it presently has the capability to offer 1 million sufferers with the drug yearly, with greater than 900 websites within the U.S. able to implement the new medication.
“We want to make sure Aduhelm is affordable for patients and sustainable for health-care systems,” one government stated.
The firm has dedicated to not elevating the price of the new drug over the subsequent 4 years. That being stated, executives stated they’re “open-minded” and recommended they might rethink the price as the corporate assesses demand over the subsequent few years.
Biogen CEO Michel Vounatsos joined CNBC on Monday and stated the drug’s price will enable the corporate to additional spend money on its pipeline of medicines for different illnesses. He added the corporate is working intently with Medicare in addition to non-public insurers.