Biogen Stock Is Tumbling Because Its Alzheimer’s Drug Has Hit Another Snag

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Medicare officials proposed restricted coverage of EduHelm, potentially limiting sales.

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Courtesy of Biogen

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Medicare should only cover Biogen’s EduHelm drug for certain recipients who are enrolled in qualifying clinical trials, officials from the organization that oversees the proposed national health insurance program said Tuesday evening.

If approved, the decision would restrict access to the first Alzheimer’s therapy approved in decades by the Food and Drug Administration.

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In a news release announcing the draft decision, Dr. Lee Fleischer, chief medical officer of the Centers for Medicare and Medicaid Services, said that even though the drug shows promise, it could also harm patients. “This harm can range from headache, dizziness and falls to other potentially serious complications such as brain bleed. We believe that any proper assessment of a patient’s health outcomes before arriving at a final decision is both a harm and a benefit. should be assessed.”

CMS will allow public comment its proposal for 30 days. The agency will announce its final decision by April 11.

Shares of Biogen (ticker: BIIB) fell 7% in late trading. In a statement, a Biogen spokesperson said, “The draft coverage determination negates the daily burden of people living with Alzheimer’s disease. This will significantly limit patient access to FDA-approved treatments.”

Biogen’s drug faced fierce opposition from FDA experts. Three high-profile medical experts left the FDA’s advisory panel on central nervous system drugs to protest the drug’s approval.

Biogen stock has gone haywire lately due to problems with Aduhelm. The stock is down nearly 40% since the FDA approved the drug on June 7. Sales of the drug have been negligible, and the company announced it was halving EduHelm’s price and cutting costs by $500 late last year. On Thursday the health news website STAT reported that Aduhelm prescriptions stay low, writing that an organization that negotiates contracts for nearly all US academic hospitals orders only a handful of vials of EduHelm a day.

Determining whether Americans can access a particular drug is usually left to the FDA, but questions about EduHelm’s efficacy and its high price have set off an unusual sequence of events. The CMS is ongoing to determine whether to cover EduHelm, known as a national coverage determination, rarely run for drugs.

The implications for Biogen are most immediate, but the ruling will also affect Eli Lilly (LLY), which is waiting for the FDA to approve its rivals donnamab and Roche Holding (RHHBY).

Write to Jacob Sonenshine at [email protected] and Josh Nathan-Kazis at [email protected]

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