Don’t worry, Meeshell will get his payout. Thanks to everyone for their sacrifice!
Biogen said Monday that it is cutting the price of its Alzheimer’s disease therapy Aduhelm by roughly half, and that it will reduce its own costs by approximately $500 million.
The news comes amid a rough period for the company and the stock. Early sales of Aduhelm have fallen far short of expectations, the company’s high-profile head of research and development has announced his unexpected retirement, European Union regulators said last week that they opposed the approval of Aduhelm, and the stock is down 31% so far in the second half of this year.
Among the many aspects of the Aduhelm approval and early rollout for which Biogen (ticker: BIIB) came under heavy criticism earlier this year was the dr-g’s U.S. list price of $56,000 a year. The figure raised the ire of both elected officials and of dr-g-pricing watchdogs.
The Institute for Clinical and Economic Review, an influential voice on dr-g pricing, calculated a fair price for Aduhelm of somewhere between $3,000-$8,400 a year, a fraction of the list price.
Biogen said it would now charge $28,200 a year for a patient of average weight. “Over the past several months, we have listened to the feedback of our stakeholders, and we are now taking important actions to improve patient access to ADUHELM,” said the company’s CEO, Michel Vounatsos, in a statement.
The company didn’t detail the $500 million in “cost-reduction” measures announced on Monday, but said that more on the cuts would be announced early next year. Two weeks ago, the healthcare news website STAT reported that Biogen’s tentative restructuring plan would result in more than 1,000 layoffs.
“These are difficult decisions necessary to sustain our mission to develop medicines for the most devastating neurological diseases,” Vounatsos said of the cost-cutting measures in the Monday statement. “We must bring our cost base in-line so we can continue to invest in future innovation and growth, retain and compete for outstanding talent, and provide acceptable returns to our shareholders.”
Biogen shares were up 2.4% in premarket trading on Monday. The stock is down 3% year to date.
Biogen said that it expects 50,000 new patients to begin treatment with Aduhelm next year. One key factor will be the outcome of a continuing process being undertaken by the Centers for Medicare and Medicaid Services to determine whether to limit coverage of the dr-g for Medicaid patients. The process, known as a National Coverage Determination, is expected to be completed in April.
A positive outcome for Biogen of the National Coverage Determination process could clarify the reimbursement status of the dr-g for patients and doctors, and might open the door to more patients initiating treatment.
Biogen said last week that it would start a required post-approval trial of the dr-g next year. It is expected to be completed in 2025.