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October 22, 2021

Biogen expected $12M in sales for its Alzheimer's drug. It's gotten $300,000.

Daily Briefing

    Biogen on Wednesday reported its new Alzheimer's drug, Aduhelm, brought in just $300,000 in revenue during the third quarter—falling far below the forecasted $12 million in sales for the drug's first full period of availability.

    3 questions providers must ask themselves about Aduhelm’s approval

    Background

    Biogen originally sought FDA approval for Aduhelm in 2019, after a company analysis of clinical trial data found a high dose of the medication provided a small benefit in slowing cognitive decline and that the drug was effective at removing the beta-amyloid proteins associated with Alzheimer's disease.

    In 2020, a panel of independent experts convened by FDA reviewed the clinical trial data, determined there was not enough evidence to suggest the treatment had significant benefit for patients, and recommended against approval. However, some patient groups advocated strongly for approval, especially because Alzheimer's patients have few other medical options to slow their cognitive decline.

    Ultimately, FDA on June 7 announced its decision to approve Aduhelm on a conditional basis. The drug costs the average patient around $56,000 annually, with each monthly infusion costing $4,300.

    In August, HHSOffice of Inspector General (OIG) announced it would investigate the approval process used to initially approve the Alzheimer's drug after receiving a request from acting FDA Commissioner Janet Woodcock. OIG's review is not expected to be complete until 2023. 

    Meanwhile, CMS is in the process of a National Coverage Determination (NCD) analysis to determine if it should standardize coverage of the drug—a decision that could limit who receives it. A draft decision is expected in January, and a final decision is expected by April.

    According to the Times, health insurers will likely remain hesitant to cover the drug until CMS' final decision is made next year. For instance, multiple Blue Cross Blue Shield health plans have said they won't cover the drug, and the Department of Veterans Affairs in August decided not to include the drug in its formulary of available medicines, the Times reports. Similarly, in separate statements, the Cleveland Clinic and Mount Sinai Health System said they will not administer the drug to patients.

    Aduhelm falls short of sales expectations

    On Wednesday, Biogen released its financial report for the third quarter, which marks Aduhelm's first full quarter of market availability. The report stated that the drug had garnered $300,000 in revenue, falling short of the forecasted $12 million expected by Biogen and Wall Street analysts.

    Many experts credited the shortfall to concerns about the high annual cost of Aduhelm, as well as the controversial approval process, the Times reports.

    However, Biogen CEO Michel Vounatsos told Wall Street analysts on Wednesday that the company was "not panicking" about the low sales, adding that the primary cause behind Aduhelm's slow uptake is the "lack of clarity on reimbursement," which he said CMS will clarify by 2022. He said the company continues "to believe in Aduhelm's long-term potential."

    Vounatsos added that Biogen currently has no plans to lower Aduhelm's price tag because "price doesn't come up as the first worry." (Herman, Axios, 10/21; Robbins, New York Times, 10/20)

     

    Advisory Board's take

    What Aduhelm's poor performance actually says about current care infrastructure

    By Nicholas Hula and Katie Schmalkuche

    The news of Aduhelm's poor performance isn't entirely unexpected—especially after major health systems and payers declined to administer or cover the drug. But like we said when the FDA approved Aduhelm in June—this drug is a starting point, not a finish line. So, is it possible that Aduhelm's negative performance isn't just a reflection of Aduhelm itself, but also the lack of infrastructure in place to use it well?

    Flipping the script—what changes?

    Flip this story's script for a moment and imagine if Aduhelm did receive positive reception. In that reality, do we have the imaging and infusion infrastructure to diagnose and administer the drug to millions of Americans? Do we have a sustainable memory care infrastructure that can manage a massive influx in patients? In many places, the answer to those questions is no.

    And beyond care infrastructure, we have a different kind of infrastructure gap. Treatments whose impacts can manifest over time should be studied over time, and our understanding of efficacy (and therefore value, and even price) should change over time as well. But the infrastructure we have in place—for clinical studies, value assessments, and decision-making—aren't set up to account for how evidence changes over time. 

    For these reasons, health care industry leaders shouldn't view this news and dismiss calls for investment in memory care or abandon the hope that managing Alzheimer's disease for millions of patients is closer than ever. Instead, this should serve as a wake-up call. It's not unrealistic that there will be a highly effective Alzheimer's drug in the next few years—be that Aduhelm itself (should phase 4 confirmatory studies prove the drug's ability to slow cognitive decline), Eli Lilly's donanemab which has posted promising outcomes to date, or one of the many other therapies in development.

    Four questions to consider in preparation for the future of Alzheimer's care

    In addition to this looming lack of infrastructure, there are also long-term ripple effects that a successful Alzheimer's drug could generate. To prepare for these future realities, consider the four questions below that we discuss in our new report, The Future of Neurodegenerative Care:

    1. How can we meet the needs of younger memory care patients should new treatments and diagnostics incentivize and allow individuals to identify cognitive decline earlier in their lives?
    2. How can we avoid deepening inequities in Alzheimer's care?
    3. Are we complementing advances in treatment with accessible and innovative diagnostics and care pathways?
    4. Are payers, providers, and life sciences companies prepared to coordinate to ensure individuals have financial access to treatment?

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