Biogen to cash in on new drug

The Food and Drug Administration's decision Monday to approve a new Alzheimer's medication over the fierce objections of its scientific advisers sets into motion one of the most controversial drug introductions in years.

For its manufacturer, Biogen, the new drug is poised to be a blockbuster. For just about everyone else, it is likely to further inflate high U.S. health care costs.

And that is despite the fact that there is not much evidence the drug actually works.

More than 6 million Americans have Alzheimer's and will be eligible to take the drug, which will be sold under the brand name Aduhelm and must be given as a monthly intravenous infusion. Biogen said it would charge an average of $56,000 a year per patient. There will probably be tens of thousands of dollars in additional costs for screening and monitoring patients.

The drug is all but certain to unleash a gusher of profits for Biogen — the drug is expected to become one of the best­selling pharmaceutical products in the world within a few years — as well as for the hundreds of clinics expected to administer the drug.

Those billions of dollars in anticipated costs are likely to be shouldered largely by Medicare.

The drug's approval could drive up insurance premiums, according to health care policy experts. And it could add new out-of-pocket costs for some families that are already facing years of staggering costs for caring for loved ones with Alzheimer's.

"This is really what keeps me up at night: A therapy of this cost is going to have enormous implications for everyone," said Dr. Joseph Ross, a pharmaceutical policy expert at Yale who sits on a committee that advises Medicare on some coverage decisions. "And by everyone, I literally mean you, too. There's going to be some 60- and 70-year-olds on your plan. If they start getting this treatment, you will see your premiums will go up."

Biogen said Tuesday it expects more than 900 sites across the country to soon be ready to administer the drug. But experts predict that demand, including from patients who have not previously sought care for their cognitive problems, will outpace the supply of trained specialists, scanning machines and chairs in which patients receive infusions.

"I don't think we'll be ready on Day One by any stretch. It's going to be a learning curve," said Dr. Erik Musiek, who sees Alzheimer's patients at the memory clinic at Washington University in St. Louis, where new patients already have to wait up to six months for appointments.

Aduhelm is the first new Alzheimer's treatment since 2003.

But there is not strong evidence that the drug helps patients, and it comes with potentially serious side effects. Prominent experts, including the FDA's independent advisory committee and a professional society representing geriatricians and other health care providers for older adults, urged the agency not to approve the drug.

"It's completely unconvincing that we should be using it at all," said Dr. Peter Bach, a drug pricing expert at Memorial Sloan Kettering Cancer Center. "In reality, we shouldn't be paying anything. We should be continuing to research until we have drugs that are shown to be effective."

Biogen's $56,000 price tag is higher than many Wall Street analysts had expected. The company's shares soared 38% on Monday.