Medicare to Pay for Biogen’s New Alzheimer’s Drug in Clinical-Trial Patients

Medicare officials said they would cover Biogen Inc.’s BIIB 2.64% controversial Alzheimer’s disease drug Aduhelm as part of randomized clinical trials.

The clinical trials are intended to gather evidence on the drug’s safety and effectiveness and would apply to similar drugs if they are approved, the Centers for Medicare and Medicaid said in a proposed policy issued Tuesday.

Patients enrolling in trials supported by the National Institutes of Health would also be eligible for coverage, according to CMS’s draft policy.

CMS said the Aduhelm studies must limit enrollment to patients in the early-stages of disease and have lab tests confirming that their brains have accumulated amyloid, a sticky protein linked to Alzheimer’s disease that Aduhelm is designed to clear.

Aduhelm has faced widespread criticism since its approval in June, in part because concerns that its price would balloon Medicare drug spending if millions of patients start taking it.

Biogen initially launched the drug at an average price per patient of $56,000 annually, but recently backtracked and slashed the list price in half to $28,200.

Medicare coverage is crucial for Aduhelm’s future because most of the patients eligible to take it are covered under the federal health program for people over 65 years and the disabled.

Also, many private health insurers take their cues about whether to pay for medicines from Medicare’s coverage policies.

Aduhelm has had scant uptake since the Food and Drug Administration approved it in June 2021 despite opposition from a panel of outside advisers and some of the agency’s own scientists and senior leaders.

Without a national coverage decision, Aduhelm coverage requests are currently handled on a case-by-case basis by regional contractors that administer benefits on behalf of the government. That will remain the case until Medicare issues a final coverage policy in April, a Biogen spokeswoman said.

Many doctors and hospitals have opted to wait for Medicare’s decision before prescribing and administering Aduhelm, which requires monthly intravenous infusions administered by a healthcare professional.

Part of the hesitancy is that Aduhelm is a “buy and bill” product that hospitals or clinics purchase and pay for upfront, and then seek reimbursement later from patients’ insurance after they have been infused with the medication.

Hospitals are reluctant to provide expensive drugs like Aduhelm if they aren’t sure they will get paid back.

Meanwhile, some hospitals have said they won’t provide the drug at all, citing uncertainty about its safety and effectiveness.

The FDA cleared Aduhelm’s use under a special process called “accelerated approval” intended to help patients with serious diseases get promising new drugs faster and before they are definitively proved to be effective in clinical trials.

The FDA has said that it used the accelerated approval process for Aduhelm because of lingering uncertainty about its benefit to patients. The agency is requiring Biogen to complete an additional study to confirm its effectiveness; if the study fails, the agency can theoretically pull the drug off the market.