Biogen Inc (BIIB.O) on Monday cut the price of its Alzheimer’s drug by about half to $28,200 for an average weight person after facing slower-than-expected U.S. sales on complaints from hospitals that its high cost was not worth its benefits.
The U.S. Food and Drug Administration (FDA) approved the drug, Aduhelm, in June to treat the brain-wasting disease despite the view of its outside advisory panel that Biogen had not proven the treatment’s clinical benefit.
The U.S. Medicare program, which pays for health services for people over 65 years, has scheduled a January meeting for a national policy for the drug, making reimbursement more difficult in the interim.
Biogen’s $56,000 per year treatment price for an average weight person was seen as a significant cost burden on Medicare, which covers more than 60 million people.
The company said it hoped the new annual price of $28,200 will expand access to the drug among patients.
Biogen has been betting on Aduhelm, the first new treatment for the memory-robbing disease in nearly 20 years, to buffer a hit from its main revenue drivers facing rising competition.
Aduhelm brought in sales of $300,000 in the latest quarter, missing analysts’ estimates.
“We are big fans of Biogen’s decision to cut the price of Aduhelm, and, in our view, this makes some level of reasonable Medicare reimbursement more likely,” Stifel analyst Paul Matteis said.
Biogen said with insurance coverage and access to diagnostics and specialized centers roughly 50,000 patients may begin treatment with Aduhelm in 2022.
The FDA had initially approved the drug for all Alzheimer’s patients, but later recommended its use only in patients with mild cognitive impairment or mild dementia.
Biogen also announced cost-reduction measures for 2022 that could result in annual savings of about $500 million.