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Whatever it costs

7 June 2021 By Robert Cyran

A problem with America’s way of delivering healthcare is that it asks patients to put a price on hope. In part because the sick, or their insurers, are free to overpay for procedures and drugs that may not be useful or necessary, the country shells out more than most developed nations, without always getting better results. Biogen’s new Alzheimer’s drug, approved by the U.S. Food and Drug Administration on Monday, is an example of the “do whatever it takes” medical dilemma.

Biogen’s drug was the latest in a long series of attempts to help patients by removing clumps of proteins called amyloid beta from patients’ brains. The new drug, aducanumab, does indeed seem to remove those clumps, but it’s not clear this actually amounts to effective treatment of Alzheimer’s. In November, a panel of experts convened by the FDA concluded it didn’t. The regulator has cleared the drug for use anyway, at least for the time being.

The revenue that could create is tantamount to a bonanza. Perhaps 1.5 million Americans are eligible for the drug, based on Biogen estimates. The company said the price will be $56,000 per year. Assuming a quarter of eligible patients take it, that’s over $20 billion of revenue. The drugmaker run by Michel Vounatsos made around $13 billion in total revenue last year.

Drug launches often surprise to the downside, and the uncertainty over whether Biogen’s therapy will be widely used is higher than most. The lack of strong efficacy may dissuade doctors from prescribing it, and insurers may try not to reimburse. The FDA also has the option to pull the drug from the market if a subsequent study Biogen will perform doesn’t show patient benefit. And Biogen has to share profit with partner Eisai. The market added $18 billion to Biogen’s market capitalization on Monday, which – while a lot of money for a company worth $43 billion at Friday’s close – implies investors are cautious.

But even if demand disappoints, giving patients the option of demanding a drug of uncertain value risks exacerbating a wider crisis of U.S. medical spending. That makes the FDA’s decision questionable. The country already spends 18% of GDP on healthcare according to government figures, twice what Organisation for Economic Co-operation and Development members spend on average. Alzheimer’s is a cruel foe; so is a bloated, ruinous healthcare system.


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