Opin­ion: CMS needs to do FDA’s job and lim­it the use of Bio­gen’s pricey new Alzheimer’s drug

Now that the FDA has ap­proved Bio­gen’s ex­pen­sive new Alzheimer’s drug with lit­tle clin­i­cal ben­e­fit po­ten­tial, but plen­ty of po­ten­tial to speed the bank­rupt­cy of the gov­ern­ment’s health care pro­gram for se­niors, it’ll be up to the Cen­ters for Medicare and Med­ic­aid Ser­vices to lim­it pay­ment for it and dri­ve the con­ver­sa­tion on ac­cess.

While such ac­cess de­ci­sions are nor­mal­ly re­served for the FDA, the agency ab­di­cat­ed its re­spon­si­bil­i­ty be­cause of the wide la­bel and be­cause it’s al­low­ing Bio­gen to take al­most a decade to fig­ure out if ad­u­canum­ab ac­tu­al­ly works.

But what CMS does now will have a mas­sive im­pact on the fi­nan­cial health and well-be­ing of its Medicare pro­gram, es­pe­cial­ly as Aduhelm may speed Medicare’s path to in­sol­ven­cy, cur­rent­ly set for 2026.

The fi­nan­cial im­pli­ca­tions of Aduhelm range from daunt­ing to down­right dis­turb­ing.

Ron­ny Gal

As Bern­stein biotech Ron­ny Gal point­ed out, “The to­tal cost of Medicare part B drugs was $37B in 2019, grow­ing at 13%. This is the bud­get seg­ment Pres­i­dent Trump called ‘out of con­trol’. If 1M pa­tients use Aduhelm at the cur­rent price point, to­tal Medicare part B spend­ing would dou­ble.”

While Bio­gen has said they will have the man­u­fac­tur­ing ca­pac­i­ty to treat 1 mil­lion Alzheimer’s pa­tients, Gal not­ed that the fi­nan­cial im­pli­ca­tions of a more re­al­is­tic sce­nario of just half that pop­u­la­tion “is equal­ly mind-bog­gling.”

If 50% of new­ly di­ag­nosed pa­tients start Aduhelm at the cur­rent price, then the to­tal cost to Medicare will be equal to the top five drugs in Medicare Part B com­bined (Mer­ck’s Keytru­da, Re­gen­eron’s Eylea, BMS’ Op­di­vo, Roche’s Rit­ux­an and Am­gen’s Pro­lia – at $10.7B based on the Medicare dash­board), ac­cord­ing to Gal.

“We can eas­i­ly see a sit­u­a­tion where the com­bi­na­tion of the un­re­strict­ed la­bel and the high price could lead in-pa­tient fa­cil­i­ties treat­ing se­vere AD pa­tients to [get] as many of their res­i­dents on treat­ment as pos­si­ble,” he wrote in an in­vestor note ear­li­er this month.

Rep. Pe­ter Welch (D-VT) sent a let­ter to Bio­gen’s CEO Michel Vounatsos on Tues­day, not­ing, “In 2019, the to­tal amount of spend­ing for all Part B drugs was on­ly $37 bil­lion, so Bio­gen’s price for one drug and one treat­ment would cost near­ly $20 bil­lion more than the en­tire ex­ist­ing Medicare Part B drug pro­gram for all ben­e­fi­cia­ries.”

The ma­jor­i­ty of Amer­i­cans suf­fer­ing from Alzheimer’s— more than 6 mil­lion peo­ple—are Medicare ben­e­fi­cia­ries, Welch added, not­ing, “Bio­gen has abused the pric­ing pow­er that it holds.”

So what will CMS need to do?

The cen­ters may be tasked with in­sti­tut­ing what’s known as a Medicare Na­tion­al Cov­er­age De­ter­mi­na­tion on Aduhelm, which is usu­al­ly re­served for Medicare ser­vices and not new drugs. But such a de­ter­mi­na­tion could pro­tect Medicare ben­e­fi­cia­ries from FDA’s wide la­bel, and re­strict the use of the drug to on­ly the sub­groups of se­niors who might ben­e­fit and who were stud­ied in Bio­gen’s failed tri­als.

Rachel Sachs

“If CMS were to use the NCD process to re­strict cov­er­age for Aduhelm be­yond the FDA’s broad la­bel for the drug, it would set a very im­por­tant prece­dent by delink­ing the FDA’s de­ci­sion to ap­prove a drug from CMS’s de­ci­sion to pro­vide re­im­burse­ment for it,” Rachel Sachs, law pro­fes­sor at Wash­ing­ton Uni­ver­si­ty in St. Louis, wrote re­cent­ly in Health Af­fairs.

Biden’s new­ly con­firmed CMS ad­min­is­tra­tor Chiq­ui­ta Brooks-La­Sure said she’s look­ing in­to all the ev­i­dence in de­cid­ing whether to make a na­tion­al cov­er­age de­ter­mi­na­tion.

Oth­ers are sug­gest­ing that CMS con­duct its own re­search on pay­ing for Aduhelm.

Pe­ter Bach, di­rec­tor of the Drug Pric­ing Lab at Memo­r­i­al Sloan Ket­ter­ing Can­cer Cen­ter, and Craig Garth­waite, di­rec­tor of the Pro­gram on Health­care at the Kel­logg School of Man­age­ment at North­west­ern Uni­ver­si­ty, called on Medicare’s re­search cen­ter, the Cen­ter for Medicare and Med­ic­aid In­no­va­tion, to eval­u­ate whether CMS should pay for the drug and whether those pay­ments are cost-ef­fec­tive.

To eval­u­ate such pay­ments while Bio­gen’s 9-year con­fir­ma­to­ry tri­al is on­go­ing, Bach and Garth­waite called on CMS to se­lect some coun­ties where it would re­im­burse Aduhelm’s cur­rent price, and oth­ers where it would re­im­burse $0, and see what the dif­fer­ences are.

“Medicare must study ad­u­canum­ab re­im­burse­ment now, and pre­pare to do the same when­ev­er the FDA ap­proves oth­er cost­ly, im­por­tant drugs that lack ev­i­dence of ef­fec­tive­ness,” Bach and Garth­waite wrote. “Drug com­pa­nies should know that if their med­i­cines reach the mar­ket be­fore the ev­i­dence is in, pay­ment will not be au­to­mat­ic.”

Adap­tive De­sign Meth­ods Of­fer Rapid, Seam­less Tran­si­tion Be­tween Study Phas­es in Rare Can­cer Tri­als

Rare cancers account for 22 percent of cancer diagnoses worldwide, yet there is no universally accepted definition for a “rare” cancer. Moreover, with the evolution of genomics and associated changes in categorizing tumors, some common cancers are now characterized into groups of rare cancers, each with a unique implication for patient management and therapy.

Adaptive designs, which allow for prospectively planned modifications to study design based on accumulating data from subjects in the trial, can be used to optimize rare oncology trials (see Figure 1). Adaptive design studies may include multiple cohorts and multiple tumor types. In addition, numerous adaptation methods may be used in a single trial and may facilitate a more rapid, seamless transition between study phases.

Marianne De Backer (L) and Jeff Hatfield

Bay­er nabs star biotech Vi­vid­ion with a $2B buy­out and an ‘arms-length’ pact, pulling a part­ner out of the IPO con­ga line

Vividion is canceling that IPO it filed. Instead of following the industry-wide migration to Nasdaq, the biotech that has captured considerable attention for its still-preclinical work finding cryptic pockets to bind to on proteins is going to work for Bayer now.

The pharma giant is putting out word today that it has bought out Vividion for $1.5 billion in cash and another half-billion dollars in milestones.

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Tadataka Yamada (Photographer: Kiyoshi Ota/Bloomberg via Getty Images)

Sci­ence pi­o­neer, phar­ma re­search chief, glob­al health ad­vo­cate and biotech en­tre­pre­neur Tadata­ka ‘Tachi’ Ya­ma­da has died

Tadataka Yamada, a towering physician-scientist who made his name in academia before transforming drug development at GlaxoSmithKline and developing vaccines for malaria and meningitis at the Gates Foundation, died unexpectedly of natural causes at his home in Seattle Wednesday morning.

He was 76. Frazier Healthcare Partners’ David Socks confirmed his death.

Known widely by the mononym “Tachi,” Yamada had a globetrotting career and arrived in industry relatively late in life. A 2004 Independent article noted GSK had asked Yamada to stay on beyond his approaching 60th birthday, the company’s usual retirement age. Yamada would continue working for the next 17 years, steering the Gates Foundation’s global health division for 6 years, funding Jim Wilson’s gene therapy work when few would touch it, launching Takeda Vaccines and co-founding a series of high-profile biotechs.

Josh Hoffman, outgoing Zymergen CEO (Zymergen)

UP­DAT­ED: Syn­bio uni­corn Zymer­gen jet­ti­sons found­ing CEO, cuts guid­ance as cus­tomers re­port lead prod­uct does­n't work

Zymergen, just months off a $500 million IPO that put the synthetic bio firm in rarified air, has now ejected its founding CEO and downgraded its revenue forecasts after customers reported its lead film product doesn’t work as advertised, the company said Tuesday afternoon.

CEO Josh Hoffman will leave his role and sacrifice his board seat immediately in favor of Jay Flatley, the former CEO of Illumina who will take the lead role on an interim basis as the company conducts a search for its next leader.

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Bio­gen, Ei­sai are push­ing for an­oth­er ac­cel­er­at­ed Alzheimer's OK — this time for BAN2401

Now that the door at the FDA has been opened wide for Alzheimer’s drugs that can demonstrate a reduction in amyloid, Biogen and its partners at Eisai are pushing for a quick OK on the next drug to follow in the controversial path of aducanumab.

In a presentation to analysts, Eisai neurology chief Ivan Cheung outlined some bullish expectations for their newly-approved treatment and set the stage for what he believes will be a fast follow for BAN2401 (lecanemab) — after a dry spell in new drug development that’s lasted close to 20 years.

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Rare dis­ease drug­mak­ers to Con­gress: Don't gut the ac­cel­er­at­ed ap­proval path­way

The controversy over the FDA’s accelerated approval pathway is heating up.

Last week, the FDA’s top oncology official Rick Pazdur said the pathway is “under attack,” largely due to the agency’s recent accelerated approval of Biogen’s controversial Alzheimer’s drug and the surrogate endpoint used in that decision. In the meantime, three accelerated approval indications have been pulled since July 1 (two from Bristol Myers Squibb and one from Merck in recent weeks), even as Pazdur called on critics of the pathway to not miss the more positive, big picture, with some cancer drugs proving to be enormously helpful and approved years before their confirmatory trials were completed.

Zymergen co-founders Zach Serber, Josh Hoffman, and Jed Dean (Zymergen via website)

Zymer­gen's sud­den im­plo­sion shocked biotech. A lin­ger­ing loan could make things even worse

As former synbio unicorn Zymergen picks up the pieces from its spectacular implosion Tuesday, an outstanding loan from Perceptive Advisors — the only blue-chip biotech crossover investor to touch Zymergen’s fundraising efforts — could make the situation worse, according to public documents.

In December 2019, more than a year before Zymergen filed for what would eventually become a $500 million IPO, the “biofacturing” firm signed a $100 million credit facility with Perceptive to help supplement the nearly $700 million the company had raised across four VC rounds.

Janet Woodcock (Bill Clark/CQ Roll Call via AP Images)

HHS ex­tends Aduhelm in­ves­ti­ga­tion in­to the ac­cel­er­at­ed ap­proval path­way, wad­ing in­to a brew­ing con­tro­ver­sy

The government investigation into how the FDA approved Aduhelm appears to point well beyond the agency’s ties with Biogen in the leadup to its approval of their controversial Alzheimer’s drug Aduhelm.

The HHS Office of Inspector General posted a notice Wednesday that officials will review the accelerated approval pathway, the regulatory mechanism the agency used to approve the drug in the face of conflicting data over whether it could actually slow Alzheimer’s patients’ mental decline. Now the Aduhelm OK is just one branch of an investigation called for last month by acting FDA commissioner Janet Woodcock.

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FDA slaps back small-cap's bid to re­pur­pose 50-year-old chemother­a­py

When the German drugmaker Medac handed off a decades-old cancer compound to their US subsidiary in February, it thought it would be smooth sailing to market. After all, the drug had recently been approved in Europe and was available in Canada.

On Tuesday, though, Medac and that publicly traded subsidiary, Medexus, announced the FDA had rejected the compound, telling the company they would need to get new data and reanalyze their Phase III trial before marketing it in the US.