Medicare to Review Coverage for New Alzheimer’s Drug Aduhelm

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Medicare officials are beginning a review of

Biogen Inc.’s

BIIB -2.55%

new Alzheimer’s drug to decide whether to standardize coverage of the medicine nationally, a widely-anticipated step that would allow the government to place limits on who can receive the medicine.

The review of Biogen’s drug, called Aduhelm, will include an analysis of published clinical studies and medical society guidelines, as well as two public hearings later this month to assess the therapy’s benefits, the U.S. Centers for Medicare and Medicaid Services said on Monday.

The so-called national coverage determination will decide whether Aduhelm is a “reasonable and necessary” treatment. If so, Medicare, the federal government’s health-insurance program for the elderly, is required by law to pay for it.

Yet it could still place restrictions on the drug, such as by limiting it to patients who match the criteria approved by the U.S. Food and Drug Administration.

“We want to consider Medicare coverage of new treatments very carefully in light of the evidence available,” said CMS Administrator

Chiquita Brooks-LaSure.

“Our process will include opportunities to hear from many stakeholders, including patient advocacy groups, medical experts, states, issuers, industry professionals, and family members and caregivers of those living with this disease.”

The agency said it expects to make a proposed decision within six months, after which the public will have 30 days to submit comments.

A final decision is expected within nine months and is intended to apply to any future drugs similar to Biogen’s that help clear the brain of amyloid, a sticky protein that accumulates in the brains of Alzheimer’s patients, the agency said.

Currently, contractors that administer Medicare for the government across 12 regions are determining coverage for their areas. That could create inconsistencies in access.

There are a range of possibilities for what a national coverage decision could look like, including unrestricted coverage, non-coverage, or deferring to Medicare contractors, CMS said.

The FDA’s approval of Aduhelm has drawn criticism from some doctors and health economists who contend the drug’s benefit is unproven and its estimated annual $56,000 per patient cost could add billions of dollars in government spending.

Michael Yee,

a Jefferies analyst, said in a note to clients that the Medicare review is a positive because it will remove uncertainty over the drug’s availability amid the recent controversy.

“We think CMS will ultimately reimburse” Aduhelm for early stage Alzheimer’s patients, Mr. Yee wrote, “allowing the drug to move forward with greater uptake.”

Last week, the FDA revised its prescribing recommendations for Aduhelm amid criticism that its initial approval applied to all Alzheimer’s patients rather than the more narrow group Biogen studied the drug in.

The new prescribing label says the medicine should be started in people with mild symptoms of the degenerative memory-loss disease that affects six million people in the U.S.

The following day, FDA Acting Commissioner

Janet Woodcock

asked for a federal investigation into meetings between agency staff and Biogen executives before the approval decision.

Write to Joseph Walker at joseph.walker@wsj.com

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