Shares of Biogen Inc (NASDAQ: BIIB) are down about 8.0% on Wednesday after the U.S. Medicare programme refused to cover for its Alzheimer’s drug, Aduhelm, unless the patient is enrolled in an approved clinical study.
CMS director’s remarks on CNBC’s ‘Squawk on the Street’
Biogen was confident that coverage will help about 50,000 patients start treatment this year, but the announcement excluded many that could have benefitted.
Explaining the rationale behind CED (coverage with evidence development), Chiquita Brooks-LaSure, Centers for Medicare and Medicaid Services director, said on CNBC’s “Squawk on the Street”:
We want to make sure that it’s appropriate for the Medicare population. That’s why our team has outlined things that we want to see in the clinical trials. But this is a proposed determination. We welcome stakeholders to comment and will release a final determination later.
In December, Biogen reduced the price of Aduhelm by roughly 50% to $28,200 that many still warn could be a burden for the federal health coverage plan.
Why Cramer likes Lilly more than Biogen
CMS is expected to give its final verdict on April 11th. Whatever it decides will apply broadly to this entire class of medications, including experimental drugs under development at Eli Lilly & Co (NYSE: LLY).
Also on Wednesday, Jim Cramer said Lilly will beat Biogen in Alzheimer’s. In a separate discussion on CNBC’s “Squawk on the Street”, he said:
The winner will be Lilly. CEO Ricks gave a very good presentation yesterday at JPMorgan and said our tests are very different. They have a much bigger test that can roll back plaque. And I don’t think he ever intended to charge the exorbitant prices that Biogen charges for Aduhelm.
Lilly is down nearly 10% in less than a month, which, as per Cramer, is a mistake. The news comes more than a month after Biogen lost an appeal on its multiple sclerosis drug, Tecfidera.