Jan 3, 2023

Congressional Probe Concludes Biogen Set Egregious Price Tag on Aduhelm to Maximize Profits, Knew Price Tag Could Lead to Affordability Issues for Patients

In case you missed it, the U.S. House Committee on Oversight and Reform and the U.S. House Committee on Energy and Commerce recently completed an 18-month investigation into the egregious pricing of Biogen’s unproven Alzheimer’s treatment Aduhelm. The committees released a 45-page report titled “The High Price of Aduhelm’s Approval: An Investigation into FDA’s Atypical Review Process and Biogen’s Aggressive Launch Plans,” which details how Biogen came to set a massive launch price of $56,000 on the drug for an annual course of treatment.

The committees’ investigation found that Biogen executives priced Aduhelm at more than twice the amount recommended by physicians and health plans surveyed by the company prior to the drug’s approval and launch. According to coverage of the report from STAT News, “Biogen knew the risks of setting a high price for Aduhelm but chose to push the envelope in hopes of creating the best-selling product in pharmaceutical history.”

Internal company documents obtained by the committees show that in 2020 Biogen hired outside consultants to survey health plans and physicians to gauge their reception to different potential price points for Aduhelm. The consultants then presented a report to Biogen highlighting risks and rewards at different launch prices for the drug. At a launch price between $15,000 and $20,000, Biogen would maximize the number of patients able to access the drug. At a price below $40,000, Biogen would limit “payer and physician pushback.” Any price above $40,000 would favor revenue maximization for the company. After the FDA approved Aduhelm in June 2021, Biogen set a massive price tag of $56,000 on the drug despite a lack of evidence on the treatment’s clinical value for patients.

As STAT News reports, Biogen knew the burden for this payment would fall on taxpayers and the U.S. government, given that “[r]oughly 85 percent of potential patients would be Medicare beneficiaries.” At a price point of $56,000 for an annual course of treatment, “[e]ven if just 250,000 people were to receive the drug, it would cost Medicare more than $12 billion a year, which would be 26 percent of the program’s annual budget for medicines administered in a physician’s office and nearly five times as much as the next costliest drug.” Internal documents also show that executives were aware that Medicare patients could face financial challenges affording the drug, with some Medicare patients potentially facing, “out-of-pocket costs of up to 20 percent of their income.”

In addition. Biogen executives knew that only “public scrutiny” could temper demand for the drug or force a retreat on its egregious pricing. To overcome this obstacle, the company designed, “an aggressive outreach and marketing campaign, one that could cost more than $3 billion over four years — more than double what the company spent to develop the drug.”

The House Committees’ report on the pricing of Aduhelm should serve as another reminder that Big Pharma companies will also put profits over people — and that brand name drug companies must be held accountable to lower prescription drug prices.

Read more on the finalized National Coverage Determination decision for Aduhelm from the U.S. Centers for Medicare & Medicaid Services (CMS) that helped protect patients and taxpayers from Biogen’s price-gouging HERE.

Read more on Big Pharma’s year of bad behavior in 2022, including setting increasingly out-of-control launch prices on new products, HERE.

Learn more about market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.