Skip to main content
The Keckley Report

Biogen’s Aduhelm Approval Leaves Two Questions Unanswered

By July 6, 2021March 1st, 2023No Comments

On June 7, Biogen’s (BIIB) Aduhelm (aducanumab) was approved through the FDA’s accelerated approval process for treatment of Alzheimer’s offering hope to 6 million who suffer from the debilitating cognitive decline in America.

Company website: The accumulation of amyloid beta plaques in the brain is a defining pathology of Alzheimer’s disease. In clinical trials, ADUHELM reduced amyloid beta plaques by 59 to 71% at 18 months of treatment.

The approval doubled the company’s stock price (from a 12-month low of $223.55 to high of $468.55) and ignited simmering discontent with the FDA approval process and subsequent details about the drug’s pricing.


Prior to its approval (2015-2018), Biogen and its Tokyo-based partner Eisai had conducted 2 large trial studies that produced contradictory results: in one, high doses of aducanumab slowed patient decline by 22% over 18 months but the drug was infective in the second. In March 2019, the FDA told the company that its results were “inconclusive”, so the studies were halted.

Undeterred, the company then launched Project Onyx to gain FDA approval collaborating with agency officials to shepherd the drug through the approval process. Then, on November 4, 2020, the FDA and Biogen released an unprecedented joint report that characterized the same results as “exceptionally persuasive.” On June 7, the agency granted conditional approval over objections from its outside scientific advisory committee (which voted 8-1 against approval with 2 abstaining) and a report by the Institute for Clinical and Economic Research (ICER) that called the company’s data was “insufficient and inconclusive.”

The company now has until 2030 to complete a study to confirm whether Aduhelm’ s properties slow the brain-destroying disease and slows mental decline in patients. In the interim, patients will have access to monthly Aduhelm infusion treatments costing $56,000/yr. which doesn’t cover infusion services by medical professionals and periodic brain scans to monitor possible side effects such as brain swelling and other costs.

Since the FDA Announcement Last Month, the Fallout has been Palpable:

The Alzheimer’s Association called Aduhelm’s pricing “simply unacceptable” and suggested it “will pose an insurmountable barrier to access” though Biogen is major financial supporter of the organization.

The medical community cried foul: 87% think the drug’s approval was politically tainted and 68% say they’d not use the drug themselves given the lack of evidence for its efficacy.

Policymakers and economists have challenged the price-tag: According to ICER, Aduhelm would be cost-effective if priced between $3,000 and $8,400– 85% to 95% discount off the $56,000 list price. At its current price, its cost to Medicare could exceed a bank-breaking $300 billion if only 70% receive the medication.

And Congress is investigating: On June 25, Energy and Commerce Chairman Frank Pallone (D-NJ) and Oversight and Reform Chairwoman Carolyn B. Maloney (D-NY) announced an investigation into the approval process and pricing of Aduhelm.


The approval process for Aduhelm and subsequent fallout comes at a critical time for the health system: the Delta variant has heightened anxiety about a third wave among public health and provider organizations. Hospitals, physicians and long-term care providers are still in recovery mode from the pandemic. The science behind Operation Warp Speed and role of the FDA have drawn heightened criticism in Far-Right media and from partisans. And among consumers, the negative economic impact of the ‘lost year’ on low- and middle-income households lingers.

Biogen and its Japanese partner Eisai have broken no laws. The 43-year-old company followed the rules. And the prospect of a therapeutic for Alzheimer’s offers hope after at least 25 failed trials in the 115 years since Alois Alzheimer spotted clogs in the brains of his patients.

But this approval is likely to result in significant unintended consequences:

Heightened Scrutiny of Drug Prices and the Complicated Roles Played by PBMs, Distributors, GPOs, Rebates and Industry Business Practices

The global market for prescription drugs is $1.07 trillion; the U.S. market represents 48% of that spending so understandably the industry is protective of its financial interest and the convoluted array of scientists, manufacturers, distributors, prescribers, patent lawyers and consultants who benefit. Biogen’s cushy relationship with regulators and its impunity toward its prices and affordability is a lightning rod. Consider…

The FTC announced last week its intent to examine consolidation among drug companies, pharmacy benefits managers (PBM) and hospitals that deter competition. Think tanks are examining ways to modify drug patents that disable competition. Companies like Costco are offering PBM services on a per employee per month basis with Navitus Health Solutions enabling a transparent pass-thru of drug-cost savings to employers vs. the behind closed doors deals made between PBMs, health insurers and other conspirators. And controls on annual drug price increases are being imposed in a third of state legislatures unwilling to wait for federal action. The approval of Aduhelm will accelerate these efforts.

Increased Tension between Hospitals and Pharma Companies

In 2020 aka the ‘lost year,’ hospital spending decreased 7.0% while prescription drug spending increased 6.1%. They account for 41% of total spending (31% hospitals, 10% prescription drugs), but with dramatically different trajectories for post-pandemic growth and sustainability.

Hospitals must diversify to offset cuts to reimbursement by government and private payers while absorbing higher costs including the prescription drugs they use in patient care. A 2019 study found hospital drug costs increased 38.7% in a recent 3-year period while overall revenues for inpatient and outpatient care increased 18.5% in the same period. In many classes of hospital-centric drugs, like anesthetics, parenteral solutions, chemotherapy and others, prices increased 80%. So, financial recovery for hospitals is dependent on cost-containment, but controlling their spending on drug costs is impervious to normal market mechanisms that constrain supply chain costs. For expensive specialty drugs like Aduhelm that require hospital support for monthly infusion treatments and periodic brain scans, hospitals will be on the hook for the drug hoping Medicare will cover most of their costs. And the likelihood that Medicare will cover Aduhelm under its Part B that allows a 6% mark-up for drugs is unlikely to offset total costs of administration.

Increased Antagonism Toward the Hospitals, Drug Companies and “the Medical System” by Consumers

According to the Bureau of Labor Statistics, from 1990 to 2018, median earnings for the average U.S. household increased 117%. In the same period, natural gas prices increased 73%, prices for food eaten at home increased 78%, electricity costs increased 82%, gas prices at the pump increased 118% and rent increased 130%. Concurrently, prices for physician services increased 130%, prescription drug prices increased 182% and household medical care prices for hospitals and clinical facilities increased 189%.

Per Gallup, 76% of consumers say they pay too much for their healthcare. Per a recent Kaiser Family Foundation survey, Americans blame drug costs (78%) and hospital costs (71%) for the growing unaffordability of healthcare. And media coverage about the spike in drug addictions during the pandemic and the complicit role of Big Pharma and prescribers play has eroded public support for ‘the system.’

Aduhelm joins a list of high-profile specialty drugs that offer hope to millions who suffer and profit to the manufacturers, distributors, PBMs and prescribers who bring it to market. But its suspicious path to approval leaves two important questions unanswered:

Will Aduhelm’s evidence (efficacy and effectiveness) prove to be compelling and lead to provider adoption? Does Aduhelm really work?

Will the hospitals and Biogen address affordability for Aduhelm directly by disclosing all costs involved in their manufacturing, distribution and administration of the drug in clinical settings? Knowing actually what’s spent in producing and administering the drug would go a long way in restoring public confidence in how the system works.

Stay tuned.


P.S. Data sharing regulations from HHS’ Office of the National Coordinator for Health Information Technology, began last Thursday. Per Maverick Health Policy: “Not only are they (health plans) supposed to have interoperable claims and clinical data ready to go to any third-party app, and very updated and accurate provider directories, but plans are also expecting new rules (maybe today) that will implement the No Surprises Act. We may be on the right track to making more information available, but it will take a while to get these great ideas into a simplified and seamless format so people can actually use all this amazing digital health information.”


Aduhelm (Official Patient Website)

“FDA grants accelerated approval for ADUHELM™ as the first and only Alzheimer’s disease treatment to address a defining pathology of the disease”; June 7, 2021; Biogen

“FTC Authorizes Investigations into Key Enforcement Priorities”; July 1, 2021; FTC

“Will Biogen’s new Alzheimer’s drug’s burden on Medicare be big, huge, or catastrophic?”; June 28, 2021; STAT

“The Spread in Hospital Chargemaster Prices for Common Drugs: How New Hospital Transparency Regulations Fall Short”; June 2021; GoodRx

“Inside ‘Project Onyx’: How Biogen used an FDA back channel to win approval of its polarizing Alzheimer’s drug”; June 29, 2021; STAT

“Is the Alzheimer’s Association really pushing Biogen to lower its new drug’s price — or is it lip service?”; July 6, 2021; STAT

Bob Herman, “Physicians Will Feel Pressure as Gatekeepers of Aduhelm”; July 6, 2021; Axios

Brandon Lee and Alex Ruoff “Healthcare Briefing: Biden Plans Order Amid Health-Care Mergers”; July 1, 2021; Bloomberg Government

Alex Kacik “Feds and states aim to bolster healthcare merger and acquisition oversight”; June 28, 2021; Modern Healthcare

“Costco Brings its Low-Price Magic to Employer-Paid Drug Plans”; April 22, 2021; Bloomberg

“Does new Alzheimer’s drug work? Answers may miss 2030 target”; July 1, 2021; AP

“Revised analysis nudges up cost-effective price for Biogen’s Alzheimer’s drug to $3,000 to $8,400 a year”; June 30, 2021; STAT

Goeff Colvin “Big Hospitals vs. Big Pharma”; April 8, 2021; Fortune


Covid Fact File Round-Up (CDC, WHO, Johns Hopkins)

  • New cases are at 12,000 a day, the lowest since testing became widely available. The average of fewer than 300 daily deaths– a decline of 23% over the past two weeks.

  • 67% of adults have had at least one vaccination; 847,000 vaccine doses are being administered/day.

  • 16 states have fully vaccinated more than half of their residents; 4 states have recorded less than half of adults with at least one dose.

  • The more contagious Delta variant now accounts for 26% of coronavirus cases in the US.

OIG Report: Hospital preparedness for Pandemics Should be Focused on Accreditation Process

In a new report, the CMS Office of the Inspector General concluded CMS’ internal controls could not determine that all accredited hospitals updated their emergency preparedness plans to include this planning until 2022 due to accreditation organizations’ quality and safety inspection cycles.

“CMS’s Controls Related To Hospital Preparedness For An Emerging Infectious Disease Were Well-Designed And Implemented But Its Authority Is Not Sufficient For It To Ensure Preparedness At Accredited Hospitals”; June 2021; OIG


US News & World Report County Health Rankings 2021: Healthiness Correlates with Household Income

USNWR analyzed 84 metrics in 10 health categories for 2,875 counties of the 3,142 across the U.S. where data was available. Categories weightings: Population Health (14.2%), Equity (12.23%), Education (12.15%), Economy: (11.1%), Housing (9.5%), Food & Nutrition (8.8%), Environment (8.6%), Public Safety (8.5%), Community Vitality (7.6%), Infrastructure (7.5%). Results:

  • Los Alamos County in New Mexico is home to the healthiest community in America with high scores on housing, population health, and infrastructure propelled the county.

  • 6 of the top 15 counties in the ranking are among the 15 counties with the highest per-capita incomes in the country; 8 are among the top 15 by median income per household.

“America’s Healthiest County Has a Lab – and a Formula – for Battling COVID-19” US News & World Report June 29, 2021; U.S. News

Poll: 1 in 10 Aware of Hospital Price Transparency Rule

Less than 10% of Americans know hospitals are required to disclose their prices online, according to research by the Peterson-KFF Health System Tracker. Findings:

  • 9% of people ages 18-64 knew hospitals were required to disclose their prices online vs. 10% for people ages 65 and older.

  • When asked if they or a family member have searched online for a hospital service’s price in the past six months, 23% of respondents ages 18-29 said yes, 16% of respondents ages 30-49 said yes, 10% of respondents ages 50-64 said yes, and 9% of respondents ages 65 and older said yes

Peter KFF Health System Tracker

The Oncology Institute (TOI) Merging with Deerfield Mgmt Backed SPAC in the Latest Value Based Care Move

The deal- valued at $842M (EV)- is considered the first of its kind and one that Deerfield is keen on, seeing it as a natural mutation from existing investments such as CareMax, a value-based model for senior care. Specialty groups like oncology are getting into the mix of a space historically dominated by primary care models such as Iora, One Medical, Cano Health, Oak Street and others. And considering that oncology is one of the most expensive specialties for payors, combined with growth opportunities (projected at ~ 15% annually) of a roughly $200B industry in the US alone, the space is ripe for disruption.

The deal brings multiple funds together in the capitalization of TOI: existing investors like Havencrest Capital Management, ROCA, and M33 Growth will hold a roughly 48% ownership stake in the SPAC. PIPE investors include- in addition to Deerfield- Fidelity and Redmile.

“The Oncology Institute Jump-Starts Next Wave of Value-Based Care”; June 30, 2021; PEHub


Supreme Court Ends 2020-2021 Term, Announces 21-22 Slate: Healthcare will be Prominent (Again)

The Supreme Court ended its 2020-2021 term last month with notable healthcare rulings including:

  • June 1:SCOTUS declined to consider a Johnson & Johnson appeal challenging a $2.1 billion civil judgment awarded to 20 women who alleged the company’s talcum baby powder caused ovarian cancer.

  • June 17: SCOTUS ruled plaintiffs lacked standing in California v. Texas dismissing their argument that the elimination of the individual mandate in the Affordable Care Act in 2017 did NOT render the entire law unconstitutional.

  • June 28: SCOTUS declined to hear an appeal by the American Hospital Association (AHA), along with numerous hospitals and health systems, challenging HHS’ site-neutral pay policy, allowing the regulation to move forward.

In its 2021-2022 term, the court will hear several healthcare cases on its docket including an American Hospital Association lawsuit challenging HHS’ decision last year to cut reimbursement rates for certain outpatient drugs to hospitals participating in the 340B drug discount program (AHA v. Becerra), a 2005 rule changing how Medicare disproportionate share hospital (DSH) payments are calculated (Becerra v. Empire Health Foundation) and, a case (CVS Pharmacy v. Doe) asking whether HIV patients can sue CVS for discrimination because they’re required to get their medication via mail-order pharmacies if they want to avoid paying out-of-network rates.

Jeannie Suk Gerse “The Supreme Court’s Surprising Term”; July 5, 2021; New Yorker

“Supreme Court to hear cases on Medicare and 340B payments”; July 2, 2021; Modern Healthcare

Medicaid Expansion: Oklahoma Begins Expanded Enrollment; Missouri, Mississippi Expansion Delayed

Last Thursday, Oklahoma became the 37th state to official open enrollment in an expanded Medicaid program while efforts in Mississippi and Missouri have stalled.

Related study: Wake Forrest-Boston U researchers analyzed inpatient discharge data in 11 expansion states and 6 non-expansion states between 2012 and 2017 concluding “..increased insurance coverage in ACA Medicaid expansion states did not lead to changes in the hospitals where patients with lower socioeconomic status received care and did not decrease racial and ethnic segregation.”

Lasser et al “Changes in Hospitalizations at US Safety-Net Hospitals Following Medicaid Expansion”; June 30, 2021; JAMA Network

Administration Advances No Surprises Act Implementation with Ban on Surprise Billing

Last Friday, the Biden administration announced its plan to ban surprise medical billing as part of its No Surprises Act agenda passed by Congress last year and signed into law by President Trump.

The 411-page interim rule, which takes effect in January 2022, prohibits surprise billing of patients covered by employer-sponsored and individual marketplace plans, prohibits balance billing of patients for fees in excess of in-network reimbursement amounts and related business practices.

The major sticking point: the methodology for defining the “qualifying payment amount,” which the law defines as an insurer’s historical median in-network rate for a given service is yet to be specified which is necessary for insurers to include in forthcoming plans for 2022 that are now being developed.

Alia Paavola “CMS unveils surprise-billing rule: 10 things to know”; July 5, 2021; Becker’s

Study: Social Determinants Account for 37% of Medicare per Beneficiary Spending Variation

Cornell Weill researchers analyzed Medicare per beneficiary spending across 3038 counties in 2017. Key findings:

  • Counties with the lowest rates of SDOH spent an average of $4,447 per Medicare beneficiary while counties with the highest rates of SDOH spent an average of $16,570. Social determinants of Health (SDOH) were associated with 37.7% of this price adjusted variation.

  • Mean Medicare price-adjusted per beneficiary spending for counties in the highest spending quintile was $3785 higher, or 49% higher, than spending for bottom-quintile counties (mean [SD] spending per beneficiary, ($11 464 vs $7679.).

  • Related Study: Methodology for designating hospitals that serve disadvantaged populations inconsistent.

  • In this cross-sectional study, among 4465 US hospitals qualified for Centers for Medicare & Medicaid Services hospital performance measures between 2014-2017, one-third were identified as caring for a high proportion of patients with social risk factors across 7 definitions of social risk; fewer than 1% met all 7 definitions. Most hospitals serving patients with social risk factors could be identified using 3 or 4 definitions.

  • “Without consensus on how to define disadvantaged hospitals, policies to support such hospitals may be applied inconsistently.”

Zhang et al “Social Determinants of Health and Geographic Variation in Medicare per Beneficiary Spending”; June 10, 2021; JAMA Network

Matty et al “Identification of Hospitals That Care for a High Proportion of Patients With Social Risk Factors”; July 2, 2021; JAMA Network