How Biogen Made an Enemy of 1 of the Biggest Supporters of Its Alzheimer's Disease Drug

Many in the scientific community weren't thrilled that the U.S. Food and Drug Administration (FDA) approved Biogen's (BIIB 4.56%) Aduhelm in treating Alzheimer's disease. They didn't think the data supported approval. However, there were some organizations that strongly supported FDA approval of the drug.

Now, Biogen has made a move that's angered one top advocate for FDA approval of Aduhelm. In this Motley Fool Live video recorded on June 16, Motley Fool contributors Keith Speights and Brian Orelli talk about what Biogen did to make an enemy of one of its strongest supporters.

Keith Speights: Okay. Brian, I'm going to switch gears to, this is Brian's favorite company we're going to talk about right now. [laughs] Biogen. Brian was in a bad mood last week after Biogen won FDA approval of its Alzheimer's disease drug. There were all kinds of reasons why, but OK.

Brian, so here's the story that I noticed this week. The nonprofit Alzheimer's Association was a big supporter of FDA approval for Biogen's Alzheimer's disease drug, Aduhelm. Now that the FDA has approved the drug though, Biogen appears to have made an enemy out of this top supporter.

What happened in this situation? How does this potentially impact Biogen going forward?

Brian Orelli: Yeah. The association is upset about the $56,000-per-year price tag. I'm on the record saying I don't think the drug should have been improved, but I'm more upset with the FDA than I am with Biogen.

Biogen's a company, they want to make money, so I don't have a problem with them submitting the application. I have more problems with the FDA giving it accelerated approval when I don't think that was the right thing to do. I think they should have made Biogen go back and run a third study to improve their hypothesis. But I'm also fully supportive of the $56,000 price tag. To me that says that Biogen and its partner, Eisai, don't think that this is going to be a drug for the masses.

The association is in a tight spot, because they are an advocate for the masses and so they would like as low a price as possible. But I imagine there's some scientists at the association that might agree with me that they shouldn't have the approval and so maybe I'm not sure how much the association should be recommending the drugs. I think this might be more making sure that the next drug actually works. They may be setting Biogen up so that the next company that gets a drug approved doesn't come right behind Biogen and expect a $50,000 price tag on it.

I would imagine that most companies probably wouldn't do that. If you look at, let's say Lipitor or something like that, those weren't $50,000, and Pfizer didn't have to charge $50,000 a year for Lipitor because they could sell it to the masses. I think that if a drug that works and will get large-scale recommendations from doctors, prescriptions from doctors, then I think the companies will probably wouldn't price it that high.

Assuming I'm right then Biogen thinks this is a specialty drug, I don't think a lack of endorsement for the masses is that big of a deal. I should also note that Biogen can price the drug lower at some point in the future if they get additional sales and that justifies use for the masses.

Speights: Do you think that the Alzheimer's Association is maybe most concerned about the potential out-of-pocket cost, the co-pays that Medicare patients, in particular, might have to pay for this drug?

Orelli: Yeah, that's a big problem here because it's an infused drug, so instead of growing under Medicare Part D, D as in drug, it goes under Medicare Part B, and so then that has a much higher co-pay than the Medicare Part D does, and so I think that that's probably a big problem, although there's not much that Biogen can do about that because since used, it's got to be that way.