The repercussions of the stunning approval by the Food and Drug Administration (FDA) of Biogen's (NASDAQ:BIIB) Alzheimer's disease drug Aduhelm continue. Now, Congress is launching an inquiry into both the FDA approval and Biogen's pricing of the drug. In this Motley Fool Live video recorded on June 30, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss whether or not Biogen has anything to worry about with this congressional investigation.
Keith Speights: The United States House of Representatives Committee on Energy and Commerce has launched an inquiry into the FDA's approval of Biogen's Alzheimer's disease drug Aduhelm. This committee is also investigating Biogen's pricing of the drug.
Brian, what's going on with this? Is there anything here for Biogen or Biogen's shareholders to worry about?
Brian Orelli: As you said, the committee is investigating both the FDA and Biogen. On the FDA side, I'm on the record saying I don't understand how the FDA could have come to the conclusion of giving an accelerated approval for lowering amyloid plaques when we don't have a good handle on whether that actually improves cognition or at least slows the decline of cognition.
I don't really understand this approval. The FDA has put out quite a bit of information already on how it came to that conclusion -- pages and pages of historical synopses of meetings they had with Biogen and the internal meetings.
I don't know that any new information is actually going to come out of this congressional investigation. I think it's unlikely to affect the approval, so I don't really see it as being ... the FDA investigation is not going to have a major blow on Biogen.
They're also investigating Biogen's pricing of Aduhelm at $56,0000 per year, but I don't see that going anywhere either. It will create some bad press for Biogen, but I doubt that that will have any negative effect on sales of its drugs, so I don't see this congressional investigation as probably being a major blow for Biogen in any material way.
Speights: Yeah. It's not totally out of the ordinary that Congress investigates drugmakers. They launch inquiries, not all the time, but relatively often. I've seen several. But as far as I can remember, Brian, I can't recall any time that a congressional committee has investigated a drugmaker and anything material came out of it. I don't know, maybe you can think of a case. I can't think of any that I've seen.
Orelli: Just, in general, I think of not even our industry but every industry, I feel like there's a lot of investigation, but very little actual action after those investigations.
Speights: Yeah. Like you said, it can give a company a black eye -- and it could very well, in this case with Biogen, certainly give some politicians some time on camera on an issue that could be a hot-button issue for some.
But in terms of the real impact on Biogen, in this case, and its sales for Aduhelm, probably there's going to be much ado about nothing. Although you and I would probably argue that it's really not about nothing, but don't expect a whole lot to happen as a result of this.