Shares of Biogen (BIIB 0.75%) were sinking 9.5% as of 10:48 a.m. ET on Wednesday. The decline came after the Centers for Medicare and Medicaid Services (CMS) on Tuesday released its proposed National Coverage Determination (NCD) for Biogen's Alzheimer's disease drug Aduhelm. The proposed NCD would only cover Aduhelm for Medicare beneficiaries enrolled in clinical trials.
Biogen had hoped that CMS would decide to provide full coverage for Aduhelm with Medicare beneficiaries. In the company's third-quarter conference call, chief financial officer Michael McDonnell said that Biogen expected revenue for the drug to especially pick up with a positive NCD decision this year. The revenue prospects for Aduhelm now appear to be in serious jeopardy. The steep sell-off for the biotech stock reflects this more-negative outlook.
So why didn't CMS opt to provide more extensive coverage for Aduhelm, which won Food and Drug Administration (FDA) accelerated approval in 2020? CMS Administrator Chiquita Brooks-LaSure said in a press release, "CMS has proposed an evidence-based coverage policy after experts reviewed all relevant available evidence and feedback received from stakeholders."
This NCD decision reflects the ongoing controversy over the FDA's approval of Aduhelm. Many in the healthcare community believe that the clinical data for the drug didn't support a positive approval decision.
Unsurprisingly, Biogen disagreed vehemently with the CMS decision. The company issued a press release that stated, "Alzheimer's patients and their families deserve to have choice and access to FDA-approved treatments."
This story isn't over yet. The NCD is only a draft proposal. The agency will accept public comments for 30 days. CMS expects to announce its final decision by April 11.