Shares of drugmaker Biogen tumbled almost 7% yesterday after Medicare placed limits on its coverage of the company’s new Alzheimer’s drug.
Biogen had already slashed the price tag for the medication by half to $28,000 a year.
Medicare’s decision is preliminary, with a final ruling expected in April after a public comment period.
Medicare’s decision to only cover the FDA-approved drug Aduhelm in clinical trials marks a break from common practice.
That’s according to Washington University law professor Rachel Sachs, who said Medicare is sending a strong message “that just because the FDA approves the drug, doesn’t mean Medicare has to reimburse for it.”
Many physicians still question the Alzheimer’s drug’s benefits, including Stanford Neurology Professor Michael Greicius.
“The evidence to date suggests that it doesn’t work in improving clinical outcomes,” he said.
The industry trade group PhRMA called Medicare’s announcement a setback for patients suffering from Alzheimers’. Biogen, which declined an interview request, vowed in a statement to challenge Medicare’s decision.