By Deena Beasley
(Reuters) -The U.S. government health plan for people age 65 and over on Thursday issued its final coverage policy for Biogen Inc (NASDAQ:BIIB)'s Alzheimer's drug, Aduhelm, moving forward with an unusually strict plan limiting it to patients in clinical trials.
For drugs similar to Aduhelm, the Centers for Medicare and Medicaid Services (CMS) said it would allow coverage if the medication is approved after a standard review by the Food and Drug Administration.
The FDA approved Aduhelm last June under an accelerated approval pathway, finding that the drug's ability to clear amyloid plaque from the brain offered enough evidence that it would likely help slow cognitive decline for Alzheimer's patients.
Medicare, however, disagreed with that assessment. The agency in January said it had significant doubts about the potential benefits of Aduhelm and proposed restricting use to clinical trials for it and similar experimental treatments.
Biogen, in an emailed statement, said the "unprecedented CMS decision effectively denies all Medicare beneficiaries access to Aduhelm," and said it is "carefully considering its options" as it evaluates the business impact of the decision.
Because Alzheimer's is an age-related disease, around 85% of people who might use the medicine are in the government plan.
Medicare's action "likely spells the end for Aduhelm ... though we believe this outcome was expected by most," RBC Capital Markets analyst Brian Abrahams said in a research note on Thursday.
Eli Lilly (NYSE:LLY) and Co, Roche Holding AG (OTC:RHHVF) and Eisai Co (OTC:ESALY) Ltd each have plaque-clearing drugs in late-stage development.
Under Medicare's final decision, drugs approved by the traditional FDA process that show clear patient benefit would not have any subsequent clinical trial requirements.
Both Lilly and Eisai, which is partnered with Biogen, have said they plan to seek accelerated approval of their Alzheimer's drugs. The companies did not immediately respond to requests for comment.
Wall Street analysts had projected last year that Aduhelm - the first new Alzheimer's drug to win U.S. approval in 20 years - would be a multibillion-dollar product. But sales have been marginal following the backlash over the FDA's controversial approval decision.
Wall Street currently estimates 2022 Aduhelm sales of just $69 million, according to Refinitiv.
Thursday's decision comes despite significant pressure from patient advocates and drugmakers seeking wider access to the drug. They argued that Medicare's trial requirement would unfairly restrict use of a drug approved by the FDA for a broader patient population.
Alzheimer's Association Chief Executive Harry Johns in a statement said, "Denying access to FDA-approved Alzheimer's treatments is wrong," adding that the patient group was "very disappointed" with Medicare's decision.
Patient groups last month launched a public advertising campaign aimed at persuading Medicare to loosen its proposed restrictions. They had also been meeting with lawmakers and Biden administration officials.
Others, including some prominent neurologists, have praised Medicare's plan, citing concerns over the approval of Aduhelm after only one of two late-stage trials showed that it helped slow cognitive decline for people with early Alzheimer's.
Investigations have been launched into the FDA's decision taken over objections of its own outside advisers, and doctors have held back on prescribing Aduhelm.
Roche and Eisai each expect to report results from late-stage Phase III trials later this year. Lilly anticipates Phase III results by mid-2023.