Biogen CEO Michel Vounatsos will step down as the company continues to cut about $1 billion in costs annually, Biogen said Tuesday, after Medicare limited coverage for its Alzheimer’s drug, Aduhelm, to patients in clinical trials last month.
Biogen said in a press release Vounatsos will continue to serve as CEO and remain on the company’s board until a new successor is chosen.
Vounatsos said in a statement he is proud of Biogen’s “unparalleled capabilities” in neuroscience, and that he is leaving in a “time of promise” for the company.
The company also said it will substantially eliminate the sales infrastructure related to Aduhelm, along with other cost reductions, which are intended to provide annual savings of $500 million.
This is in addition to the $500 million cost-cutting initiatives Biogen announced in December, according to the company, bringing the annual cost-saving goal to $1 billion.
Biogen shares rose 3% Tuesday morning following the announcement.
The Food and Drug Administration approved Aduhelm for use in patients with mild cognitive impairment due to Alzheimer’s disease in June, but weeks later two congressional committees opened investigations into the FDA’s approval process for the drug. Lawmakers claimed the FDA ignored concerns from experts regarding the clinical benefits of the drug, and raised concerns of their own over the drug’s then-$56,000 annual price tag. Three members of the FDA’s Peripheral and Central Nervous System Drugs Advisory Committee resigned following the approval of Aduhelm, and 18 dementia researchers wrote in a statement last year they did not think the drug had any meaningful benefits. The FDA has launched an internal review of its approval process for Aduhelm, and the Centers for Medicare and Medicaid Services restricted coverage of the drug last month to patients participating in clinical trials—greatly reducing the number of patients who might otherwise take it.
$28,200. That’s how much Biogen now charges for one year of Aduhelm, after an initial price tag of $56,000.
Stat reports at least 15 hospitals, including Cleveland Clinic, Johns Hopkins, the University of California Los Angeles and the University of Michigan, have decided not to offer Aduhelm to patients, citing a lack of evidence of the drug’s effectiveness.
Medicare Seeks To Limit Coverage For Controversial Alzheimer’s Drug Aduhelm (Forbes)
House committees step up investigation into FDA approval of controversial Alzheimer’s drug (The Washington Post)