Biogen falls 8% after 2 major hospital systems say they won't administer controversial Alzheimer's drug

• Shares of Biogen fell as much as 8% after two major hospital systems indicated that they would not administer the controversial Alzheimer's drug, Aduhelm.
• According to a report from the New York Times, the Cleveland Clinic and Mt. Sinai indicated they would not administer the drug to patients.
• Aduhelm was approved by the FDA last month but lacked data demonstrating its efficacy in preventing or slowing Alzheimer's.
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Biogen fell as much as 8% on Thursday after a report from the New York Times indicated that two major hospital systems would not administer its controversial Alzheimer's drug, Aduhelm.

Aduhelm was approved by the FDA last month in a controversial decision for the treatment of Alzheimer's. Pressure from patients and their families desperate for an Alzheimer's drug outweighed the lack of data showing efficacy that the drug prevents or slows the progression of the deadly disease.

According to The Times, the Cleveland Clinic and Mt. Sinai hospital systems will not administer Aduhelm to patients.

The Cleveland Clinic said in a statement that after reviewing all available safety and efficacy data on the drug, "we have decided not to carry aducanumab at this time."

The Cleveland Clinic said individual physicians at the hospital network could prescribe Aduhelm to patients, but patients would have to go elsewhere to receive the drug, which is administered as a monthly IV fusion, the Times reported.

Meanwhile, director of Mt. Sinai Center for Cognitive Health Dr. Sam Gandy said it would not administer Aduhelm given that there have been calls for a federal investigation to look into the FDA's approval decision and the agency's relationship with Biogen.

"Aduhelm will not be considered for infusion into patients on any of its campuses until and unless" an investigation by the inspector general of the Department of Health and Human Services "affirms the integrity of the FDA/Biogen relationship and goes on to reaffirm" the FDA's basis for approving the drug," the Times reported.

In a response to the Times, Biogen said it stands behind the data utilized in the FDA's approval of Aduhelm and that "if any patient is denied access to care, we encourage them to contact us for help as we remain committed to supporting access to Aduhelm for all appropriate patients."

Biogen's decision to price Aduhelm at $56,000 annually has led to political pressure on the company, as some view the price as too high given that the scientific data doesn't demonstrate its effectiveness in treating Alzheimer's.

The next hurdle for Biogen will be to receive approval from health insurers to cover the costs of the drug. So far, UnitedHealth Group said on a recent earnings call that it has not yet decided whether or not to cover the drug.

Shares of Biogen are still up 32% year-to-date, but are down as much as 31% from its June 7 peak of $468.55.