By Deena Beasley and Leroy Leo

(Reuters) -The U.S. government Medicare program on Tuesday said it plans to cover Alzheimer’s treatments including Biogen Inc’s Aduhelm but will require patients to be enrolled in a clinical trial, limiting access to the treatment more than many expected.

Biogen shares were down 7.3% at $224 in extended trading on Tuesday. Shares of Biogen’s Japanese partner Eisai Co Ltd slid 2.6% in Tokyo.

The decision from the U.S. Centers for Medicare and Medicaid Services (CMS), the health agency that runs Medicare, could change as it seeks comment from companies and patients. A final decision is due on April 11.

The final CMS coverage terms are expected to apply to all drugs in the class, including experimental medications in development by Eli Lilly & Co, Roche Holding AG and Eisai.

Patient advocacy group UsAgainstAlzheimer’s chairman George Vradenburg said he was angry Medicare placed conditions on the use of the drugs that were more limiting than the regulator, the Food and Drug Administration, put on Aduhelm, and that the Medicare decision applied to any amyloid drug.

The government’s health service was “at war with itself,” he said.

“The FDA has approved this drug and now Medicare has disapproved the drug,” Vradenburg said.

The FDA approved the drug in June last year despite its 11-member committee of outside experts voting nearly unanimously in November 2020 that the drug should not be approved, citing inconclusive evidence the drug was effective.

Many experts have questioned the FDA’s rationale for Aduhelm’s approval without more definitive proof of benefit, and doctors have held back on prescribing it.

“The wholesale rejection of this product by payers and health systems around the country is notable but not shocking, given how little evidence the manufacturer produced at the time of its FDA approval,” said Dr. Caleb Alexander, a professor with the Johns Hopkins Center for Drug Safety and Effectiveness, in Baltimore. Alexander was a member of the FDA advisory panel that voted not to approve the drug.

Demand for an Alzheimer’s treatment, he said, “should fuel our investments in drug development, not a lowering of standards that Americans rely upon to know whether their drugs are safe and effective.”

UNUSUAL RESTRICTIONS

The unusual move to require clinical trials for recipients of the already approved drug comes after a six-month process in which CMS had been working on a national coverage policy for the drug.

The decision to require the trial “will exclude almost all patients who may benefit,” Biogen said in a statement.

The requirements “can take months to years to initiate,” it said, and promised to urge the agency to align its coverage policy with the populations that have been studied in previous clinical trials.

“We believe Alzheimer’s patients should have access consistent with other therapies with FDA accelerated approval,” Biogen said.

Sales so far have been weak and Biogen last month cut the medication’s list price by about half to $28,200 per year.

Cowen analyst Eric Assaraf said in a research note the decision to restrict coverage to clinical trial participants was more restrictive than he had expected, noting the agency could have simply required Biogen to maintain a registry of patients that documented responses to the drug. He said CMS may change its stance in the final decision.

Aduhelm’s high price also has raised concerns over the toll it might take on the Medicare program, the U.S. government health plan for people age 65 and over. Because Alzheimer’s is an age-related disease, around 85% of people who might use the medicine are in the government plan.

With the proposed decision, the cost will shift to patients, Vradenburg said.

“Unless you are a very wealthy person, you are not going to get access to the drug,” he added.

Aduhelm, given as a monthly infusion, is a monoclonal antibody designed to remove a type of brain plaque associated with Alzheimer’s Disease. Patients need to be monitored for potential side effects including brain swelling.

(Reporting By Deena Beasley, in Los Angeles, Julie Steenhuysen in Chicago and Leroy Leo in Bengaluru; Editing by Caroline Humer, Bill Berkrot, Devika Syamnath, Peter Henderson and Lincoln Feast.)

---