By Kim Dixon and Lewis Krauskopf

CHICAGO/NEW YORK (Reuters) - U.S. health officials may have allowed multiple sclerosis drug Tysabri back on the market, but drugmaker Biogen Idec Inc. (BIIB.O: Quote, Profile, Research) must now convince health insurance companies to pay for it.

Under the plan approved by the U.S. Food and Drug Administration, doctors and pharmacies must register with the companies before prescribing Tysabri, withdrawn after being linked to three cases of a brain infection that can be fatal.

Patients must first receive a magnetic resonance imaging scan and the drug is only recommended for patients who failed other treatments first, the FDA said.

Once they meet all these requirements, Biogen and Irish- drugmaker Elan, which is co-marketing the drug, must get someone to pay for it. The intravenous treatment cost $23,500 a year before it was withdrawn from the market last year.

"It could take from two to 10 weeks before a patient is dosed based on the insurance verification process," Biogen senior vice president for immunology Bob Hamm told investors in a conference call on Tuesday. "It will take some time to implement a medical policy" for insurance, he added.

Elan will set the price for the drug, according to Biogen. Last month, Elan's chief executive said there was room to raise the price.

Health insurance companies, for their part, go through a methodical process before paying for new drugs. A panel of pharmacists and other experts convene to weigh the benefits versus risks and then decide.

Tysabri was pulled from the market after three patients taking the drug developed progressive multifocal leukoencephalopathy (PML), a rare brain infection, and two of them died. Continued...
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