The costly new Alzheimer’s disease treatment recently approved by the Food and Drug Administration could cause federal spending to swell by $57 billion in just one year, roughly the same amount that the government healthcare program Medicare spent on all outpatient hospital services in 2020.
The new therapy from Biogen, called Aduhelm, is the first Alzheimer’s disease treatment to be approved by the FDA in nearly two decades. Soon after the FDA approved the monthly physician-administered IV treatment on June 7, Biogen set the list price at $56,000 for a year’s supply.
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Government spending on Aduhelm alone would exceed $57 billion in a single year if just 1 million people enrolled in Medicare, the government healthcare program for seniors, were prescribed the treatment, according to a report from the Kaiser Family Foundation. Roughly 6.2 million people 65 and older have been diagnosed with Alzheimer’s disease, according to the Alzheimer’s Association. Coverage for the monthly therapy would fall under Medicare Part B, the insurance plan that covers medically necessary services, such as doctor visits and lab work.
“It’s a reasonable estimate in terms of one scenario,” said Robert Egge, vice president of public policy at the Alzheimer’s Association. “That depends in part on the coverage decisions made by [the Centers for Medicare and Medicaid Services].”
Patient advocacy groups such as the Alzheimer’s Association, Patients for Affordable Drugs, and the Campaign for Sustainable Rx Pricing criticized the company for setting the price so high, arguing that many Alzheimer’s patients will not be able to afford it. The Alzheimer’s Association, for instance, called the cost “unacceptable,” adding that the high price point “complicates and jeopardizes sustainable access to this treatment.”
Aduhelm patients will also require related medical services such as regular neurological imaging, including CT scans, to make sure the treatment is doing its job. Patients might also have to treat side effects of the treatment, which include brain swelling and bleeding. That would be an additional expense for those services. Medicare Part B will cover the cost for outpatient imaging services, such as an MRI at a diagnostic facility, but patients will be responsible for any cost-sharing responsibilities, such as copays for visits with other specialists. KFF estimated that a single year of treatment and other necessary expenses that come with it would cost patients about $11,500.
“By any way you look at this, it is an enormous drain on the treasury and the pocketbooks of the American people and patients and people who have Alzheimer’s,” said David Mitchell, president of the group Patients for Affordable Drugs, which advocates for direct price negotiations between Medicare and drug companies.
The premium for Medicare Part B coverage will increase universally but not by too much, according to Joe Antos, a healthcare policy expert at the American Enterprise Institute. The cost of covering the treatment will be shared by the roughly 56 million people covered by Medicare Part B, “so it’s not a gigantic number,” Antos said.
The FDA’s approval of Aduhelm was considered “accelerated,” meaning Biogen will have to produce results from a postmarket study to prove efficacy. The treatment is a monoclonal antibody that clears a “sticky” plaque in the brain made up of the protein beta-amyloid, which accumulates in the brains of Alzheimer’s patients and is believed to cause memory and cognitive problems. However, trial results did not provide proof of a clear benefit against the progression of the disease.
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Ten members of the agency’s 11-person panel of neurologists charged with parsing through clinical trial data recommended that the treatment not be approved. When the FDA went against their recommendation, three experts resigned from their positions on the agency’s panel.
“What do we get for our money? I think that’s the real question,” Antos said. “All we really know is that there was some reduction in some patients in amyloid plaques in their brains … but it might not actually improve the functioning of the patients, and we will only find that out over several years of clinical trials.”
