New Alzheimer’s drug could blow up health care spending

Biogen’s new Alzheimer’s treatment could be the nightmare scenario for expert drug spending: an extremely expensive product that millions of desperate patients could qualify for – and it may not even work.

Why it matters: Alzheimer’s is a devastating widespread disease with no cure. But the FDA’s decision this week paved the way for a Free for All, with taxpayers taking most of the huge bill for a drug that has not been shown to be effective.

Driving the news: The FDA has approved Aduhelm for all Alzheimer’s patients, not the narrower subgroup against which it was tested.

  • It is estimated that about 6 million Americans currently have the disease, most of which are covered by Medicare.

According to the numbers: About 500,000 Americans are diagnosed with Alzheimer’s each year, and the company announced that the drug costs $ 56,000 annually.

  • Patients would receive monthly infusions of the drug, which they would likely need long-term. An Alzheimer’s patient lives an average of three to eleven years after his diagnosis, per the Mayo Clinic.
  • If half of newly eligible Americans started treatment with Aduhelm in a year, the cost would be $ 14 billion – roughly what Medicare Part B spent in 2019 on the next 8 products combined, according to a Bernstein analysis. The total spend for Part B in 2019 was $ 37 billion.
  • But that’s a conservative estimate of Aduhelm’s annual spending, as it only covers half of the newly diagnosed Alzheimer’s patients in a year.

Yes but: It will likely take a while for the health system to build enough capacity to handle the influx of eligible patients.

  • And some private insurers can limit eligibility. Steve Miller, Cigna’s chief clinical officer, said yesterday that he expects Cigna and most other insurers to pay the drug only for patients who meet certain criteria. according to NYT.

Between the lines: The numbers alone could give new ammunition to proponents who argue that drug prices are too high and should be capped.

  • “It is unreasonable to charge seniors and taxpayers $ 56,000 a year for a drug that has not yet been shown to be effective. Medicare needs to be able to negotiate a fair price for prescription drugs. ” tweeted The Chairman of the Senate Finance Committee, Ron Wyden.
  • But politicians may find it difficult to accept the story that the treatment is anything but a long-sought hope for Alzheimer’s patients.

What you say: “There has always been a concern that an extremely expensive drug targeting a large population will be a turning point in how we manage healthcare spending.” said Walid Gellad, Professor of Health Policy at the University of Pittsburgh. “And that’s that drug.”

Go deeper: Aduhelm’s prize for putting pressure on Medicare and patients

Comments are closed.