WASHINGTON (AP) – A new $ 56,000-a-year Alzheimer’s disease drug would dramatically increase Medicare premiums, and some patients prescribed the drug could face a co-payment of around $ 11,500 per year. year, according to a research report released Wednesday.
The drug, called Aduhelm, was approved by the Food and Drug Administration this week only. It is the first drug for Alzheimer’s disease in almost 20 years, although it does not cure the life-destroying neurological disease. Some experts wonder if Aduhelm provides any benefit to patients, but the FDA has determined that it can reduce harmful plaque buildup in the brain, potentially slowing dementia.
Wednesday’s analysis by the non-partisan Kaiser Family Foundation comes as Democrats in Congress try to build consensus around legislation that would allow Medicare to negotiate the prices of prescription drugs.
The chairman of the Senate Finance Committee, Democratic Senator Ron Wyden of Oregon, said the list price of the Alzheimer’s drug was “unreasonable.” Although President Joe Biden has called for the granting of Medicare bargaining power, the prospects for the bill are uncertain.
The Kaiser Report estimated that if just 500,000 Medicare beneficiaries received Aduhelm, it would cost the program nearly $ 29 billion per year, far more than any other drug.
“At that price, the cost of this single drug could exceed all others covered by Medicare, if it is widely used,” said Tricia Neuman, co-author of the report.
Medicare has not made a formal decision on Aduhelm’s coverage, but cost has traditionally not been a consideration. Drugmaker Biogen has said it is pricing Aduhelm responsibly.
Alzheimer’s disease affects an estimated 6 million Americans, the vast majority old enough to qualify for Medicare. “Aduhelm’s approval provides the latest high-profile example of the potential budgetary consequences of Medicare’s role as a price-taker in the pharmaceutical market,” Kaiser’s analysis concluded.
In addition to higher costs to taxpayers, the domino effects would include higher “Part B” premiums for outpatient Medicare coverage and monthly premium increases for millions of people with additional “Medigap” plans. As an infusion drug that would be administered in a doctor’s office, Aduhelm is covered by Medicare’s outpatient benefit. The standard Part B premium, paid by most registrants, is currently $ 148.50 per month.
Beyond the monthly premiums, there would also be impacts on reimbursable expenses. Many patients taking the drug, including those who have purchased Medicare Advantage plans from private insurers, could face thousands of dollars in user fees. The maximum could reach around $ 11,500, the researchers estimated.
This upper bound cost of patient budgets would translate to nearly 40% of the estimated median income of $ 29,650 for Medicare beneficiaries.
“Because Aduhelm is not a cure for Alzheimer’s disease, patients could incur these annual fees over several years,” the report notes.
Biogen, which developed the Alzheimer’s drug with Japanese company Eisai Co., said earlier this week that it expects gradual adoption, not a sharp “hockey stick” spike.
Biogen set the drug’s price after extensive research, said Chirfi Guindo, global product manager at Biogen. Biogen has made a commitment not to increase its prices for four years.
Guindo said the company has looked at the prices of drugs advanced to treat cancer and other complex conditions. “We rated Aduhelm at about a third of the level of cancer immunotherapies,” he said on a teleconference this week. “So we see it as a really responsible price and we see it as a sustainable price for the system.”
Medicare has a review process known as Determining National Coverage to assess new treatments that could have far-reaching implications for the program. Officials have yet to say how the program will play out with Aduhelm. Medicare may set conditions to cover the drug, depending on its clinical effectiveness.
The program covers more than 60 million people, including those 65 and over, as well as people with disabilities or severe kidney disease. Medicare spending is approaching $ 1 trillion per year.