In the “not so surprising” department, Axios reports that the FDA has just approved a new drug to treat Alzheimer’s disease that has questionable benefits and costs a small fortune. Unless Congress reins in drug prices asap, drug costs are likely to drive up Medicare spending to new heights in the coming years. Aduhelm, the Alzheimer’s drug, is projected to cost as much each year as the costliest eight Medicare drugs combined.
Experts say that Aduhelm is far from sure to help any of the 6,000,000 people with Alzheimer’s disease. But, that won’t stop Biogen, its manufacturer, from promoting it wildly and broadly. It will do what it can to get as many doctors as it can to prescribe it. And, Medicare will be stuck paying a huge bill, even if the drug does not work.
Still, the FDA approved the drug against the advice of its scientific advisory committee, reports The Atlantic. There is little clinical evidence that Aduhelm benefits people with Alzheimer’s. And, it has some serious side effects, including brain swelling and bleeding, which could undermine any of its benefits.
Because the US does not regulate drug prices and because doctors can prescribe pretty much whatever drugs they please, drug manufacturers can drive up drug spending on drugs that offer very little, if any, value.
Biogen says it will charge $56,000 a year for monthly infusions of Aduhelm. And, people will typically take the drug for three to 11 years, their usual lifespan after an Alzheimer’s diagnosis.
Incredibly, the FDA approval of Aduhelm covers everyone with Alzheimer’s, even though the drug was only tested on a small subpopulation of Alzheimer’s patients. That would mean that it alone could cost Medicare around $112 billion a year if one-third of all people with an Alzheimer’s diagnosis are prescribed the drug. In 2020, Medicare spent $90 billion on all Part D drugs combined.
People with Medicare and taxpayers would bear way more of the cost than you might think. The drug is administered by a doctor and covered under Part B. So, people will have 20 percent coinsurance. If they have supplemental coverage that picks up that cost, the premium for that coverage is likely to rise significantly.
Senator Ron Wyden of Oregon, who heads the Senate Finance Committee, believes that Medicare should have the ability to negotiate a fair price for this drug, which it currently cannot do. He is leading the Senate Democrats on legislation that would give Medicare that power. Let’s see whether he can succeed.
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