Biogen Exec Denies That New Alzheimer’s Medicine Will Overwhelm Medicare — But Experts Disagree
In early June, the FDA announced that it was fully approving a new drug developed by biotech company Biogen for the treatment of Alzheimer’s disease. The drug, Aduhelm (aducanumab), has.been one of the most controversial new drugs approved by the FDA in years. While Biogen and patient advocates tout it as the first new Alzheimer’s treatment in decades, doctors and scientists say that there is not enough proof that the drug is actually effective at slowing the progression of the disease. And that’s not the only problem— the drug also comes with a $56,000 price tag. Some critics say that the price of Adhulem could overwhelm the Medicare system, which is already stretched thin. But Biogen executives deny this claim, and said the drug will benefit the system instead.
There are about 61.2 million people in the U.S. who are beneficiaries of Medicare, over 2.5 million of whom have a diagnosis of Alzheimer’s disease. If each of these Medicare patients were treated with Adhuhelm, and Biogen billed the agency the full cost of the medicine, it would cost the program $140 billion dollars – over 15% of the program’s entire budget. Of course, this is an unlikely scenario, but that doesn’t mean the potential costs aren’t still high. A new report from the Kaiser Family Foundation approximates that Medicare could be on the hook for between $29 – $57 billion in a year for Aduhelm (for context, the report notes that $57 billion is more than Medicare spent covering all outpatient hospital services in 2019). Other experts estimate a lower cost – only around $6 billion which is still a burdensome expense to a program that is already on the brink of insolvency.
Chirfi Guindo, Head of Global Product Strategy and Commercialization at Biogen, denies that the drug will put a strain on the Medicare system. In fact, he says that if all goes according to plan, the drug would save the U.S. money. “The United States spends $600 billion a year on Alzheimer’s care as we speak without having any access to transformative therapy,” he says. (According to the Alzheimer’s Association, total U.S. spending on Alzheimer’s disease is $305 billion, with Medicare spending $155 billion per year.) “What the question that I would suggest be asked,” Guindo says, “is what would happen in the next few years, should a drug like aducanumab be implemented in the system and result in clinical benefits…so that these patients could stay independent for longer.” Guindo says that by slowing the progression of the disease, his company’s drug would prevent more burdensome spending. “This whole notion of cost burden is, is one that really ought to be looked at in a holistic fashion,” he says.
Additionally, Guindo says that there are “natural barriers” to receiving Aduhelm that will limit the number of patients who can get access to the drug. Biogen says that the company will only have the capacity to manufacture enough of the drug to treat 1 million patients a year — a fraction of the 6 million Americans who have Alzheimer’s disease. To get access to Aduhelm, patients must get a referral from their primary care doctor to a neurologist or memory specialist. They then need to get a PET scan to confirm they have beta-amyloid plaques present in the brain, be willing to get monthly infusions, and be carefully monitored for potentially dangerous side effects like brain inflammation. “It’s a pretty complex process that the patient has to go through,” Guindo says, “and we just do not envision that all of a sudden millions and millions of patients will be put onto this drug and make the whole system unsustainable.”
The fact that the company is betting on only a small number of Alzheimer’s patients getting access to the drug could be disheartening for patient advocacy groups, which were heavily in favor of the drug’s FDA approval. At press time, Biogen had not responded to Forbes’ request for additional comment.
Despite Guindo’s claims, many experts say that the pricing of Aduhelm poses a danger to Medicare. Everyone from lawyers to members of Congress wants to know how Biogen plans to justify the cost. “The company is of course entirely responsible for the price, and if they want to contain spending then a lower price would clearly help,” said Peter Bach, the Director of Memorial Sloan Kettering’s Center for Health Policy and Outcomes. “If the drug is not used it will be because doctors and hospitals respond to the available clinical data, which demonstrates serious toxicity and no clinical benefit, but we cannot historically rely on doctors and hospitals to respond in this manner, particularly for profitable treatments unfortunately.”
There is a path forward that would allow Medicare to cover the cost of treatment without spending billions on billions of dollars: The Centers For Medicare & Medicaid Services could use a National Coverage Determination to put firm limits on the types of patients that can use Aduhelm with Medicare coverage. If, for example, CMS only covered the medication for the same group of people who were in the clinical trial for the drug (patients who had beta-amyloid plaques visible on a scan but only mild disease), that would drastically reduce the number of patients who could get access to the drug, potentially by half. While that might upset patients and patient advocacy groups, it could potentially save Medicare.