Costly New Alzheimer’s Drug Could Force Medicare to Restrict Access

Medicare normally pays unconditionally for approved medicines. To limit the financial hit from Aduhelm, however, Medicare could restrict access, former U.S. health officials and health-policy experts said.

“Medicare can’t afford to treat this as business as usual,” said Andy Slavitt, a former Medicare acting administrator and Biden administration senior adviser.

The Centers for Medicare and Medicaid Services, the agency overseeing Medicare, is reviewing Aduhelm’s approval and will have more information soon about its coverage, a spokesman said.

“Whether or not that drug will be covered by Medicare and Medicaid is an outstanding question, something HHS will have to deal with,” Department of Health and Human Services Secretary Xavier Becerra said during an interview live streamed on YouTube on Thursday.

“We’re going to be making some pretty heady decisions about how it’s treated, if it will be reimbursed, how much, and so forth,” he added.

Meanwhile, Biogen said it wants to limit who gets Aduhelm to Alzheimer’s patients in the early stage of the disease with mild symptoms.

The federal government and the company may need to move quickly. “I’m not quite certain how we’re going to accommodate all the patients who want it,” said Richard Isaacson, director of the Alzheimer’s Prevention Clinic at Weill Cornell Medicine and New York-Presbyterian hospital.

The weeks since Aduhelm’s approval have been the busiest of his professional career, Dr. Isaacson said. As many as 200 patients have called or emailed the clinic to ask about taking the drug, he said, in addition to other doctors asking for advice on what to tell their patients.

Aduhelm was the first Alzheimer’s drug to be approved in nearly two decades when the Food and Drug Administration cleared it earlier this month.

The FDA acted over the objections of some of its statisticians and outside medical advisers, who said further studies were needed to prove the drug worked.

After the approval, some doctors and economists said it wasn’t worth spending so much on a drug that hasn’t been proven to work, especially one with the risk of brain bleeds. Three of the FDA’s medical advisers resigned from their posts.

Aside from the medicine itself, there is the cost of infusing the drug, brain-imaging tests and doctor visits, said Scott A. Small, director of Columbia University’s Alzheimer’s Disease Research Center. The total cost will approximate $100,000 annually per patient, he said.

Paying for the treatment will largely fall on Medicare, which provides health insurance to people 65 years and older and covers most of the six million Americans with Alzheimer’s.

Medicare, through its Part B benefit, typically pays for all infused drugs like Aduhelm administered by doctors who use it as prescribed by the terms of FDA’s approval.

In clearing Aduhelm, the FDA approved the drug for all Alzheimer’s patients, rather than tailoring its use for the early-stage patients studied in Biogen’s clinical trials. Biogen estimates one million to two million Alzheimer’s patients match the people in its studies.

If only one million patients get Aduhelm, Medicare would face about $57 billion annually in new spending, surpassing the $37 billion total spending on part B drugs in 2019, according to Kaiser Family Foundation. Medicare spent $136 billion on total outpatient drug spending in 2019, including pharmacy prescriptions.

Analysts polled by FactSet expect $103 million in Aduhelm sales this year, $946.3 million in 2022 and $5.4 billion in 2025.

Biogen said it expects Alzheimer’s specialists to be the primary prescribers of the medicine, and there aren’t enough in the U.S. to manage the millions of patients the company thinks might benefit from the drug. As a result, patient uptake will occur gradually over years, the company said.

The company told investors this month that 2021 sales will be modest before increasing into billions of dollars in U.S. sales.

“We want to make sure that the patients who we are focusing on are the ones similar to the patients who were included in our clinical development program,” Chirfi Guindo, Biogen’s head of global product strategy and commercialization, said in an interview.

The Centers for Medicare and Medicaid Services, which oversees Medicare, has a number of options for limiting a drug’s use, though it doesn’t often use them.

“Medicare has the ability to not cover this drug,” said Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center who chairs an external committee advising Medicare on payment decisions.

Among the most extreme options is that CMS could decide not to cover Aduhelm if it determines the drug falls short of being reasonable and necessary treatment, said Dr. Bach, who supports taking action.

CMS has rarely made such a move for a drug before, though it has for other medical products.

Denial of coverage would likely cause an uproar from patients.

A more likely option is that CMS standardizes the criteria through what it calls a national coverage determination, for which it will pay for Aduhelm across the program’s nearly 59 million enrollees, said Anand Shah, a former senior official with Medicare and the FDA who is now a senior adviser to Morgan Stanley.

Aduhelm’s cost and the “absence of consensus among clinicians may tilt the agency towards limiting access only to certain patients,” said Dr. Shah.

Private health insurers that administer the Part B benefit also could place restrictions on Aduhelm’s use, which could mean who gets access would vary by region or insurer.

Medicare may insist that patients getting Aduhelm become part of a CMS-ordered study that would seek to evaluate which patients it benefits or harms in the real world, and what the electronic and other evidence is, former agency officials said.

The study could collect lab data, records of hospitalizations and emergency visits and perhaps even survey evaluations from caregivers, said Sean Tunis, a former Medicare chief medical officer who is now a senior fellow with the Tufts School of Medicine.

Write to Joseph Walker at [email protected] and Thomas M. Burton at [email protected]