Biogen's new Alzheimer's drug could cost Medicare billions after FDA approval

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Patients are desperate for hope. But there are serious concerns about Biogen's new $56,000 treatment.
Medicare, the federal health insurance program that covers Americans over 65, is facing an impossible dilemma: Should it cover a new and expensive medication for Alzheimer's disease, which afflicts 6 million Americans and for which there is no existing treatment, even though the drug might not actually work?

It is an enormous question. Alzheimer's patients and other families with members who endure mild cognitive impairment that may progress to Alzheimer's have been waiting decades for an effective treatment. For them, even a few more months of life with improved cognition, one more birthday party or a grandchild's graduation, is the priority.

But the evidence on whether Biogen's treatment, called aducanumab, is effective is, at best, mixed; the FDA approved it this week over the objections of its own advisory committee. And with a preliminary announced price of nearly $60,000 annually per patient, covering the treatment could cost upward of $100 billion a year, mostly to Medicare, which would almost double the program's drug spending. Patients themselves could be on the hook for thousands of dollars in out-of-pocket costs.

What Medicare does about aducanumab will have major ramifications not only for the millions of patients who could potentially be eligible for the drug, but for the future of US health care writ large.

The dilemma results from a feature of the American health care system: Unlike in other countries, the federal government has little room to negotiate what Medicare will pay for treatments.

Independent analysts think the drug is worth more like $8,000, but Medicare has no authority to charge a lower price. Instead, the federal program is likely in effect obligated to cover the new drug now that it has FDA approval. The tools it has to make a determination about whether or not to cover aducanumab and for whom are fraught with legal and ethical risk.

The government now finds itself trying to figure out how to satisfy patients who desperately…
Dylan Scott
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