Biogen’s recently FDA-approved drug Aduhelm costs an upward of $56,000 per year, and this may have a domino effect of impacts: “If Aduhlem is covered and widely used, this could have a significant impact on Medicare spending, Medicare premiums and high costs for people who take the drug,” one expert says.
On June 7, the FDA granted accelerated approval to a landmark anti-amyloid Alzheimer’s treatment. For some, this was cause for celebration; for others, cause for skepticism and upset. Controversy is roiling around the FDA’s decision on Aduhelm (aducanumab) for use, with some experts questioning its efficacy, and others expressing surprise at its broad labeling. But one of the biggest questions about the drug for its target audience is: How will people afford it?
The first drug of its kind to be FDA-approved, Aduhelm’s estimated cost per patient is upwards of $56,000 per year. Insurers will decide whether the drug should be covered, along with its related requirements, like MRI scans prior to beginning treatment and before the 7th and 12th infusions.
“I think the hard thing is that people have longed for a drug that would treat or cure Alzheimer’s and have a lot of hope that this might be the drug, but this could be a high price to pay for a drug that may or may not have much of an effect,” Tricia Neuman, senior vice president of the Henry J. Kaiser Family Foundation and executive director of its program on Medicare policy, told Being Patient.
According to Biogen, the wholesale acquisition cost (WAC) is based upon an infusion that patients will receive once every four weeks. Cost is estimated according to a person’s weight. If the drug recipient weighs what Biogen pegged as average adult weight, 163 pounds, each infusion will cost an average of $4,312.
For 12 infusions per year, that makes the cost some $56,000 annually. Experts say affording the drug could be especially complicated for people without access to quality healthcare and to the very large population of people with Alzheimer’s on Medicare. Further, it will be a burden on the Medicare system at large.
Of the 6 million Americans living with Alzheimer’s, approximately 96 percent of them are over the age of 65 and are eligible to receive Medicare.
Since Aduhelm is an intravenous-infused medication that is administered by physicians, it will be covered under Medicare Part B, and Biogen expects 80 percent of Aduhelm patients to use this plan, which could potentially double the $37 billion per year that Medicare spends on all Part B covered drugs combined.
However, coverage remains up in the air as the Centers for Medicare & Medicaid Services (CMS) may undertake a National Coverage Determination (NCD) process to decide whether the drug will be limited in its use. (NCDs are used when the drug in question for coverage is overly pricey, or the opinions of the scientific community remain split and skeptical regarding the impact the drug may have on Medicare beneficiaries, both of which are the case with Aduhelm.)
“There’s still a question about what CMS will do in terms of what decisions they’ll make about coverage,” Neuman said. “If Aduhlem is covered and widely used, this could have a significant impact on Medicare spending, Medicare premiums and high costs for people who take the drug.”
When drugs are administered under Medicare Part B, they typically have a 20 percent coinsurance, but it depends on which type of plan someone may have, Neuman explained. Many people in Medicare have supplemental insurance, like the Medigap Plan, and they may not pay the 20 percent coinsurance, but those without the supplemental plan would incur those costs — almost 90 percent of Medicare Advantage enrollees do not have the supplemental plan.
Overall, experts say, the increase in Medicare spending associated with Aduhelm could result in higher premiums that are paid for by all beneficiaries, including those who do not take the drug. The bottom line: The premiums for Part B are based on the total Medicare Part B spending, so if this drug causes an increase in the overall spending as it is expected to, premiums may rise for all beneficiaries.
Of course, paying for the actual drug is one expense, but for those who are prescribed Aduhelm, there will be other costs associated, too.
PET scans can detect harmful beta-amyloid plaque build-up in the brain—the protein that Aduhelm is designed to reduce. Typically, these are not covered by Medicare. Each scan could cost thousands of dollars out of pocket.
“Ideally, we want to use [Aduhelm] only on patients that we know have a reasonable chance of benefiting from that therapy,” Eric Rohren, chair of radiology at Baylor College of Medicine, told Politico. “And so that’s where that role of PET scanning comes in: really identifying the patients with amyloid deposition who we predict will respond to the therapy.”
Treatment by Specialists
The cost of neurologists, although covered by Medicare if they are in-network, again remains inconsistent depending on what neurologist a beneficiary would see. But, with the Medicare Advantage plan, beneficiaries would have to receive a referral from their physician before they are able to see a neurologist, which adds another step to possible treatment with Aduhelm.
An out-of-pocket limit, Neuman explains, could be as high as $7,550 for in-network care and $11,300 for combined in-network and out-of-network care in 2021.
Some Medicare Advantage plans charge a higher coinsurance for those who go out of network, and could be responsible for 45 to 50 percent as opposed to Medicare’s 20 percent.
The 20 percent, on the other hand, based on the $56,000 cost of Aduhelm per year, would lead beneficiaries to an $11,500 out-of-pocket cost for one year of coinsurance while using the drug.
At this point, it is unclear how long patients will need to stay on the drug, as there is not yet data to establish whether beta-amyloid build-up will resume when a patient stops taking the drug.
“Because it is not yet clear whether Aduhelm helps patients, its price may not exacerbate health disparities in a manner that exists when certain populations can’t afford a highly effective treatment,” David Whitrap, vice president of communications and outreach for the Institute for Clinical and Economic review told Being Patient.
“However, Aduhelm’s significant budget impact will likely lead to increased insurance premiums that could price certain individuals — some with Alzheimer’s disease, some without — out of the insurance market altogether,” Whitrap said. “And this effect will disproportionately affect those individuals who require the most care and those who have more modest incomes.”