A funny thing happened on the way to that $56,000-a-year Alzheimer’s drug: Payers are reluctant to pay, providers are reluctant to prescribe, and the price is coming down—at least for some patients. It is a tale that could push Congress to allow Medicare to negotiate drug prices.
Reuters reports that Biogen
BIIB
Building pressure
It is not clear how widespread the give-aways are, or how long they’ll last. These sorts of patient assistance programs are relatively common in the drug industry, especially for new drugs. They are rare, however, for injectable drugs or infusions such Aduhelm.
Biogen may be trying to grow a population of users to pressure Medicare to pay for the drug. It will be harder for the government to stop paying for people who already are getting it than just to limit payments for future patients.
The drug maker is struggling to build sales as well as public and clinical support. FDA approved Aduhelm in July, even though an expert panel urged it to delay approval until Biogen completed a new trial. Earlier trials were incomplete and inconclusive.
But in a carefully worded statement, FDA acknowledged that there was no clear evidence that the drug provides a clinical benefit to people living with Alzheimer’s. Rather, it said only that the drug would reduce the amount of a protein called amyloid beta in the brain. Research suggests that people with Alzheimer’s have high levels of this material in their brains, but it is not clear that it causes Alzheimer’s, alone or in combination with other factors.
Reluctant payers
Under pressure from medical experts, FDA also relabeled the drug to clarify that it is appropriate only for patients with early-stage Alzheimer’s. It is not appropriate for later-stage patients or those with other forms of dementia.
As a result of the controversy and the absence of clear benefit to patients, the Department of Veterans Affairs and several large health systems such as the Cleveland Clinic and Mount Sinai in New York are not including Aduhelm in their formularies.
According to one survey, 8 of 78 neurologists have prescribed the drug to 30 patients.
What will Medicare do?
Medicare has begun a process, known as a National Coverage Determination, to clarify whether it will pay and under what circumstances. That effort will take at least until next April. In the meantime, it is up to each of Medicare’s twelve regional offices to decide whether they will pay. Some appear to be, at least for now. About 85 percent of Alzheimer’s patients are on Medicare.
Because Aduhelm is a Medicare Part B drug, rather than a more common Part D medication, consumers still will have to pay 20 percent, or about $11,000, out of pocket each year. They also need to pay for a PET scan before they can take the drug and for other tests while they are using it. These costs are not reimbursed by Medicare.
Most large private insurance companies are withholding decisions on whether to pay until they know what Medicare does.
According to an independent analysis by the Institute for Clinical and Economic Review, Biogen’s $56,000 annual price is seven to 19 times its benchmark price of $3,000-$8,400.
The long-term cost
Some of what is happening now is politics: Biogen’s effort to pressure Medicare to pay. But some is economics: Without the cash cow of Medicare reimbursement, the price is, not surprisingly, coming down. If Medicare refuses to pay, expect the price to come down permanently, and for everyone.
And, while it surely is not the outcome Biogen would prefer, this episode is likely to become a poster child for Democratic efforts to allow Medicare to negotiate drug prices, rather than just pay whatever the drug makers demand. One firm’s short-term profit could end up costing the industry trillions of dollars.