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Cost and Risk
Why the CMS refusal to cover an Alzheimer's drug makes sense
Let me begin by saying that I this is not an academic issue for me. My father suffered from Alzheimer’s disease before he died of cancer and watching him lose touch with reality was incredibly difficult. I remember a conversation I had with him while he was still aware of his situation and, at that time, he knew that he had Alzheimer’s and that it would progress. He asked me what would happen and how. No son should ever have to describe the end of Alzheimer’s to his own father. No son should have to tell his father that at some point he wouldn’t know who I was or that I was his son. Remembering the look that came over him as I explained the end to him still brings tears to my eyes.
Because of my personal experience with it, I truly understand the devastation this disease causes. In that moment, I would have given anything to spare my father the inevitable conclusion to this disease. Simply, I understand the situation of many Americans who desire access to new treatments and the passion that they push for drugs access.
Recently the FDA approved a new treatment for Alzheimer’s disease. This treatment has the potential to slow the progress of the disease by clearing away amyloid plaques which gradually accumulate in the patient’s brain. If we can slow down the progression of Alzheimer’s disease, it could have an incredible impact on quality of life for people who are early stages of the disease progression.
The drug I mentioned above is called Aduhelm and it costs about $30,000 a year. Granted, that is after Biogen, the manufacturer, cut the price in half. Recently, the Centers for Medicare and Medicaid Services (CMS) announced that Aduhelm would not be covered by routine Medicare coverage. Instead, it will continue to be covered by those who participated in the clinical trials.
I want to take a second to look at the economics of Medicare covering Aduhelm. There are an estimated six million Americans over the age of sixty-five suffering from Alzheimer’s disease. If only half of the people with Medicare that suffer from Alzheimer’s disease were treated with Aduhelm, it would cost about $90,000,000,000 (ninety billion) a year. This is only for Medicare and only for those over the age of sixty-five.
Here is some more perspective: Late last year, CMS released its 2022 Medicare premiums for Part A and Part B. Aduhelm would fall under Medicare Part B coverage. The Part B premium was increase by 14.5% or $21.60 per month. This was the largest single year increase in the history of the program. What caused the raise? CMS said it was the uncertainty around the use of Aduhelm.
This is an unusual situation for the CMS. Even though the FDA has approved the use of Aduhelm as an Alzheimer’s treatment, the CMS will not cover it under Medicare. This has created a great deal of anger from people with Alzheimer’s and their loved ones. It has also created concerns from some congressional Republicans who have questioned the role of the CMS in these kinds of coverage decisions. They believe that it is not the CMS’s job to determine what FDA drugs can and cannot be covered under Medicare. Some have even suggested that they will file a lawsuit against the CMS because they believe the CMS is performing some kind of discrimination.
Physicians have also been put into an interesting situation as well. Physicians who treat Alzheimer’s patients with Aduhelm would make about $1800 a year for each patient they treat. There are people who believe that physicians are in the pocket of big pharma and if they were right, physicians would be screaming and cheering the approval of this new drug. But are they?
Large delivery systems such as the Cleveland Clinic, Johns Hopkins, and Mass General have all declined to offer Aduhelm to their patients. According to the results from the clinical trials and the doctors who helped perform those trials, Aduhelm is largely ineffective and carries a high risk of severe health to the patient.
This tells us two things. First, doctors are largely not in the pocket of big pharma (for this or any other drug or vaccine). Second, it shows us that we need to look at healthcare with a more macro approach. Now, I am not saying that we forget about the individual or write off any person or group with a terrible disease like Alzheimer’s, but like most things in life we have hard decisions to make and we cannot do everything for everyone.
I think Aduhelm is a good illustration of something very difficult that we must face in our country: the introduction of economics into healthcare. If healthcare has proved anything over the last few decades, it is that trying to provide everyone everything will break the bank. That’s why healthcare costs so much in this country and why millions of people are uninsured or underinsured. We must start looking at healthcare through the lens of economics if we are going to solve its problems.