The Cost of Alzheimer Disease: Aducanumab’s Price and the Implications for CMS, Patients
Aducanumab’s (Aduhelm; Biogen) $56,000 price point reflects the larger challenges of the United States’ insurance system and incites a cyclical series of events that have repercussions on cost of future therapies, state budgets, and legislative decisions.
James C. Robinson, PhD, MPH
Long before the FDA approved aducanumab (Aduhelm; Biogen) for the treatment of Alzheimer disease (AD) in June 2021—the first such approval in decades—the controversial therapy had been the subject of debate among members of the medical community. Now, 6 months since it was given the regulatory go-ahead via the accelerated approval pathway, its use in the clinic has yet to achieve what might be expected of a landmark approval for a disease without a cure.1
Aducanumab’s yearly cost is set at $56,000 annually, which was deemed far above what estimates anticipated. In July, a report from the Institute for Clinical and Economic Review (ICER) suggested that the agent would be cost-effective at a price between $2500 and $8300 per patient per year. Even in the instance of “optimistic” pricing, based on the suggested but unconfirmed clinical benefit, the cost-effective estimate sat between $11,100 and $23,100—still far below the actual cost.2
Some have suggested the list price for the amyloid-clearing agent may be driving this lack of uptake, though the complexities of the environment in which the therapy has been approved suggest that the story is more complicated. The ongoing conversation around the coverage of the cost by the Centers for Medicare & Medicaid Services (CMS) administrators—a proposed reimbursement decision is expected in January 2022, with a final decision expected in April—has only muddied the waters, as the majority of patients who are likely to receive the therapy in the United States are covered under Medicare. This patient population consists of as many as 5.8 million Americans according to CDC estimates, with the population’s size expected to triple by 2060.3,4 An estimate from July published in JAMA suggested if just 10% of those with AD were prescribed aducanumab, spending for Medicare Part B would nearly double—from $37 billion to $69 billion per year.5
Many are now calling attention to the downstream effects and drivers of this cost by pointing out the lessons that might be learned from this rollercoaster experience in the AD care landscape. In a perspective piece published in The New England Journal of Medicine, James C. Robinson, PhD, MPH, Leonard D. Schaeffer Professor of Health Economics, director of the Berkeley Center for Health Technology, UC Berkley, offered insight into these lessons, writing that the cost points to 3 major aspects of the current environment: the Medicare reimbursement rate formula, physician payment for office-infused drugs, and patient cost-sharing requirements.6
Robinson noted that the average sales price (ASP) formula that determines the costs for Medicare leads to an incentivization for pharmaceutical companies to levy high prices to insurers without rebates/discounts, “since these adjustments would translate directly into reductions in Medicare’s ASP. It doesn’t matter to manufacturers if private insurers impose onerous utilization management in response to a high price, thereby limiting the number of prescriptions, as long as the price remains high and most patients are covered by Medicare.”
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Additionally, Robinson pointed to the impact from the so-called buy-and-bill reimbursement mechanism that drives revenue for physician practices and clinics. “Medicare pays physicians a reimbursement price 4% to 6% over the acquisition price, which translates into a larger dollar sum for expensive than for cheap drugs,” he wrote, adding that independent practices and hospitals obtain markups averaging 10% and 100%, respectively, above acquisition prices, leading to a situation in which “price moderation by the manufacturer would reduce providers’ revenues and dampen, rather than boost, their enthusiasm for prescribing the drug.”
The third major area of impact is the potential incoming marketplace competition of therapies making their way through the pipeline. In recent months, rolling submissions were initiated for Biogen and Eisai’s second AD hopeful lecanemab as well as Eli Lilly’s investigational antibody donanemab,7,8 with the news that the FDA awarded Genentech/Roche’s gantenerumab with a breakthrough therapy designation occurring in the interim.9 “Therapeutic competition will not lead to price competition, however, unless physicians and patients perceive an advantage in using cheaper options,” Robinson wrote. Medicare Part B puts 20% of the drug price’s responsibility on the beneficiary, but as the remaining 80% difference is covered by Medicare, it “creates a countervailing incentive for manufacturers not to compete on price,” he noted.
Nicholas Bagley, JD
“The $56,000 price for aducanumab is a rational manufacturer response to an irrational insurance system. If the United States does not wish to face similarly high prices for each new pharmaceutical product, it must address the inflationary incentives inherent in Medicare’s reimbursement formula, the method of drug distribution for infused drugs, and the structure of consumer cost-sharing,” Robinson concluded.
But the impact of aducanumab’s cost and its ripple effect does not stop by only pointing out the challenges of a multifarious and convoluted insurance system. As Rachel E. Sachs, JD, MPH, professor of law, Institute for Public Health, Washington University in St Louis; and Nicholas Bagley, JD, professor of law, University of Michigan, note in another perspective in The New England Journal of Medicine,10 its cost implicates individual state fiscal health and existing laws requiring Medicare and Medicaid coverage, “no matter their prices and no matter how poorly they work.”
In the case of aducanumab, however, a restrictive decision may be reached by CMS, in large part possible given the oft-debated evidence provided by Biogen to the FDA to support the drug’s approval, which would lead to a scenario in which the onus falls on individual states responsible for payment.
“The fiscal implications for states are serious. Unlike the federal government, states can’t run budget deficits, which means they would have to raise taxes or reduce spending in other areas to pay for aducanumab,” Sachs and Bagley wrote, drawing parallels to a prior instance of such a restriction in the case of hepatitis C therapy sofosbuvir (Sovaldi; Gilead). Some states, such as Massachusetts and Tennessee, have requested waivers and adjustments from CMS to offset this possibility, for now, the responsibility remains at hand.
Sachs and Bagley note that the lack of an alternative for CMS in its decision-making process has left much to be desired from this situation. The agency’s determination process is centered around determining aducanumab’s status as “reasonable and necessary” for patients with AD, allowing CMS to lend states a proverbial hand by excluding some agents, such as cosmetic and fertility treatments, as subject to inappropriate use,11 though this roadway appears closed, as “CMS has previously suggested that using a drug for its medically accepted indication does not constitute inappropriate use,” Sachs and Bagley wrote, leaving the only other options in the hands of the federal government.10
Rachel E. Sachs, JD, MPH
“The cleanest solutions are likely to come from Congress, though the politics surrounding the first drug approved for treating Alzheimer’s disease in decades will be tricky to navigate,” the pair continued, suggesting that a law that automatically extends Medicare national coverage determination to Medicaid or allows states to decide coverage determinations could offer a solution.
“We believe that both the federal government and the states deserve better policy options in the face of a historic drug approval. Protecting state budgets shouldn’t require Medicare to cover an expensive drug with unproven clinical benefits, and Congress should take steps to fix this problem. Perhaps aducanumab’s high price will finally provide the impetus for revisiting Medicare’s and Medicaid’s existing commitments to covering all FDA-approved drugs,” Sachs and Bagley concluded.
The aducanumab saga has raged for almost 2 years, with the end perhaps still not in sight, and with time, its intricacies have grown to a level only surpassed by the pathologies and processes of the disease it treats. In the coming months and years, the clinical community will be faced with a continuously shifting landscape as more data and analyses are released, additional therapies are introduced, and coverage decisions are made.
One such analysis was recently presented the 14th Clinical Trials on Alzheimer’s Disease Conference (CTAD), November 9-12, by Oskar Hansson, MD, PhD, with data from the phase 3 EMERGE (NCT02484547) and ENGAGE (NCT02477800) clinical trials—including analyses of more than 7000 plasma samples from more than 1800 individuals—suggesting that aducanumab treatment results in a significant correlation between the reduction in plasma p-tau and lessened decline in cognition and function in those with Alzheimer disease.12,13
"These data confirm that in both studies the reduction in p-tau was correlated with clinical outcomes. Being correlated with clinical change is a first and important step towards a biomarker being considered as a surrogate. Although additional study is needed, these findings add to the growing evidence that biomarkers could be a reasonable indicator of clinical measures in Alzheimer disease," Ivana Rubino, PhD, Head of Medical, Global Alzheimer's, Biogen, told NeurologyLive® at the time.
