Earlier this week, the Food and Drug Administration overruled—to much criticism—its own scientific advisory committee and approved the Alzheimer’s treatment Aduhelm. The agency made this decision despite thin evidence of the drug’s clinical efficacy and despite its serious side effects, including brain swelling and bleeding. As a result, a serious risk now exists that millions of people will be prescribed a drug that does more harm than good.
Less appreciated is how the drug’s approval could trigger hundreds of billions of dollars of new government spending, all without a vote in Congress or indeed any public debate over the drug’s value. Aduhelm’s manufacturer, Biogen, announced on Monday that it would price the drug at an average of $56,000 a year per patient, a figure that doesn’t include the additional imaging and scans needed to diagnose patients or to monitor them for serious side effects.
The federal government will bear the brunt of the new spending. The overwhelming majority of people with Alzheimer’s disease are eligible for Medicare, the federally run insurance program for elderly and disabled Americans. If even one-third of the estimated 6 million people with Alzheimer’s in the United States receives the new treatment, health-care spending could swell by $112 billion annually.
To put that figure in perspective, in 2020, Medicare spent about $90 billion on prescription drugs for 46 million Americans through the Part D program, which covers prescription medication that you pick up at your local pharmacy. We could wind up spending more than that for Aduhelm alone.
Most of the costs will be borne by taxpayers. But Medicare beneficiaries will take an additional hit. Because Aduhelm is an infusion drug that will be administered in doctors’ offices and clinics, not taken at home, it will be covered by Medicare Part B—not Part D. Under Part B, beneficiaries pay 20 percent of the costs of their care, which, for a single year of Aduhelm treatment, will be at least $11,200. Although most seniors have supplemental plans to cover these out-of-pocket expenses, prices for those plans are sure to spike, whether they’re on Aduhelm or not. That would be quite hard on seniors, many of whom live on fixed incomes.
States will also come under pressure. Some patients prescribed the drug will be under 65 and won’t be eligible for Medicare. But they may be eligible for Medicaid, which state and federal governments jointly fund. Plus, about 12 million people nationally are eligible for both Medicare and Medicaid (they’re called “dual eligibles”), meaning that the states are responsible for covering much of their out-of-pocket costs. As a result, states could face hundreds of millions of dollars in unanticipated Medicaid spending.
That’s an especially big problem because, unlike the federal government, states aren’t allowed to run a budget deficit. To pay for Aduhelm, they’ll have to either raise taxes or (more likely, given today’s political environment) cut spending on education, infrastructure, and health care. That dynamic played out after the 2013 FDA approval of Sovaldi, a cure for people with chronic hepatitis C. Despite Sovaldi’s stunning efficacy, its price tag and the prevalence of hepatitis C in the Medicaid population posed severe budgetary challenges for states, many of which rationed access to the drug. The similarly priced Aduhelm is approved for an even larger patient population, but unlike Sovaldi, it’s not a cure. States could be stuck paying for a patient’s Aduhelm year after year, rather than simply once.
Re: Biden Thread
Originally Posted by Zain
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