$11,500 Price Tag for New Drug Leaves Seniors Reeling

Since being approved by the FDA earlier this week, the latest development in the fight against Alzheimer’s has been said to come with a large price tag. Biogen’s new Alzheimer’s drug, Aduhelm, could cost Medicare billions of dollars a year along with a copay of $11,500, according to the Kaiser Family Foundation (KFF). Here is what you need to know.

  • Alzheimer’s disease is estimated to affect more than 6 million Americans who are 65 years and older. 
  • Aduhelm is the first Alzheimer’s medication in nearly 20 years. 
  • Biogen’s Aduhelm does not cure the life-sapping neurological condition, but the FDA determined that its ability to reduce clumps of plaque in the brain is likely to slow dementia. (Many health experts argue that the benefit has not been clearly shown.)
  • Biogen said it is charging $56,000 for an annual course of the new treatment, with copays estimated as steep as $11,500.

The price tag

Oregon Senator Ron Wyden, who is also chairman of the Senate Finance Committee, said Thursday the list price for Aduhelm was “unconscionable.” The biotech company said it is charging $56,000 for an annual course of the new treatment, higher than the $10,000 to $25,000 that Wall Street was expecting. 

Note: That is only the wholesale price, which means the out-of-pocket cost patients will actually pay will depend on their own health coverage.

An FDA adviser called the decision “probably the worst drug approval decision in recent U.S. history,” in a letter he submitted when resigning over the decision Thursday. According to a KFF study, if 500,000 Medicare recipients are prescribed Aduhelm, it would cost the program nearly $29 billion a year, far more than any other medication.

Biogen has allegedly committed to not raising the price of the new drug over the next four years. That being said, executives said they are “open-minded” and suggested they could rethink the price as the company assesses demand over the next few years.

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What will Medicare cover?

As an infusion drug that would be administered in a doctor’s office, Aduhelm is covered by Medicare’s outpatient care benefit. The Part B standard premium, paid by most enrollees, is currently $148.50 a month.

Unfortunately, in addition to higher taxpayer costs, the Kaiser analysis found that domino effects would include higher Part B premiums for Medicare’s outpatient coverage and increases in monthly premiums for millions with supplemental Medigap plans

In addition to high monthly premiums, there would also be out-of-pocket costs. For most Part B covered drugs and services, Medicare pays 80 percent of the cost and beneficiaries are responsible for the remaining 20 percent. This means that beneficiaries would face about $11,500 in coinsurance for one year of Aduhelm treatment, which represents nearly 40 percent of the $29,650 in median annual income per Medicare beneficiary in 2019.

As a reminder, Aduhelm is not a cure for Alzheimer’s disease, so patients could collect these annual out-of-pocket costs over multiple years and into debt. Aduhelm may represent hope for Alzheimer’s patients and their loved ones who have waited years for new treatments, but this new drug is followed with a large bill not only to Medicare and beneficiaries, but also to taxpayers.


Sources:

BerkeleyJr. (2021, June 10). Biogen’s new Alzheimer’s drug could cost Medicare billions of dollars a year, report finds. CNBC. https://www.cnbc.com/2021/06/10/biogens-alzheimers-drug-could-cost-medicare-billions-of-dollars-a-year-report-finds.html. 

Juliette Cubanski Follow @jcubanski on Twitter and Tricia Neuman Follow @tricia_neuman on Twitter Published: Jun 10, 2021. (2021, June 10). FDA’s Approval of Biogen’s New Alzheimer’s Drug Has Huge Cost Implications for Medicare and Beneficiaries. KFF. https://www.kff.org/medicare/issue-brief/fdas-approval-of-biogens-new-alzheimers-drug-has-huge-cost-implications-for-medicare-and-beneficiaries/. 

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