Opinion: CMS needs to do FDA’s job and limit the use of Biogen’s pricey new Alzheimer’s drug
Now that the FDA has approved Biogen’s expensive new Alzheimer’s drug with little clinical benefit potential, but plenty of potential to speed the bankruptcy of the government’s health care program for seniors, it’ll be up to the Centers for Medicare and Medicaid Services to limit payment for it and drive the conversation on access.
While such access decisions are normally reserved for the FDA, the agency abdicated its responsibility because of the wide label and because it’s allowing Biogen to take almost a decade to figure out if aducanumab actually works.
But what CMS does now will have a massive impact on the financial health and well-being of its Medicare program, especially as Aduhelm may speed Medicare’s path to insolvency, currently set for 2026.
The financial implications of Aduhelm range from daunting to downright disturbing.
As Bernstein biotech Ronny Gal pointed out, “The total cost of Medicare part B drugs was $37B in 2019, growing at 13%. This is the budget segment President Trump called ‘out of control’. If 1M patients use Aduhelm at the current price point, total Medicare part B spending would double.”
While Biogen has said they will have the manufacturing capacity to treat 1 million Alzheimer’s patients, Gal noted that the financial implications of a more realistic scenario of just half that population “is equally mind-boggling.”
If 50% of newly diagnosed patients start Aduhelm at the current price, then the total cost to Medicare will be equal to the top five drugs in Medicare Part B combined (Merck’s Keytruda, Regeneron’s Eylea, BMS’ Opdivo, Roche’s Rituxan and Amgen’s Prolia – at $10.7B based on the Medicare dashboard), according to Gal.
“We can easily see a situation where the combination of the unrestricted label and the high price could lead in-patient facilities treating severe AD patients to [get] as many of their residents on treatment as possible,” he wrote in an investor note earlier this month.
Rep. Peter Welch (D-VT) sent a letter to Biogen’s CEO Michel Vounatsos on Tuesday, noting, “In 2019, the total amount of spending for all Part B drugs was only $37 billion, so Biogen’s price for one drug and one treatment would cost nearly $20 billion more than the entire existing Medicare Part B drug program for all beneficiaries.”
The majority of Americans suffering from Alzheimer’s— more than 6 million people—are Medicare beneficiaries, Welch added, noting, “Biogen has abused the pricing power that it holds.”
So what will CMS need to do?
The centers may be tasked with instituting what’s known as a Medicare National Coverage Determination on Aduhelm, which is usually reserved for Medicare services and not new drugs. But such a determination could protect Medicare beneficiaries from FDA’s wide label, and restrict the use of the drug to only the subgroups of seniors who might benefit and who were studied in Biogen’s failed trials.
“If CMS were to use the NCD process to restrict coverage for Aduhelm beyond the FDA’s broad label for the drug, it would set a very important precedent by delinking the FDA’s decision to approve a drug from CMS’s decision to provide reimbursement for it,” Rachel Sachs, law professor at Washington University in St. Louis, wrote recently in Health Affairs.
Biden’s newly confirmed CMS administrator Chiquita Brooks-LaSure said she’s looking into all the evidence in deciding whether to make a national coverage determination.
Others are suggesting that CMS conduct its own research on paying for Aduhelm.
Peter Bach, director of the Drug Pricing Lab at Memorial Sloan Kettering Cancer Center, and Craig Garthwaite, director of the Program on Healthcare at the Kellogg School of Management at Northwestern University, called on Medicare’s research center, the Center for Medicare and Medicaid Innovation, to evaluate whether CMS should pay for the drug and whether those payments are cost-effective.
To evaluate such payments while Biogen’s 9-year confirmatory trial is ongoing, Bach and Garthwaite called on CMS to select some counties where it would reimburse Aduhelm’s current price, and others where it would reimburse $0, and see what the differences are.
“Medicare must study aducanumab reimbursement now, and prepare to do the same whenever the FDA approves other costly, important drugs that lack evidence of effectiveness,” Bach and Garthwaite wrote. “Drug companies should know that if their medicines reach the market before the evidence is in, payment will not be automatic.”