Aducanumab: The Drug That Breaks Medicare?

Yves here. I’m a few days late to this critical issue about the controversial and at best barely effective Alzheimer’s drug, aducanumab: that the ludicrously high price of $56,000 a year (why, exactly?) in combination with not crazy assumptions about uptake could be enough to break Medicare.

However, as I recall, original Medicare D plans typically cover only specified big ticket drugs; if you need one, you have to be sure your plan actually includes it. So since a lot of highly reputable hospital systems like Cleveland Clinic are refusing to prescribe aducanumab, it may well be that few if any Medicare D plans will include it either.

I’m not as clear on drug coverage under Medicare Advantage plans, but since they generally are skimpier, I would imagine that many if not most would similarly try to slip the leash. But commentary from knowledgeable readers would be very much appreciated.

By APeticola. Originally published at Health Care Renewal

In my previous posts, I haven’t talked too much about the price set for aducanumab. Since I think it should not have been approved on current evidence regardless of price, the approval has been my focus. But of course the price is an issue, especially given that there is a HUGE pool of potential patients and that most are probably Medicare age, meaning that this drug can have huge impacts on Medicare costs.

Before and after approval, there was speculation that this “potentially zillion-dollar moneymaker” (as Sharon Begley called itin October 2019) might be the most lucrative drug ever. Last November it was noted that if it brought in even a fraction of potential patients, it could still realistically be a $60 billion/year drug, changing Biogen’s revenue picture dramatically.

Taking a high-side estimate of $110 billion/year, Nicholas Bagley and Rachel Sachs speculated in The Atlantic that Aduhelm could be the drug that breaks Medicare, given that that cost exceeds total current Part D medication expenses of $90 billion dollars.

Even at a much lower total, Aduhelm’s costs would still balloon Medicare costs and would exceed the total NASA budget of $23 billion. Regardless of the exact total, the hit to Medicare would be big.

The cost to Medicare…could be substantial…. In 2017, nearly 2 million Medicare beneficiaries used one or more of the currently-available Alzheimer’s treatments covered under Part D, based on an analysis by the Kaiser Family Foundation. If one-quarter of those beneficiaries are prescribed Aduhelm, or 500,000 beneficiaries, total spending for Aduhelm in one year would be nearly $29 billion. This assumes Medicare will pay 103% of the list price until an average sales price is established. In any event, the Kaiser estimate suggests the total cost would far exceed spending on any other drug covered under Medicare Part B or Part D, based on 2019 spending data. “To put this $29 billion amount in context, total Medicare spending for all Part B drugs was $37 billion in 2019,” Kaiser wrote.

We get to these high numbers because the company set the cost at $56,000/year. $56,000 is a very high price for a drug no one thinks has more than a moderate and subtle clinical benefit. I was struck by this reflection:

“I cannot think of a justification for that price for this drug given the evidence thus far except that Medicare will pay it,” said Walid Gellad, an associate professor of medicine who heads the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh. “If $56,000 is a reasonable price for this drug, then what [would be] a reasonable price for a drug that has a large impact on changing the course of Alzheimer’s?”

That’s an excellent question. Another meaningful question is whether anyone will put in the effort to develop really good drugs for Alzheimer’s, if you can make this kind of money from a drug that is at best marginally beneficial and possibly not beneficial at all.

Because, for all this money, how meaningful are the benefits? In short:

“Absolutely tiny,” said UCL’s Howard. Aducanumab “didn’t stop dementia or reverse it, and even if we take the data at face value, the benefits are practically undetectable. As a clinician, it would be nearly impossible to tell if it works in one of your patients.”

Nonetheless, the Biogen CEO said he wasn’t worried about blowback on the price, comparing the price to that charged for other monoclonal antibody treatments like Humira and Keytruda.

Even some who are enthusiasts, like the Alzheimer’s Association, have questioned the high price of the drug, although there is some question about whether some of that is performative. This doubt partly arises because

months ago, the association also gave Biogen some cover for setting a higher price for its drug. It repeatedly sparred, for example, with the drug pricing watchdog ICER after the group suggested Aduhelm was only worth between $2,500 and $8,300 per year. (Meyer, the group’s spokesman, pushed back against the idea that its criticism of ICER had made it easier for Biogen set a higher price, calling the idea “patently false.”)

One thing that has not been much noted is that the price for many individuals will be HIGHER than $56,000/year, because the drug is dosed by weight, and $56,000 is the price per maintenance dose year for an “average weight” of 74 kg (about 163 pounds), so many will have higher costs (and higher co-pays).

Although it won’t likely change the total financial impact, Biogen’s share of the market may be reduced quickly, because after aducanumab’s accelerated approval, other companies, including Eli Lilly and perhaps Roche, are hoping to speed up approval of other such drugs. Biogen too with its partner Eisai has another amyloid-clearing drug in the works.

There’s more to say about spending so much money for so little benefit and I may or may not get around to another post on that topic. But meanwhile, I have been a bit gratified – and Biogen has been very put out – to see that there has been major pushback from multiple players on the accelerated drug approval and on the cost. Insurers and major hospital systems alike are reluctant to get the ball rolling on this. It’s probably just a slowdown, but Biogen is whining a lot. In an open letter, Alfred Sandrock, their Research and Development head, wrote:

Unfortunately, ADUHELM’s approval has been the subject of extensive misinformation and misunderstanding. It is normal for scientists and clinicians to discuss data from experiments and clinical trials, to debate, and to disagree, on the interpretation of data. That is how science advances and we welcome these discussions. Recently, however, there has been a turn outside the boundaries of legitimate scientific deliberation.… ADUHELM is the first Alzheimer’s treatment approved since 2003. An important question is being overlooked by many: what would be the impact of deferring access to this treatment, despite the clinical data underlying its approval? Based on our current estimates of the progression rates of the disease, every day over 1,000 Americans will advance from early stages of disease to moderate and severe stages of disease, and thus may progress beyond the stages during which ADUHELM should be initiated. We feel a strong obligation to be able to offer new options to patients with this devastating disease.


And when Biogen is not whining, it’s rolling out an aggressive marketing campaign to get people to worry about their memory capacities. Its website with a doubt-inducing quiz sends all comers(even if they answer all questions negatively!) to consult with their doctor for cognitive testing to determine if they may have early Alzheimer’s and be a candidate to take Biogen’s at-most-marginally-effective and expensive drug.

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  1. Brian Beijer

    After reading articles like this, I start wondering if David Icke didn’t have a point about us being controlled by reptiloids.

  2. ambrit

    Medicare will pay for some sorts of drugs administered in both an outpatient setting and at home under Part B.
    Medicare was paying for immunosupressive anti-cancer drugs for Phyllis which were being administered through an IV drip in a clinic every two weeks at over 1,400 USD per treatment. Thus, the manner of administration is important here. It being Medicare Part B, the “patient” is on the hook for 20% of that charge. This highly expensive drug looks to be a very efficient population ‘culling’ method.
    Stay safe.

  3. Ben S

    Biogen’s problem now is that doctors aren’t prescribing it, and even the patients are aware it doesn’t work.

    1. Carolinian

      But surely they’ll be cranking out TV ads to reverse those perceptions. Can we finally ban drug advertising….please….

  4. KLG

    For a review of the data as Biogen finagled approval by the FDA, read the Aducanumab section of this review from scientists at the Cleveland Clinic and UNLV School of medicine, which was published last month:

    My question is still this, has it been determined yet that amyloid plaques are cause, effect, or correlation? Or unrelated? Whatever, Biogen has its blockbuster and that was their only intention all along. Wally Gilbert must be very proud of his creation.

  5. TimH

    Two questions for you all:
    1. Can Medicare (trad., not Advantage) inform that it will refuse to reimburse aducanumab, on the basis that the pre-approval studies show it to be ineffective?
    2. Can Biogen sue institutions that refuse to prescribe aducanumab, on the basis that it is approved?

    1. Grumpy Engineer

      Plus a third:
      3. Can Medicare refuse coverage of any medicine that too expensive relative to the benefit it provides?

      Three weeks ago I quoted the following axiom in refer to the student loan program: “Any government program that CAN be abused for power, privilege, and profit WILL be abused for power, privilege, and profit.

      Right now it seems like Medicare falls into the same category, and they’re apparently obligated to cover prescriptions no matter how costly or minimally effective they are. That’s a sure-fire recipe for abuse.

      1. TBellT

        Medicare could make a decision that counters the FDA and say there’s no clinical benefit, but that has never happened before (see article linked above in reply to ambrit). It can not consider cost when determining coverage, only clinical effectiveness.

  6. Parker Dooley

    Look at the side effects profile. 40% in trial with evidence of brain swelling +/or bleeding. Who would agree to take this drug?

    1. Carla

      Only a demented person. Oh, wait…


      This country is beyond broken, and it just keeps getting worse.

      1. drumlin woodchuckles

        Or somebody who will inherit a lot of money when the demented person dies, if the demented person is a demented rich person.

  7. Jeremy Grimm

    Aducanumab — who came up with this name? What a horrible name! It does seem to fit the drug it is attached to.

    1. Yves Smith Post author

      The point is to have the non-branded name be ugly so that when it ever goes generic, no one will remember it. The marketing name will be cute.

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