New Alzheimer’s Drug Could Cause Jump in Medicare Bills

Female home caregiver visiting a senior woman with alzheimer disease at home.

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The astronomical cost of a controversial new drug approved to slow the advance of Alzheimer’s disease could mean higher premiums for most everyone enrolled in Medicare—and thousands of dollars in out-of-pocket costs for patients, a new report says.

Aduhelm—approved Monday by the Food and Drug Administration—will cost $56,000 for a year’s worth of treatment, drugmaker Biogen said this week. The high cost of treatment would mean billions of dollars in new Medicare spending as people in the federal health insurance program start using the new drug, likely causing higher Medicare premiums for most enrollees, according to a study released Thursday by the Kaiser Family Foundation (KFF).

Even at minimal levels of adoption, Aduhelm’s total cost would cause Medicare spending to balloon. If only one-quarter of those on Medicare being treated for Alzheimer’s used Aduhelm, for example, the total cost would be $29 billion, by far the largest sum for a single Medicare drug, KFF said. For comparison’s sake, Medicare currently spends a total of $37 billion on all so-called Part B drugs (the program’s Part B coverage typically includes some services and physician-administered medications like Aduhelm).

Copays for the drug would also be a burden for patients. After Medicare pays its share of the cost, each patient taking the new drug would still be responsible for $11,500 per year out of their own pockets, equal to 40% of the average Medicare recipient’s annual income. And because Aduhelm only slows—but doesn’t cure—the effects of Alzheimer’s, patients likely would shoulder those costs for several years, KFF said in its analysis.

The FDA approved Aduhelm despite questions about the drug’s benefits from members of the advisory committee tasked with determining its safety and effectiveness. Three members of the 11-person board resigned this week due to the FDA’s decision to move Aduhelm to market over their objections, according to NPR.

About 6 million people in the U.S. suffer from Alzheimer’s, a fatal type of dementia. Most are 65 and older and qualify for Medicare. Medicare usually does not factor cost into whether it will cover a treatment, so at least some enrolled in the program are likely to use the drug, leading to the rise in spending and premiums. Patients on Aduhelm, the first new Alzheimer's treatment in nearly 20 years, would receive an infusion of the drug once every four weeks, at a cost of $4,312 per infusion.

“Aduhelm may represent hope for Alzheimer’s patients and their families who have waited years for new treatments to come along, but that hope is likely to come at a high cost to Medicare, beneficiaries, and taxpayers,” KFF’s report concluded.