Do you remember the story of Chicken Little? It goes back at least 200 years and is attributed to Scandinavian folk tales. The story has also been called Henny Penny and Chicken Licken. Perhaps you remember the key phrase: “The Sky is Falling!” The message: disaster is right around the corner. Some days I feel a little like Chicken Little. That’s because I fear the high cost of Aduhelm for Alzheimer’s could truly break the bank of American healthcare.
The Aduhelm Controversy:
In case you have missed the health news over the last week, there is a new drug for Alzheimer’s disease. The FDA approved aducanumab –Aduhelm – for Alzheimer’s disease on June 7, 2021. It stirred up one of the biggest FDA controversies in decades. You can read our take on this drug approval at this link.
New Alzheimer’s Drug Aduhelm: Breakthrough or Boondoggle?
The FDA just approved the first new drug for AD in nearly 20 years. Is Aduhelm a breakthrough as some suggest? Get the inside scoop!
I Told You This Day Was Coming:
The reason that I feel so much like Chicken Little is because I warned about the coming tsunami of drug costs years ago. Seven years ago I asked the question: Are Drug Companies Bankrupting Healthcare?
Are Drug Companies Bankrupting Healthcare?
Pricey pills for cancer, hepatitis and other hard-to-treat conditions are bankrupting individuals, insurance companies and programs like Medicare, Medicaid and Veterans Affairs.
On January 13, 2020, I wrote:
Will High Drug Prices Soon Destroy Healthcare?
Has the pharmaceutical industry become too greedy? High drug prices for rare but deadly diseases are breaking the health care system. 2020 is no exception.
I specifically asked:
“What if drug companies came up with truly effective medications for people with devastating conditions? If those conditions affected hundreds of thousands or millions of people, the health care system would likely collapse like a house of cards.”
That day has arrived. The only problem is that there are serious doubts that Aduhelm for Alzheimer’s disease represents a truly effective medication against dementia.
Two prominent Harvard professors wrote a guest essay in the New York Times titled “The F.D.A. Has Reached a New Low (June 15, 2021). One of the authors, Dr. Aaron Kesselheim, resigned from the FDA’s advisory committee over the agency’s approval of Aduhelm for Alzheimer’s disease.
Here are a few choice comments from the NYT article:
“For aducanumab, the evidence that its manufacturer, Biogen, submitted to the F.D.A. showed no convincing effect on patients’ cognitive decline. Its two main trials were stopped early in 2019 because the company concluded its drug did not work.
“Even worse, although aducanumab was tested only in patients with mild disease, the F.D.A. inexplicably approved it for use in any person with Alzheimer’s, regardless of severity. It enters the market now as a monthly intravenous infusion with a $56,000 annual price tag and the need for regular M.R.I. scans to monitor for the possible brain swelling it can cause.”
The High Cost of Aduhelm for Alzheimer’s Disease:
If you think $56,000 a year seems pricey, that’s just the beginning. It is expected that insurance companies may not be willing to pay for Aduhelm unless patients can prove that they have amyloid plaques in their brains. A PET scan to detect amyloid plaque can cost $5,000 or more. And insurance companies and Medicare may not be willing to pay for this diagnostic test.
Then there are the additional brain scans to make sure patients aren’t developing brain swelling or micro bleeds. It is not clear that insurance companies or Medicare will pay for these additional tests. The bottom line is that $56,000 is just the starting price. Total costs could be substantially more.
The Kaiser Family Foundation (KFF) recently estimated the cost of Aduhelm for Alzheimer’s disease (June 10, 2021).
There are an estimated 6 million people dealing with Alzheimer’s disease in America. If just 500,000 Medicare beneficiaries were prescribed Aduhelm:
“…total spending for Aduhelm in one year alone would be nearly $29 billion, paid by Medicare and the patients who use this drug—an amount that far exceeds spending on any other drug covered under Medicare Part B or Part D, based on 2019 spending. To put this $29 billion amount in context, total Medicare spending for all Part B drugs was $37 billion in 2019.”
Now imagine a different scenario. Instead of 500,000 Medicare beneficiaries getting a prescription for Aduhelm, consider one-third of the six million Alzheimer’s patients. That would be two million people. Instead of costing $29 billion, the number would be closer to $120 billion. Can you even conceive of such a big number? It would bankrupt Medicare in short order.
Insurance companies would also be on the hook for billions. And all this for a drug that might or might not work!
Bankrupting Healthcare:
Imagine a day where there is a true breakthrough drug against Alzheimer’s disease. I am not talking about a drug that affects a surrogate endpoint such as amyloid plaque. I am talking about a drug that actually restores memory and allows people to resume their daily activities as if they no longer have dementia.
A drug company might charge over $100,000 annually for such a medicine. Multiply $100,000 times 6 million people. The annual bill could be in excess of:
$600,000,000,000
Insurance companies, Medicare and Medicaid would collapse within a year. That one hypothetical drug would likely bankrupt healthcare. Such a drug would bankrupt the government within a few years. Now you know why I feel like Chicken Little. Unlike that character, though, I fear my worries might be justified.
If you think this article is worthy, please share it with friends and family. You may also want to read the article:
Will High Drug Prices Soon Destroy Healthcare.
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