Not covering emerging Alzheimer's drugs could cost Medicare billions: study

Emerging Alzheimer’s disease medications come with high price tags, but researchers with the University of Chicago calculate that in the long run, it’s much less costly to cover these therapies for Medicare beneficiaries.

Providing coverage for these drugs would save the public payers between $13.1 billion and $545.6 billion in healthcare costs over the course of 17 years, according to the white paper.

The Centers for Medicare & Medicaid Services (CMS) currently requires that these therapies undergo a coverage with evidence development process for the agency to approve its use, and the researchers point out that can take 17 years. Medicare at present only offers coverage for drugs targeting amyloid beta plaques for patients enrolled in clinical trials.

The lengthy durations of coverage with evidence trials cause delays in broader coverage leaving many patients with faster disease progression, the researchers said.


CMS usually approves medications for Medicare beneficiaries for pharmaceuticals sanctioned by the Food and Drug Administration (FDA), even medications greenlighted under the FDA’s accelerated approval process. But that hasn't been the case for emerging Alzheimer's therapies.

For instance, CMS wants more evidence about lecanemab, though the FDA granted the drug accelerated approval and the Department of Veterans Affairs (VA) decided to use it for patients in the VA system.

Part of the additional costs under CMS’ current policy would stem from an increase in private and public healthcare spending by $6.8 billion to $284.5 billion, according to the study.

“For Medicare, the value lost ranges from $3.1 billion to $128 billion for CMS delay of 0 to 17 years, and for Medicaid the range is $1.3 billion to $54.1 billion,” the white paper said. “Combining Medicare and Medicaid, the value lost to public insurance would range from $4.4 billion to $182.1 billion.”

The researchers added that this might be a conservative estimate of healthcare dollars lost due to the current coverage policy. Researchers used the metric value of a statistical life year, estimating how much a year of life might be worth assuming that this class of drugs can delay disease progression for a year.

A year delay in Alzheimer's progression from mild to moderate would save $34,249 in market costs and $7,882 from non-market costs. The researchers added that there are also many impacts of Alzheimer's that can’t be measured monetarily.

“At $150,000 VSLY, a standard threshold often used in policymaking, the value is $23,550, resulting in a total value of both cost savings and health of $65,681,” the white paper said. “As the disease progresses, treatment would become relatively less effective, increasing the cost of treatment due to disease progression, which is not captured by our assumption but is highly likely to happen by the delay in coverage; this renders our estimates conservative.”

The researchers urged the Congressional Budget Office (CBO) to take their findings into account when estimating the coverage costs for Alzheimer's medications and note that the CBO only considers “budgetary effect rather than the full value and benefits of policies."

"In addition, the Office of Actuary at CMS also projects spending on potential AD drugs as it impacts Medicare premiums,” the researchers said.

Reducing spending on specific drugs ultimately raises total healthcare costs, the white paper said.

In addition, the policy is “also forfeiting substantial health gains that could have been realized from improved health and treatment savings with slower disease progression.”

The researchers urge the CBO to use a “more holistic valuation approach when it comes to scoring for CMS actions.”