newly Approved drug Treating Alzheimer’s disease is expected to cost Medicare billions of dollars. According to one prediction, spending on drugs for Medicare patients can be higher than the Environmental Protection Agency’s or NASA’s budget.
There is little evidence that the drug Aduhelm slows the progression of dementia, but the Food and Drug Administration approved it this month. Analysts expect Medicare and its registrants, who pay part of the cost of prescription drugs, to spend $ 5.8 to $ 29 billion annually on drugs.
“It’s immeasurable,” said Triciano Iman, executive director of the Kaiser Family Foundation’s program on Medicare policy. “These are crazy numbers.”
Many other drugs are more expensive than Aduhelm, which is manufactured by Biogen and sold for $ 56,000 a year. The difference is that it has millions of potential customers and the drug is expected to be taken for years.
I have drug approval Called criticism From health policy experts and pharmaceutical researchers as it has not been proven effective. Effectiveness, when widely prescribed, can have an overwhelming impact on Medicare’s budget, as the public program targets the majority of the approximately 6 million Americans diagnosed with Alzheimer’s disease. there is.
There is little precedent for the shock of sudden spending of this size. Even at the lower end of the prediction, Aduhelm will be one of Medicare’s most expensive drugs.
At the high end, analysts say the new drug could increase Medicare’s annual spending on drugs offered in hospitals and clinics by 50% (because it requires an intravenous Aduhelm).
The comparison here is a rough estimate. One-third of Medicare subscribers are covered by a private Medicare Advantage plan that does not disclose detailed information about the medications offered in the clinic. To estimate that spending, we used drug spending data from Medicare subscribers in traditional public programs and increased the data to account for the missing shares.
Spending on this scale can suddenly have a widespread impact on Medicare, its users and taxpayers. Add $ 29 billion A year on the Medicare budget is paid by increasing both taxpayer spending and premiums paid by all Medicare users. Supplemental plans purchased by many Medicare recipients may also increase premiums to offset costs that the program does not pay directly. And costs are likely to spill over into the state budget, and Medicaid pays low-income Medicare subscribers.
Congress, budget experts, and some White Houses have spent years proposing ways to reduce spending on Medicare, a large and growing share of the federal budget. However, many of these proposals are politically difficult to achieve and, in most cases, do not save more than Aduhelm’s expected costs.
“It’s a daunting task to get far less savings than the cost of this one drug,” said Joshua Gordon, director of health policy for the responsible Federal Budget Committee, thinking non-stop on the challenge. It states that it is. It has been raised by Aduhelm since its approval.
Cost predictions vary because analysts do not know how many patients will eventually use the new drug. FDA approval could apply to anyone diagnosed with Alzheimer’s disease, or about 6 million. However, the drug was developed for a smaller group of about 1.5 million patients in the early stages of the disease. Analysts still don’t know which doctor recommends treatment and which family wants to try it. The FDA has asked Biogen to continue researching the drug until 2030, but the prescription may spread before further public results on how well it works.
Biogen spokeswoman Allison Parks said in an email that he would focus on reaching the types of patients studied in the company’s clinical trials “at the early stages of the disease.”
This range reflects the estimates of various reasonable experts. High quote, Kaiser paper, It is estimated that about a quarter of the 2 million Medicare registrants currently being treated for Alzheimer’s disease will take it. The lower one is based on Cowen and Company analysts’ estimates of total sales of $ 7 billion by 2023.
It is difficult to estimate how many patients will use the drug. Not only is Aduhelm expensive, it is also a little difficult to take and requires a direct monthly visit to the IV center for treatment. Patients taking it should undergo multiple brain scans during treatment to look for side effects.
And the side effects themselves — about 40 percent Patients in one clinical trial showed signs of cerebral edema — some may discourage trying the drug and others may encourage them to stop taking it. (Many scans (and treatment of more serious side effects) are also covered by Medicare.)
There are 6 million Medicare subscribers who do not purchase supplemental compensation and may have to pay 20% of the cost of the drug, in this case $ 11,200 per year.
Nevertheless, there may be high demand from families looking for opportunities to intervene when faced with a catastrophic diagnosis. To date, few treatment options are available to patients who want to prevent cognitive decline from the disease.
Dr. Steven Pearson, a primary care physician and director of the Institute for Clinical Economic Review (ICER), said: ). “It’s very difficult to ignore the willingness to do something.”
- New year, new budget: The federal fiscal year 2022 began on October 1, and President Biden revealed what he wanted to use after that. However, spending requires the approval of both parliaments.
- Ambitious total spending: President Biden wants federal spending $ 6 trillion In fiscal year 2022, total spending will increase to $ 8.2 trillion by 2031. This will make the United States the highest sustainable level of federal spending since World War II, with a deficit of over $ 1.3 trillion over the next decade.
- Infrastructure planning: The budget outlines the first year of the president’s desired investment American Employment PlanTrying to fund improvements in roads, bridges and public transport More That’s a total of $ 2.3 billion over eight years.
- Family planning: The budget is also his other major spending proposal that Biden has already developed. American family planningAimed to strengthen the United States Social safety net By increasing access to education, reducing childcare costs and helping women in the workforce.
- Required program: As always, compulsory spending on programs such as social security, Medicaid, and Medicare make up a significant portion of the proposed budget. They are growing as the American population ages.
- Discretionary spending: Funds for Individual budget of Institutions and programs Under government, it will reach about $ 1.5 trillion in 2022, an increase of 16 percent from the previous budget.
- How Biden pays for it: The president will primarily fund his agenda Tax increase With a company High-income earners, Will begin to reduce its budget deficit in the 2030s. Government officials say the tax hike will completely offset 15 years of employment and family plans, and budgetary demands support it. Meanwhile, the budget deficit will remain above $ 1.3 trillion each year.
Doctors who administer this drug and are paid a large portion of the drug by Medicare for their work may face a financial incentive to say “yes” when the patient asks for it.
Rachel Sachs, a law professor and recent author at Washington University in St. Louis, said: essay In the Atlantic Ocean, the drug claims to have the potential to “break American medical care.”
Private insurers may impede treatment and require patients to undergo additional tests or to prove that other options are not working. However, under normal circumstances, Medicare covers drugs approved by the FDA. Medicare decides which drugs to cover based on whether it is “reasonable and necessary” rather than cost.
Medicare initially has to pay this type of drug at a fixed price, in addition to the 3% fee to the doctor giving it. Then, about a year after it hits the market, you pay the average selling price plus 6%. For competitive drugs, their average price can be significantly lower than the sticker price. But for drugs like Aduhelm, the first of its kind, drug companies may not offer doctors a discount.
For 61 million Americans over the age of 65, Medicare has several tools to keep costs down. It is a departure from normal practice, as it may decide to cover the drug in a more restrictive way than FDA approval.
Or it could do something even more unusual: an unexpected alliance of supporters Proposed Medicare conducted a randomized trial of the drug and evaluated how well it worked. Some parts of the country pay to cover the drug, while others do not. Such policy experiments have been approved under the Affordable Care Act, but have never been used to thus limit the scope of the drug.
In other countries, negotiating low prices with Biogen may control the cost of Aduhelm or simply refuse to buy. Most people consider the effectiveness of a drug when deciding what they are willing to pay.So far, the drug has not been approved for use Other parts of the world..
Medicare cannot do that. There is no way to negotiate the price because of the method of paying for the drug under current law. Democrats are increasingly supporting legislation to change that.House Passed law In 2019 it will empower Medicare to negotiate some prices, but it died in the Senate. Congressmen resubmitted the same bill in the House of Representatives in April.
President Biden supports allowing Medicare to negotiate drug prices, but did not include that policy in his proposed American family plan.
ICER Dr. Pearson Estimated Taking into account the effectiveness of the new drug, the fair price is between $ 2,500 and $ 8,300.
“It would be interesting to see if this would start a debate about fair pricing in the United States,” he said. “To most people, this looks like a good example of a price that doesn’t match the evidence.”
Methodology: Estimated current spending on Medicaid Apartment B drugs was withdrawn from the Medicare and Medicaid Service Part B centers. Drug spending dashboard, And adjusted 54% to take into account Medicare recipients enrolled in the Medicare Advantage Plan. Due to the demographics of who is participating in which program, this assumption can overestimate current drug spending. )
Medicare Apartment D drug costs were withdrawn directly from CMS Part D. Drug spending dashboard, And these numbers do not include all the rebates paid for the drug plan and may represent an overestimate.
Aduhelm’s high spending estimate comes from the Kaiser Family Foundation. paper.. The low estimate is derived from Cowen and Company’s total sales estimate and is adjusted to account for an estimated 80% of patients with early-stage Alzheimer’s disease enrolled in Medicare. Also, the first 3% of Medicare is paid to the doctor for overhead and management.
New Alzheimer’s disease drugs can cost the government as much as they spend on NASA
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