Medicare announces coverage of costly Alzheimer’s medication. That could mean high premiums for beneficiaries

In the Alzheimer’s affected brain, abnormal levels of the beta-amyloid protein clump together to form plaques (seen in brown) that collect between neurons and disrupt cell function. Abnormal collections of the tau protein accumulate and form tangles (seen in blue) within neurons, harming synaptic communication between nerve cells. Image by National Institute on Aging, NIH via Flickr. Public domain photo

On June 1, Medicare officials announced plans to cover new FDA-approved drugs that may slow the progression of Alzheimer’s disease. The Centers for Medicare and Medicaid Services would also require patients using the drugs to register for the purpose of gathering information on treatment results.

Results from a Phase 3 trial for one of the drugs, a monoclonal antibody called donanemab that targets amyloid plaque, showed it slowed Alzheimer’s progression by 35% compared to a placebo, drug maker Eli Lilly announced on May 3. Lilly plans to file for full FDA approval of donanemab later this year. But like other drugs in its class, it will likely be costly.

All of the study evidence is not yet available — Lilly shared the results via a press release. However, full FDA approval of the drug will probably ensure Medicare changes its stance on paying for anti-amyloid drugs. There are narrow eligibility parameters and a requirement that recipients enroll in an ongoing clinical trial to assess longer term efficacy and safety prior to full FDA approval. This policy affects Aduhelm (aducanumab) and Lequembi, (lecanemab) both manufactured by Biogen/Eisai, and both approved under the FDA’s emergency use authorization (EUA). 

Medicare has been under pressure to rescind the registration policy when expected full FDA approval is granted. During Congressional testimony in April, CMS administrator Chiquita Brooks-LaSure said Medicare would pay for the drugs if fully approved. 

Once that happens, real-world drug and ancillary expenditures could add as much as $5 billion in annual Medicare spending, according to a research letter in JAMA Internal Medicine, which analyzed potential costs of Lequembi. This Alzheimer’s treatment costs $26,500 annually, not including follow-up scans or screenings. Donanemab pricing is expected to be similar. 

Impact on beneficiaries

Questions journalists should be asking CMS officials, Alzheimer’s advocacy groups and pharmaceutical companies include:

  • How will these costs impact annual Medicare premiums?

“Additional costs could strain the Medicare program and its beneficiaries, who may face rising premiums to help Medicare pay for the drug. Additional premium increases are especially concerning because many older Americans rely on a fixed income,” said Julia Cave Arbanas, research project manager at the UCLA Geffen School of Medicine and a co-lead author of the paper. 

Arbanas and her colleagues performed a cost-analysis using data from the nationally representative 2018 Health and Retirement study (HRS), incorporating both the direct drug costs and the indirect ancillary costs for associated health services such as MRIs, neurology visits, and other related care. They found that medication and ancillary out-of-pocket costs for patients lacking supplemental coverage could reach $6,600 per year, approximately one fifth of the median income of a U.S. Medicare beneficiary, based on 2019 data. Medicare annual spending on just Lequembi alone, without ancillary costs added, would make it one of the most expensive Part B medications

Because of the risk of brain swelling and brain bleeding, also known as amyloid-related imaging abnormalities, or ARIA, current treatments require frequent monitoring through neurology visits and MRI scans. Without supplemental insurance or limited deductibles, these additional costs can quickly become a burden for many older people and their families.

“These [Alzheimer’s] medications have modest clinical benefit and clear risk of brain swelling and bleeding for patients, which in rare cases may be fatal,” Arbanas said. In the donanemab trials, about 24% of patients on the drug had brain swelling and nearly a third (31%) had brain bleeds. About 1.6% of these were considered serious; three people in the trial died.

According to the authors, limitations of their analysis included use of plaque rates derived from population studies rather than from HRS participants’ scans, possible misclassification of some cases of dementia prevalence and stage, and possibly unreliable responses from participants with cognitive impairment. Also, the researchers did not account for price changes, societal costs, and potential long-term changes in health system capacity or patient demand.


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