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'We Have a Problem': New Alzheimer’s Treatment Reflects Dysfunctional U.S. Drug Market

Approval of the controversial aducanumab, priced at $56,000, paves the way for higher spending by patients and taxpayers.

In this undated image from video provided by Biogen in May 2021, vials of the medication aducanumab are handled by machines during manufacturing in Switzerland. On June 7, 2021, the Food and Drug Administration approved aducanumab, the first new drug for Alzheimer’s disease in nearly 20 years, disregarding warnings from independent advisers that the much-debated treatment hasn’t been shown to help slow the brain-destroying disease. (Biogen via AP)

The U.S. Food and Drug Administration’s decision to approve an expensive new drug to treat the early stages of Alzheimer’s disease has become a flashpoint in the national debate about drug pricing, underscoring the perils of a dysfunctional pharmaceutical market and the shortcomings of a regulatory system under pressure to fast-track new treatments.

Aducanumab, which will be sold under the brand name Aduhelm, carries a price tag of $56,000 per year, a figure the Alzheimer’s Association decried as “simply unacceptable.” The FDA’s decision paves the way for high spending by patients and taxpayers, who will bear the brunt of aducanumab’s premium price tag. It also raises questions about the integrity and rigor of the FDA’s standards for approval, potentially smoothing the road for additional drugs that are expensive and potentially ineffective.

“This is precisely the scenario we’ve sought to avoid,” said Mark Miller, executive vice president of health care for Arnold Ventures. “There’s no evidence, the price tag is high, and a lot of people are eligible for this. If this a precedent, then we have a problem.”

The approval is also expected to have serious implications for Medicare, which is already facing budget shortfalls. It also puts Medicare on the hook for additional expenses that come with the drug, including extra payments to providers administering it and regular testing that will be required for those who use it. Medicare beneficiaries — many who tend to have limited incomes — will also face higher out-of-pocket liability and higher premiums.

“The potential exposure to the taxpayer and the beneficiary is high,” Miller said. “Medicare will be tasked with spending billions of dollars more per year on this drug, pushing the country that much further into debt and creating an even more critical situation for Medicare’s long-term sustainability.”

Aducanumab represents the first novel Alzheimer’s treatment to be approved in 20 years and the first to claim to slow brain deterioration rather than simply easing Alzheimer’s symptoms.

Developed by Biogen and Eisai, the drug, which is administered through a monthly intravenous infusion, works by clearing buildups of proteins from the brain. But scientists who have reviewed clinical trial data have long cautioned that removing such brain plaque hasn’t been proven to improve memory and that the focus on biomarkers that have not been shown to be good predictors of benefits to a patient’s health, reflects the weakening standards for FDA approval.

“There was reason to think that if you get rid of the amyloid plaque in people’s brains, they will function better,” said Diana Zuckerman, president of the National Center for Health Research. “But that hasn’t proven to be true.” 

$56K

Annual price of aducanumab

Zuckerman expressed concern that the FDA’s approval of an unproven medication with clear risks will set a precedent resulting in a “domino effect” that leads the agency to require lower standards from other drug companies.

In a 2015 study, Zuckerman and colleagues analyzed three Alzheimer’s drugs that the FDA had reviewed in the previous five years. All three showed very promising results in clinical trials based on the same biomarker: amyloid plaque on the brain. In those cases, FDA would not approve the drugs unless the companies could prove that their drugs improved patients’ memory as well.

“However,” Zuckerman writes in an article about the study, “when larger, better designed clinical trials were conducted, two of the Alzheimer’s drugs were found to be ineffective, and the third drug caused an increase in memory problems and an increase in skin cancer.”

She said that since the cognitive abilities of Alzheimer’s patients tend to decline over time but at different rates for different patients, those deficiencies would be almost impossible to detect without a control group of patients on placebo. It could not be determined based on the cognitive decline of an individual patient.

Inconsistent Evidence

The evidence from aducanumab’s own clinical trial was inconsistent. Biogen halted a late-stage trial in 2019 when evidence failed to show that the drug improved cognitive function. Several months later, the company announced that updated data showed a slower cognitive decline in people who took the drug, sparking concern about the company’s results. A statistical review by the FDA noted that the data from two studies conducted by the company were “conflicting.” One indicated slightly less cognitive decline compared to placebo, but the other indicated more substantial cognitive decline compared to placebo. The FDA review stated, “If you have two studies and you take the best and pretend like it’s the only one, your estimate is likely biased.”

Meanwhile, the drug showed serious side effects that included brain swelling and microbleeds in as many as 3 out of 10 trial participants.

These results prompted the FDA’s independent advisory board to overwhelmingly oppose aducanumab’s approval, setting up the FDA to do the same. But in a surprise move, the FDA approved the drug, despite their own statisticians’ concerns and the objections from scientific and medical communities. Since there was clear opposition to approval based on memory tests, the FDA instead approved it based on the biomarker of amyloid plaques on the brain. And while it was only studied in people with mild and early-stage Alzheimer’s, the agency approved it for all patients suffering from the disease. The decision was so controversial that three advisory board members have resigned in response.

“This is terrible for Alzheimer’s patients who get their hopes up and get nothing except delusions and brain swelling,” Zuckerman said. “This is terrible for our health care system, and it’s unbelievably awful for Medicare. It’s awful on every level, and it sets a precedent that will be very hard to undo unless somebody, such as President Biden, Secretary Becerra, or a new FDA commissioner, is brave enough to address these failures.”

There’s no evidence, the price tag is high, and a lot of people are eligible for this. If this a precedent, then we have a problem.
Mark Miller Arnold Ventures executive vice president of health care

'A Staggering Expense'

As part of the approval process for aducanumab, the FDA required Biogen to produce more trial data to show the drug’s efficacy, but the company will not be required to submit it to the FDA until 2029. Zuckerman cautioned that the delay will drive up spending while potentially harming countless Alzheimer’s patients in the meantime. Because the drug was approved for wide usage, as many as 6 million people diagnosed with Alzheimer’s will be eligible to get a prescription. The delay could also stymie further clinical trials as patients opt to take the drug rather than enroll in clinical trials where they risk getting a placebo, further complicating efforts to collect more robust data for aducanumab or any potentially more effective Alzheimer’s drug.

In addition to the outrage about the approval process, aducanumab’s price tag has also stoked anger and concern. Biogen set the list price at $56,000 annually, far exceeding the expectations of analysts and drug pricing experts.

Biogen’s decision to price aducanumab at such a high level has raised questions about the value of a drug that has conflicting clinical results or whether Biogen established too high a floor for a treatment, setting the stage for even pricier treatments, or real and proven Alzheimer’s cures, that may come to market in the future.

“It’s a staggering expense,” Miller said.

Especially concerning is that the cost will present what the Alzheimer’s Association calls “an insurmountable barrier to access” for patients. Even with Medicare coverage, beneficiaries will be responsible for 20 percent of the medication’s price, or $11,500 per year. That figure represents nearly 40 percent of the $29,650 median annual income for Medicare beneficiaries as of 2019. While many beneficiaries have supplemental coverage, which will help soften the blow, the cost will still be substantial and will impact premiums and deductibles. In a recent statement, the Alzheimer’s Association called on Biogen to reduce the price.

These expenses could lead to long-term fallout for the system as a whole. Private insurers have said that they will weigh the costs and potential benefits before making a decision about coverage, and coverage for moderate or severe Alzheimer’s could be denied since those patients were not studied, but Medicare and insurers will face intense pressure from patients to make it available.

Increased Costs to Medicare

Medicare could be particularly hard-hit. The program typically provides full coverage for any drug approved by the FDA without taking cost into consideration. Because aducanumab is administered through intravenous infusion, it will be covered by Medicare Part B, which does not set its own drug rates. Once the drug has been on the market, it reimburses at 6 percent above the average sales price.

The drug’s broad availability is likely to mean increased costs to Medicare. Based on Biogen’s expected prescription volume, a report from the Kaiser Family Foundation estimated that Medicare spending on aducanumab could exceed $57 billion dollars per year — more than all other current Part B-covered drugs combined. That $57 billion is considered the low-end of the estimated annual spending increase.

“The billions of dollars in new Medicare Part B spending will likely lead to higher Part B premiums for all 56 million Part B enrollees in traditional Medicare and Medicare Advantage,” the report concluded.

$57B

Amount that Medicare spending on aducanumab could exceed per year — more than all other current Part B-covered drugs combined

Part of the problem, said David Mitchell, founder of Patients for Affordable Drugs, is that Medicare does not have enough negotiating power over the prices of new drugs like aducanumab.

The drug is likely to drive other costs, as well. An expensive PET scan is required to determine if a patient has Alzheimer’s disease rather than a different type of dementia. And because of the risks of treatment, PET scans are likely to be used to check for changes in brain plaque, which are not often covered by insurance; MRIs are likely to be used to monitor brain swelling; and more provider interactions will also be needed, adding extra expenses into the system.

Aducanumab’s approval is also likely to cause consequences for drug quality writ large. The low standard of evidence the FDA required for approval opens the door for other ineffective and expensive drugs to come to market. In general, accelerating drug approvals is meant to incentivize the development of new drugs. But the agency, having approved a drug based on questionable biomarker data — as opposed to actual patient outcomes — may now be reluctant to deny approvals in the future for equally ineffective drugs. Drug companies that were previously denied could be emboldened to seek approval once again. Experts say this is the result of an FDA that has bowed to industry pressure in recent years in emphasizing unreliable evidence like biomarkers and ignoring patient outcomes in its rush to approve novel drugs.

'Political Hot Potato'

Zuckerman, for her part, sympathizes with patients and families who are seeking a solution for their loved ones. Her father had dementia — although not Alzheimer’s disease — and he took a series of ineffective treatments. “People just want hope. Patients and family members want to believe that these drugs work, even when the evidence is indicating they don’t,” she said.

The desire for an effective treatment of a terrible disease is part of the reason that aducanumab is what Zuckerman called a “political hot potato.” But that does not justify the medical and financial risks it poses to patients, she said.

“How many billions of dollars are we going to spend for a treatment that… will likely harm a lot of people? Experts have known for years from previous data that improvements in amyloid plaque that has already developed is unlikely to improve memory function,” she said.

The approval of aducanumab reinforces the need to reform FDA’s standards for clinical trials, which should require evidence of meaningful improvements for patients rather than studying biomarkers that don’t necessarily translate to benefits for patients. It also underscores the importance of equipping the federal government with tools to negotiate the prices drugs on behalf of patients.

“We are watching our drug pricing system break under the weight of Medicare’s inability to negotiate lower drug prices,” Mitchell said. “Americans want new treatments for unmet needs, but the price announced by Biogen lends further urgency to the drive to reform our drug-pricing system.”

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