WASHINGTON -- Medicare said Tuesday that it will limit coverage of the $28,000-a-year Alzheimer's drug whose benefits have been widely questioned, a major development in the nation's tug-of-war over the fair value of new medicines that offer tantalizing possibilities but come with prohibitive prices.
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The initial determination from the Centers for Medicare and Medicaid Services means that for Medicare to pay, patients taking Biogen's Aduhelm medication will have to be part of clinical trials to assess the drug's effectiveness in slowing progression of early-stage dementia as well as the drug's safety.
Medicare's national coverage determination would become final by April 11, after a public comment period and further evaluation by the agency.
"Alzheimer's disease is a devastating illness that has touched the lives of millions of American families," Medicare administrator Chiquita Brooks-LaSure said in a statement. The Centers for Medicare and Medicaid Services "has been and remains committed to providing the American public with a clear, trusted, evidence-based decision that is made only after a thorough analysis of public feedback on the benefits and risks of coverage for Medicare patients."
The requirement for clinical studies applies to the entire class of drugs of which Aduhelm is a pioneer -- monoclonal antibodies that work against amyloid, a kind of protein that forms plaques characteristic of Alzheimer's disease.
Biogen sharply disapproved of Medicare's decision. The company said in a statement that the decision "denies the daily burden of people living with Alzheimer's disease." Randomized clinical trials "will exclude almost all patients who may benefit."
The company said clinical trials can take months to years to set up, and "hundreds of Alzheimer's patients ... are progressing each day from mild to moderate disease stages, where treatment may no longer be an option."
Biogen's initial launch price of $56,000 a year for Aduhelm led to an individual's increase of nearly $22 in Medicare's monthly Part B premium for outpatient care, the largest ever increase in dollar terms though not percentage-wise. Medicare attributed about half of this year's increase to contingency planning for Aduhelm.
Faced with skepticism over its medication, Biogen recently slashed the price to $28,200, but Medicare enrollees were already on the hook for the sharply higher $170.10 premium. Health and Human Services Secretary Xavier Becerra has directed Medicare to reassess the premium increase.
Medicare officials stressed Tuesday that they did not take cost into account in the coverage decision, but rather whether Aduhelm is "reasonable and necessary" for treating Alzheimer's patients enrolled in the program.
"While there may be the potential for promise with this treatment, there is also the potential for harm," said Dr. Lee Fleisher, Medicare's chief medical officer. "This harm may range from headaches, dizziness, and falls, to other potentially serious complications such as brain bleeds." Clinical trials will attempt to determine the balance of risks and benefits, he said.
Medicare's payment rates will be determined through a different process, officials said. The program will pay drug costs and other services for patients in agency-approved trials.
Nonetheless, the high price of Aduhelm and the fact that most of the more than 6 million Americans with Alzheimer's are old enough to be covered by Medicare stretched the limits.
"Biogen came to market with an eye-popping price tag," said Tricia Neuman, a Medicare expert with the nonpartisan Kaiser Family Foundation. "Even after they slashed their drug's price in half, it is still more than $28,000, which is not insignificant. At that price, it is clearly an issue for the Medicare program, premiums and out-of-pocket costs."
CONTROVERSIAL DECISION
Aduhelm has sparked controversy since its approval by the Food and Drug Administration last June, which came against the recommendation of the agency's outside advisers.
The medicine, administered by IV in a doctor's office, hasn't been shown to reverse or significantly slow Alzheimer's. But the FDA said its ability to reduce clumps of plaque in the brain is likely to slow dementia.
Many experts say there is little evidence to support that claim. And a federal watchdog and congressional investigators are conducting probes into how the FDA reviewed the medication. Of particular concern are several undocumented meetings between FDA reviewers and company executives in the run-up to the drug's approval.
Biogen has defended its medication and pricing. But in announcing the price cut days before the Christmas holidays, the company acknowledged that cost had become a stumbling block.
"Too many patients are not being offered the choice of Aduhelm due to financial considerations and are thus progressing beyond the point of benefiting from the first treatment to address an underlying pathology of Alzheimer's disease," CEO Michel Vounatsos said at the time. "We recognize that this challenge must be addressed in a way that is perceived to be sustainable for the U.S. health care system."
Some insurers have balked at paying for the drug, while several medical centers across the country have been slow to decide on using it or said they weren't planning to prescribe it for now.
Vounatsos said this week that the company now has about 220 sites treating patients with Aduhelm. In October, the company said 120 sites had infused at least one patient.
Biogen said in June, shortly after the FDA approval, that about 900 sites in the U.S. have the equipment and expertise to immediately begin giving the drug, which requires monthly infusion.
The FDA has said Aduhelm is appropriate for patients with mild symptoms or early-stage Alzheimer's. But the agency has asked Biogen for more research.
Because the drug is administered in a doctor's office, Medicare pays for it under its Part B outpatient benefit, which is partly financed by enrollee premiums.
The financial impact of high-cost drugs tends to fall most heavily on patients with serious diseases such as cancer, rheumatoid arthritis or multiple sclerosis. But with Aduhelm, the pain would be spread among Medicare recipients generally, not just Alzheimer's patients needing the drug.
That's turned the drug into a case study of how one pricey treatment can swing the needle on government spending and affect household budgets. People who don't have Alzheimer's would still be on the hook for the cost of Aduhelm, since it's big enough to affect their premiums.
Alzheimer's is a progressive neurological disease with no known cure. The vast majority of U.S. patients are old enough to qualify for Medicare, which covers more than 60 million people, including those 65 and older and disabled people.
EVIDENCE LACKING
Medicare's decision will be a disappointment for people who were hoping the agency would cover the medicine for patients listed on the FDA label -- those with early-stage disease or mild cognitive impairment because of Alzheimer's.
But there was not sufficient evidence of its effectiveness to warrant broader coverage, experts say.
"CMS has proposed an evidence-based coverage policy after experts reviewed all relevant publicly available evidence and feedback received from stakeholders," Medicare's Brooks-LaSure said.
"Before finalizing this proposal, we will have more opportunities to hear from people with Medicare living with mild cognitive impairment due to Alzheimer's disease or mild Alzheimer's disease dementia, their family members and caregivers, as well as many other stakeholders, including patient advocacy groups, medical experts, states, payers and industry professionals," Brooks-LaSure said.
The decision is widely seen as make or break for the beleaguered drug. Several big health systems have refused to offer the drug, citing a lack of evidence on efficacy, and utilization has been low. That could change if Medicare coverage kicks in and patients begin demanding the treatment.
Medicare coverage is critical to increasing the use of the medication because about 80% of the patients who would be eligible are enrolled in the program. Private insurers often follow Medicare's lead.
Aduhelm is a man-made protein that targets a sticky substance in the brain, called amyloid beta, which some scientists believe causes the memory-robbing disease. The drug is designed to trigger an immune response that reduces amyloid plaques.
Almost three years ago, Biogen halted two late-stage clinical trials after experts concluded that the drug would not meet the goals of slowing cognitive decline and functional impairment. Several months later, the company released additional data, asserting that the drug could be effective at high doses.
The FDA's panel of outside scientific advisers rejected the argument in 2020, saying there was not evidence that the medication worked. When the FDA nevertheless approved it, the agency said the decision was not based on clinical outcomes but rather on indications that the drug sharply reduced brain amyloid. It said there was a "reasonable likelihood" that reduction would benefit patients.
The FDA initially said all Alzheimer's patients could receive the drug, then narrowed that to people with mild cognitive impairment or early-stage disease.
Although about 6.2 million people in the United States have Alzheimer's disease, according to the Alzheimer's Association, the number with early-stage or mild disease is much smaller. Biogen has estimated that only about 50,000 patients may initiate treatment in 2022 if Medicare and other insurers cover Aduhelm.
The therapy doesn't cure Alzheimer's disease or reverse it. The debate involves whether the drug slows cognitive decline by sharply reducing amyloid clumps. Some scientists are convinced that targeting amyloid will slow deterioration. Others say there is not evidence to support that -- including from the Biogen trials.
Mike Zuendel, a 67-year-old retired pediatric dentist who was diagnosed with mild cognitive impairment linked to Alzheimer's last year, was hoping for Medicare coverage for Aduhelm. He has had four infusions since September. So far, he has been billed for only the first one, but Medicare and private insurance has covered it.
In the absence of a national coverage policy, some regional Medicare administrators are paying for the drug on a case-by-case basis.
"For me, and for a lot of other people, this is a life-or-death decision," Zuendel said.
Information for this article was contributed by Ricardo Alonso-Zaldivar, Tom Murphy and Matthew Perrone of The Associated Press; and by Laurie McGinley and Amy Goldstein of The Washington Post.