Is An Unproven Medication Worth More Than the EPA or NASA?

For those who have not followed the FDA’s controversial decision of approving Aducanumab for the treatment of Alzheimer’s disease, the NEJM has two useful commentaries:

Key points -from 1st article:

  • “Biogen…has announced a list price of $56,000 –10 times the evidence-based benchmark recommended by the independent Institute for Clinical and Economic Review…if even 10% of U.S. patients with Alzheimer’s disease were prescribed aducanumab, drug spending for Medicare Part B would increase from $37 billion to $69 billion per year”
  • The authors note that Medicare Part B payments rely on average sales price (ASP) from private insurers rather than a direct negotiated price; thus, the higher the price for private plans (even if poorly covered), the higher the Medicare rate
  • Hospitals and physicians are incentivized at higher prices due to receiving a 4-6% reimbursement price over the acquisition price
  • “The $56,000 price for aducanumab is a rational manufacturer response to an irrational insurance system.”

Key points -from 2nd article:

  • By one estimate, the potential cost will exceed the budgets of agencies such as EPA or NASA
  • “In granting accelerated approval to aducanumab, the FDA concluded that the drug’s ability to reduce amyloid plaques was reasonably likely to translate into clinical benefits. But this claim is hotly contested and was not presented to the FDA’s advisory committee, which voted against recommending approval of the drug because of the lack of a demonstrated clinical benefit”
  • If Medicare refuses to cover medication, this would leave a burden to state budgets. “As a legal matter,…state Medicaid programs are required to cover nearly all FDA-approved drugs.”
  • “Congress could adopt new legislation specifying that state Medicaid programs need not cover aducanumab…Protecting state budgets shouldn’t require Medicare to cover an expensive drug with unproven clinical benefits.”

My take: This type of huge fiscal burden may provide the rationale for Medicare and Medicaid to reexamine whether/how they cover expensive FDA-approved medications.

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