Medicare Is Right to Refuse to Pay for Costly Alzheimer's Drug, Says Ethicist

Arthur L. Caplan, PhD


May 11, 2022

This transcript has been edited for clarity.

Hi. I'm Art Caplan. I'm at the New York University Grossman School of Medicine, where I direct the Division of Medical Ethics.

Early in April, we had a really interesting decision by a group that usually doesn't make decisions like this. The Centers for Medicare & Medicaid Services (CMS), the agency that runs Medicare, made a decision that it was not going to pay for a drug called Aduhelm (aducanumab).

This is the drug made by Biogen, a Cambridge, Massachusetts, company, that showed a tiny bit of efficacy in slowing Alzheimer's disease and its progression in people with mild Alzheimer's. The drug had been approved earlier by the US Food and Drug Administration (FDA). Medicare usually does not get into any separate decisions; they just pay for what the FDA approves.

However, in this case, Medicare was very nervous about paying for this drug — and I think rightly so. I think they've made a decision that says, "We're only going to pay for this if it is given to someone in a clinical trial because we, at Medicare, are not convinced, even with FDA approval, that it brings very much in the way of benefit."

The FDA approved the drug against the advice of its own advisory council, and a number of the members of that advisory council quit because they were so outraged that the FDA made a decision to approve Aduhelm. Part of the reason, I think, they did that was because there isn't anything out there for patients with Alzheimer's, so there was tremendous pressure to make something available.

The clinical evidence was really weak. One trial showed a tiny amount of slowing of progression in some people. The other trial that the company ran didn't show anything. It was not a very impressive body of evidence that led the FDA to make the approval.

I think what happened is the FDA is starting to feel the heat from patient groups who see no options or people contacting them, saying, "I have a diagnosis" or "I'm seeing my mom or my dad fade away and I need something; don't you have anything?" I think FDA yielded to pressure.

I don't think that was right. I think we have to stick with strong evidence. One reason that becomes very important is that the initial price tag Biogen put on this drug was $56,000 a year — and that's just for the drug.

It's an intravenously administered drug, so there's going to be more cost in terms of taking it because you have to go to an infusion center. Additionally, you need frequent screening because some people develop some really nasty side effects, such as brain swelling and other problems, that require surveillance with PET scans and other forms of neurologic scanning to watch for adverse events.

If you take $56,000 for the drug, add the cost of the scanning, and add the cost of the administration of the drug, you're probably looking at $100,000 per person, maybe, per year. Even though the company then said they would drop the price to half of that — [around $28,000] after they got pressured — it's still a fortune.

There are millions of people with Alzheimer's out there. You're talking about something that would add tens, if not hundreds of billions of dollars to the Medicare budget, and for what? A tiny benefit for a few with a very risky drug that is very difficult to administer and is dangerous to the point where it has to be monitored all the time? I don't think the evidence is there to say, "Let's spend a huge amount of the Medicare budget trying to get this possibly, minimally useful drug out there."

Now, some patients, physicians, and maybe some of you will say, "Well, look, any hope when faced with this miserable, horrible disease is still worth it." I don't think it is. We have to say, when we're spending public money with many other disease priorities out there in addition to Alzheimer's in the Medicare budget, that we expect reasonable evidence that the drug will work.

Medicare is saying that more clinical trials are needed. They're not saying they wouldn't make it available at all, but they want to see more data. I think the data were weak and I think Medicare is right to draw the line.

It'll be interesting to see now if the FDA more and more is feeling pressure from patient groups and companies to get things approved, is it going to be the payers that are going to start to make the decisions about what's available and what they're willing to pay for, whether they are government payers or private payers?

My answer is yes. I don't think that's the right stance to take. I think the FDA should still be tough and look for evidence so they don't wind up chasing hope at huge public expense for very little return and some danger.

If the FDA won't do it, then I think the payers down the road are going to be the place where battles are fought about what's available to patients.

I'm Art Caplan at the Division of Medical Ethics at New York University's Grossman School of Medicine. Thanks for watching.

Arthur L. Caplan, PhD, is director of the Division of Medical Ethics at New York University Langone Medical Center and School of Medicine. He is the author or editor of 35 books and 750 peer-reviewed articles as well as a frequent commentator in the media on bioethical issues.

Follow Medscape on Facebook, Twitter, Instagram, and YouTube


Comments on Medscape are moderated and should be professional in tone and on topic. You must declare any conflicts of interest related to your comments and responses. Please see our Commenting Guide for further information. We reserve the right to remove posts at our sole discretion.