In a clash of two American health care giants, the Centers for Medicare and Medicaid Services (CMS) and the Food and Drug Administration (FDA) had locked horns over Aduhelm, a controversial Alzheimer’s drug. Medicare gained the upper hand on Thursday when it released its final decision to limit coverage of the FDA-approved drug.
To recap: The FDA gave the green light to Aduhelm (aducanumab) in June 2021. It was the first drug approved to treat Alzheimer’s disease in 18 years. The announcement came amid a swirl of controversy, marked by several FDA advisers resigning and Congress investigating the FDA’s approval process, which heavily involved Biogen, the drug’s manufacturer. In January 2022, Medicare announced its intention to cover the cost of the drug only for individuals enrolled in randomized trials testing Aduhelm’s effectiveness. On Thursday, three days before its decision was due to be made public, Medicare announced its final decision to restrict coverage to those participating in clinical trials.
As federally funded physician-scientists with expertise in measuring health care value and who treat patients with Alzheimer’s dementia, we believe Medicare made the right decision based on Aduhelm’s highly uncertain benefits and known harms. This decision came in the face of intense opposition from special interest groups and lobbyists, who ultimately failed to convince Medicare to reverse course. Meanwhile, Biogen threatened to sue Medicare, and the Wall Street Journal’s editorial board accused Medicare of becoming an “Alzheimer’s death panel” for government “rationing” of care.
Rationing, however, means restricting care due to cost. In our view, Medicare’s decision is justified independent of costs.
Historically, Medicare’s coverage decisions have required health services to be “safe and effective.” Aduhelm fails on both counts. Among those treated with the drug, 41% developed brain swelling or bleeding, 2% experienced serious adverse events, such as irreversible vision loss from brain damage, and the drug’s long term toxicities remain unknown. The death of at least one patient who experienced brain swelling after receiving Aduhelm is under investigation.
While some of Aduhelm’s harms are well known, its benefits are far from clear. Multiple prior clinical trials show that antibodies targeting amyloid plaque, the drug’s mechanism of action, failed to improve cognition. Two trials using higher doses of Aduhelm demonstrated possible benefit in one trial, but not the other. These two trials were not representative of Medicare beneficiaries, particularly with regard to race or ethnicity since the vast majority of participants were white. Additionally, Biogen noticed the positive result only after the company announced that the trials had no prospect of showing the drug had benefits.
Retrospective analyses increase the chance of false positive findings, especially when two similar trials show divergent results, as is the case for Aduhelm. False positive findings are more than theoretical risks: retrospective analyses previously offered false hope for solanezumab, another drug targeting amyloid plaque.
Given its unsettling safety profile, uncertain benefits, and non-representative trial population, Aduhelm merits a racially and ethnically representative confirmatory trial, which should have been completed before FDA approval, not after it had become widely used.
Although Medicare cannot consider cost when determining coverage, the American public can and certainly should do that, especially for unproven treatments with clear harms. Medicare is already expected to deplete its trust fund by 2026, endangering its ability to cover even basic, life-saving therapies such as blood pressure medications. Meanwhile, beneficiaries’ out-of-pocket health care costs are rising rapidly, straining household spending on necessities such as food or rent.
In this context, the staggering annual price of $56,000 that Biogen initially set for Aduhelm raised concern that offering an unproven drug to millions of people with Alzheimer’s would accelerate Medicare’s path to bankruptcy. Invariably, costs would shift to beneficiaries and the taxpayers who fund Medicare, which has already started to occur. In November 2021, Medicare preemptively raised beneficiaries’ premiums by nearly 15%, citing Aduhelm’s budgetary impact. Biogen’s subsequent reduction of the drug’s annual price to $28,200 does not resolve Aduhelm’s potential financial strain, and the question of whether premiums would remain onerously increased depended heavily on Medicare’s final coverage decision.
To quantify Aduhelm’s precise financial impact had Medicare approved it for widespread use, we and several colleagues identified between 1.1 million and 5.7 million U.S. Medicare beneficiaries with mild cognitive impairment or mild dementia who would be eligible to receive the drug. As we wrote in JAMA Health Forum, if just one-quarter of them received it, Medicare would need to pay an additional $7 billion to $37 billion each year, even after accounting for Biogen’s price reduction. Ancillary care, such as the MRI exams needed to monitor for brain swelling or bleeding, would comprise nearly 20% of the total costs related to Aduhelm. An individual patient’s annual out-of-pocket costs could be as high as $6,800, or 26% of Medicare beneficiaries’ median annual income.
Opponents of Medicare’s decision to cover the cost of Aduhelm only for individuals participating in clinical trials argue that rebuking the FDA sets a chilling precedent for future drug development. But this is not the first time Medicare has declined to cover an FDA-approved therapy, and possible effects on innovation, if any, must be weighed against Aduhelm’s unproven benefits and known harms.
Critics also claim that Medicare will damage equity by excluding racial and ethnic minority groups who cannot access Aduhelm at academic centers running trials. Yet it is Aduhelm’s widespread use that would damage equity. Had Medicare reversed course and decided to cover the cost of Aduhelm for all, its 60 million beneficiaries — especially minoritized individuals who bear the greatest brunt of out-of-pocket costs — would have been burdened by higher premiums needed to finance Aduhelm’s widespread use.
We believe Medicare wisely decided to not cover Aduhelm outside of randomized trials until more is known about its safety and effectiveness among diverse populations. Despite intense pressure from lobbyists and special interest groups, it prevented an unproven drug from threatening the financial stability of Medicare and millions of American households.
John N. Mafi is a general internist and associate professor of medicine at UCLA. Catherine Sarkisian is a geriatrician and professor of medicine at UCLA. Both care for patients with Alzheimer’s dementia and receive grants from Arnold Ventures and the National Institutes of Health to study harmful, low-value care among older Americans. The views expressed here are their own and do not necessarily reflect the views of UCLA or the NIH.