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Should Medicare Decide If You Can Get an Alzheimer’s Drug?

Scott Gottlieb, M.D.

By Scott Gottlieb, M.D.

Medicare recently denied coverage of Aduhelm, a new drug to treat Alzheimer’s disease. The episode is an illustration of why the government health program shouldn’t be in the business of deciding who can receive promising new therapies.

The approval of Aduhelm, made by Biogen, has been controversial. Clinical trials failed to show a long-term benefit for patients. One criterion the Food and Drug Administration used to judge the drug—the reduction of plaque deposits that Alzheimer’s patients build up in their brains—is unsettled science. The amyloid deposits are associated with advanced disease. But there’s disagreement about whether this is merely a mark of disease or the mechanism by which Alzheimer’s ravages cognition.

The drug has become an example for critics who bemoan the rising cost of medicines to treat serious conditions and the limited data that often accompany innovative products when they first win FDA approval. Activists pressured the Centers for Medicare and Medicaid Services, the agency that oversees Medicare, to restrict coverage.

Private insurance plans will follow the CMS’s lead, all but limiting access to those participating in a government study or those who can pay out of pocket, which is only the especially wealthy. Medicare said it would pay for the drug only for those enrolled in a randomized trial sponsored by the National Institutes of Health. The CMS decision would apply to the entire class of drugs in development that try to slow or remove the deposition of amyloid plaque to improve cognitive function.

Biogen made plenty of mistakes in how it advanced and priced its drug, now $28,000 for a year of therapy, down from an initial price of $56,000. Many drug-industry critics applaud Medicare’s muscular response. But the risk is that public-health agencies will soon routinely make such political decisions. Regulators are increasingly focused on the price of drugs, even though such considerations fall outside Medicare’s legal mandate.

Medicare largely rejected the analysis that the FDA used to approve Aduhelm. Medicare’s coverage group, which is made up of eight physicians, relied on an evaluation that it conducted with the help of the NIH. Medicare took the unprecedented position that Aduhlem didn’t prove an advantage and thus didn’t need to be covered because it was approved under accelerated approval, an FDA pathway meant to expedite potentially lifesaving drugs. Under the accelerated route, a drug can win earlier approval if it shows an effect on a “surrogate endpoint”—in this case, plaque formation—that is reasonably likely to predict a clinical benefit to patients. By Medicare’s analysis, most of the new drugs approved each year for rare diseases and cancer may not meet the program’s new standard for coverage.

The FDA said that the drug’s effect on cognition was enough to merit early approval, but the CMS disagreed, without specifying what level of improvement would be sufficient. The CMS also said that the clinical trial data didn’t have enough diversity across ethnic and other groups.

But none of the current clinical trials, including the studies that the FDA required as a condition of Aduhelm’s approval, would meet Medicare’s new diversity standard. Neither would most, if not all the trials under way studying other Alzheimer’s drugs. Many of those trials have made laudable improvements in expanding access to diverse populations. Now these studies could be delayed as sponsors try to amend them to meet Medicare’s sudden retroactive requirement.

Limiting the drug’s coverage only to NIH-approved trials could further crimp access for minorities, who are frequently underrepresented in NIH studies. The trials that the CMS envisions are unlikely to be completed for years, if ever.

Fewer companies will assume the risks of researching the disease, and patients will be left with limited treatment options. Drug makers had only recently waded back into Alzheimer’s research after largely abandoning the field as too difficult.

There is still time to change course: The Aduhelm decision is a draft, set to be completed by April. But the CMS rarely changes the core of its proposals. The CMS will need a nudge from Congress to cover innovative therapies.

The legislation governing the CMS makes it largely a price taker on injectable drugs, with few resources and authorities to help answer its questions about appropriate use. The retort is that the CMS should have the authority to negotiate prices directly.

But Medicare already has a competitive market that extracts significant discounts under the program’s Part D. Injectable drugs like Aduhelm are outside this scheme for no good reason. Congress can make pricing for injectable drugs more competitive, save money, and take the CMS out of the business of deciding who can access a new medicine, by putting injectable drugs into Part D, exposing them to the same competitive pressures put on prescription drugs taken orally.

There is nothing wrong with Medicare wanting to get a good price for its beneficiaries and making sure that new drugs provide benefits. But the agency isn’t equipped to be the sole arbiter on when Americans can access an approved medicine.

Dr. Gottlieb is a resident fellow at the American Enterprise Institute and was FDA commissioner, 2017-19. He serves on the board of Pfizer Inc. and is a partner at the venture-capital firm New Enterprise Associates.

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