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Kaiser Report: Price Tag for Controversial Alzheimer’s Drug Could Hit $56 Billion Per Year – Are There Better Uses for Those Dollars?

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The story was all over the news last month as the Food and Drug Administration gave its approval to a controversial new Alzheimer’s drug to be marketed under the brand name Aduhelm. Almost immediately a backlash arose over the fact that the drug doesn’t seem to cause a degree of improvement that would justify its high cost.  More recently the FDA required the manufacturer, Biogen, to change its labeling to clarify that Aduhelm is not targeted at all Alzheimer’s sufferers but is intended only for  people with mild cognitive impairment due to the degenerative disease. This adjustment so soon after approval has only deepened the controversy.

This week we read this important report from Kaiser Health News in which reporter Judith Graham asks what we think is exactly the right question. When you consider the tens of billions of dollars that this drug might cost each year, and the modest benefits that are expected to result, are there better ways our healthcare system could be spending that money? After consulting a wide range of experts, Graham finds eight different ways those dollars could be spent for far better results. Let’s take a look at what she found.

Tens of Billions of Dollars Will Be Spent on Unproven Benefits

“If you could invest $56 billion each year in improving health care for older adults, how would you spend it?” Graham asks. “On a hugely expensive medication with questionable efficacy — or something else? This isn’t an abstract question.”  In her Kaiser article, Graham reports that the issue is very real: Aduhelm, the new Alzheimer’s drug, could be prescribed to 1 million to 2 million patients a year, according to conservative estimates from manufacturer Biogen.

The average annual cost per patient is a whopping $56,000, which puts the total price tag for this unproven new drug at $56 billion per year. “That’s a huge sum by any measure,” Graham writes — “more than the annual budget for the National Institutes of Health (almost $43 billion this year).”   Yet as this early June Kaiser article reported, “there’s considerable uncertainty about Aduhelm’s clinical benefits, fueling controversy over its approval. The FDA has acknowledged it’s not clear whether the medication will actually slow the progression of Alzheimer’s disease or by how much.”

“This drug raises all kinds of questions about how we think about health and our priorities,” said Dr. Kenneth Covinsky, a geriatrician and professor of medicine at the University of California-San Francisco.

Impact on the Medicare System Could be Severe, Far-Reaching

It’s tempting to think that the approval of a new drug for dementia only affects patients who receive a prescription for it, but that’s far from true. “Since most Alzheimer’s patients are older and on Medicare, the medication would become a significant financial burden on the federal government and beneficiaries,” Graham writes. “Several experts warn that outlays for [Aduhelm] could drive up premiums for Medicare Part B and Medicare supplemental policies and raise out-of-pocket expenses.”

The Kaiser article adds that there is also a serious “lost opportunity” cost if the system has to absorb such a high price tag for one drug.  Dollars spent on Aduhelm can’t be used for other investments that might improve care for older adults. “If Medicare and Medicaid must absorb drug spending of this magnitude, other priorities are less likely to receive attention,” the article warns.

So, to put this issue into perspective, Graham did what good reporters do: she investigated. “I asked a dozen experts — geriatricians, economists, health policy specialists — how they would spend an extra $56 billion a year,” she explains. “Their answers highlight significant gaps in care for older adults.” We’ll review their suggestions, edited for length.

Recommendation #1: Make Medicare More Affordable

“High out-of-pocket expenses are a growing burden on older adults and discourage many from seeking care,” Graham writes. She consulted Hunter College professor Dr. David Himmelstein, an expert in urban public health, who said that extra funding could be directed at reducing those costs. “I’d cut Medicare copayments and deductibles,” he told Graham. “I think that would go a long way toward improving access to care and health outcomes.”Top of Form

The Kaiser article quotes research from AARP, based on 2017 statistics, which pegged the Average out-of-pocket costs for Medicare beneficiaries at just over $5,800 annually. That means some people are spending more than one-third of their annual Social Security benefit on health care, based on an average annual benefit of $16,104. Many experts fear that rising out-of-pocket costs could consume up to half the average Social Security benefit by the end of the decade, so any steps to alleviate that pressure would be welcome indeed.

Recommendation #2: Pay for Vision, Hearing and Dental Care

“Millions of older adults can’t afford hearing, vision and dental care — services that traditional Medicare doesn’t cover,” Graham writes. These deficiencies have a negative impact on the quality of life of many seniors, and health care experts worry that untreated problems with vision, hearing, and oral health put millions at increased risk for cognitive decline, social isolation, falls, infections and depression.

Mark Pauly of the Wharton School of Business has a partial answer. “I’d use the money to help pay for these additional benefits, which have proved very popular with Medicare Advantage members,” he told Kaiser’s Graham. Medicare Advantage plans, which are offered by private firms and now cover about 24 million people, usually offer some kind of hearing, vision and dental benefits, the article explains.

The Congressional Budget Office has estimated that vision, hearing and dental coverage could be added to Medicare for an estimated 10-year cost of about $358 billion, says Kaiser.  That’s far less than the projected 10-year cost of Aduhelm, and millions more would benefit.

Recommendation #3: Support Family Caregivers

For another policy recommendation, Graham turned to Harvard geriatrician Dr. Sharon Inouye. She suggested spending that $56 billion to help the nearly 42 million people who provide assistance to older adults trying to age in place at home. “[They] help with shopping, cooking, paying bills and physical care,” Graham writes. “Yet these unpaid caregivers receive little practical support.”

Dr. Inouye suggests “investing in paid services in the home to lessen the burden on unpaid caregivers, especially those tending to people with dementia,” says the article. Funding would pay for more respite care programs to provide short-term breaks for family caregivers, as well as adult day centers where older adults can socialize and engage in activities. “Also,” Graham writes, “she recommends devoting substantial resources to expanding caregiver training and support and paying caregivers stipends to lessen the financial impact of caregiving. For the most part, Medicare doesn’t cover those services.”

Recommendation #4: Strengthen Long-Term Care

Long-term care in the U.S. is in crisis. “Shortages of direct care workers — aides who care for older adults at home and in assisted living facilities, nursing homes, residential facilities and other settings — are a growing problem, made more acute by the coronavirus pandemic,” the Kaiser article warns. Industry research has estimated that, as baby boomers age, millions of direct care jobs will need to be filled.  One policy analyst told Graham that extra dollars are urgently needed in this field. “We could greatly improve the long-term care workforce by paying these workers better and training them better,” she said.

Recommendation #5: Help People Age in Place

“Most older adults want to age in place,” Graham writes, “but many need assistance over time, surveys show. Will they be able to climb the stairs? Cook for themselves? Do the laundry? Take a shower?”  The solution for many seniors can be relatively affordable: better handrails, properly-placed grab bars, better lighting, and improved bathroom fixtures. The big problem for many is that Medicare doesn’t pay for renovations or most home improvements.

Johns Hopkins University pioneered  a program called CAPABLE: Community Aging In Place — Advancing Better Living for Elders. Some experts told Graham that programs like CAPABLE should become a Medicare benefit, available to all 61 million members. “That program combines at-home visits from an occupational therapist and a registered nurse, usually conducted over 10 weeks, with up to $1,300 in services from a handyman,” says the Kaiser article. Evidence shows that CAPABLE helps seniors perform daily activities and stay out of nursing homes.

The average total cost is just $3,000 per person, advocates say. “For less than one infusion of [Aduhelm], you can greatly improve someone’s quality of life and well-being,” one geriatrician said.

Recommendation #6: Find Out what Older Adults Need

The developer of the CAPABLE program, Sarah Szanton of the Johns Hopkins School of Nursing, has a somewhat different recommendation. “She would use $56 billion to assess every older adult annually to ‘figure out what they need to be able to live comfortably and independently,’” she told Graham. From those surveys she would generate what she calls “a list of tailored interventions” suited to each senior’s specific needs. Initiatives that could use extra funding might focus on managing depression, preventing falls or structuring activities for people with dementia, Szanton said.

Recommendation #7: Focus on Prevention

Instead of spending a fortune on drugs with scant benefits, what if some dementia could be prevented? Research suggests that, in many cases, prevention is possible, on a dramatic scale.  A report last August in The Lancet suggests that as many as 40 percent of dementia cases could be prevented (as Kaiser puts it) “if people didn’t drink excessive amounts of alcohol, controlled blood pressure and obesity, managed depression, used hearing aids, stopped smoking, and regularly engaged in exercise, social interactions and cognitively stimulating activities, among other strategies.”

Drexel University dementia expert Laura Gitlin says this is the key. “If I had $56 billion to spend, I’d focus on prevention,” she told Kaiser’s Graham. Another expert, Dr. David Reuben of UCLA, echoed Gitlin’s suggestion. “There is more evidence for these strategies than there is for Aduhelm at the moment,” he stated.

Recommendation #8: Invest in Social Determinants of Health

The Kaiser article’s final recommendation deals with underlying causes of poor health. “The health of older adults is shaped by the environments in which they live, their interactions with other people and how easy it is to fulfill basic needs,” Graham says. This suggests that the best way to improve the health of seniors is to focus on the basics.

Dr. Anthony Joseph Viera of Duke University School of Medicine told Graham he would spend those billions on “transportation for the elderly. Safe housing. Food. Programs that reduce social isolation. Those would end up helping a lot more people.”

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(originally reported at

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