U.S. prescription drug spending will jump at least 8% by the mid-2020s as a controversial new Alzheimer’s disease drug hits the market, a new analysis finds.
The intravenous drug aducanumab, marketed under the name Aduhelm, will comprise more than 1% of all national health spending by the mid-2020s, according to the report released Wednesday by the not-for-profit research group Altarum. It will grow non-retail drug spending—those administered in hospitals or clinics—by at least 25%.
“Any single intervention like this that has that kind of effect is going to attract a lot of attention,” said George Miller, the report’s lead author and an institute fellow with Altarum. “It’s a lot of money.”
Alatrum’s estimates are conservative because they assume one million patients will use the drug by the mid-2020s, which is the low end of the estimated population with mild cases of Alzheimer’s disease, about 16% of the total Alzheimer’s population. Miller said one of his co-authors thought the report was too conservative and should have assumed more people will take the drug.
Doubling the uptake to 2 million people—the higher end of the manufacturer’s target population—has Aduhelm comprising 2.5% of national health spending and driving up non-retail drug spending by more than 50%, Altarum found.
The Food and Drug Administration’s June 7 approval of the new drug triggered widespread criticism because of its questionable efficacy and high annual price of $56,000 per patient, which will primarily be picked up by Medicare Part B. The drug’s manufacturer, Biogen, tested it on patients with mild cognitive impairment, but the FDA approved its use more widely for more than 6 million Americans diagnosed with Alzheimer’s.
Biogen has said it will continue to study the drug over the coming 9 years to confirm it works. In the meantime, it will keep selling it. Miller said he thinks physicians and insurance companies will get a lot of pressure from patients, their families and advocacy groups to prescribe and pay for the drug.
“You have limited evidence of effectiveness on the one hand and people desperate for something on the other,” Miller said. “So there is this feeling that it’s likely to divert a lot of costs from more useful kinds of interventions.”
Three members of an FDA advisory panel have resigned over the drug’s approval. The agency’s green light came despite none of the advisory panel’s 11 members deeming it fit for approval.
Altarum cautioned that its numbers are “highly uncertain” but give a sense for the magnitude of the drug’s impact on healthcare costs. The report also noted that its findings concern only the drug itself, and don’t include associated costs like facility fees at infusion sites, Medicare payments to prescribing physicians and testing patients for eligibility and side effects.
Altarum’s report finds estimates $14.6 billion in spending on Aduhelm this year, growing to $45.3 billion in 2022 and up to $73.6 billion in 2028. Under those totals, Aduhelm would comprise 2.5%, 6.9% and 7.8% of total U.S. drug spending, respectively. Those numbers rely on the more conservative 1 million users assumption.
Retail drugs, those patients buy themselves at pharmacies, comprised about 65% of total drug spending in 2020. Non-retail drugs delivered in hospitals and clinics made up a smaller share of total drug spending: 34.6% last year. Altarum’s data estimate that adding Aduhelm into the mix will increase non-retail drug’s share of total spending to 40.2% in 2028.
On Wednesday, the consumer advocacy group Public Citizen called for the immediate resignation of FDA Acting Commissioner Janet Woodcock and two other officials closest to the decision in a letter to HHS Secretary Xavier Becerra. Public Citizen said the FDA should have rejected the drug and required another large, placebo-controlled clinical trial.
“Approving aducanumab despite the lack of evidence of effectiveness has raised false hope for millions of Alzheimer’s disease patients and threatens to bankrupt the Medicare program because of the drug’s exorbitant price ($56,000 per year),” the group said.
Altarum’s analysis compared the advent of Aduhelm to the blockbuster hepatitis C treatments released in late 2013 and 2014. Retail prescription drug spending grew only 2.2% in 2013, but spiked 13.5% in 2014, largely because of Sovaldi, released in December 2013, and Harvoni, released in October 2014.
However, by 2016, the growth rate had dropped to 1.7% because the drugs are only administered once per patient until that person is cured of the disease. The hepatitis C drugs significantly improve the lives of those patients, and they make up for at least some of their high price by cutting spending on future disease treatment.
Aduhelm, by contrast, will be used repeatedly throughout patients’ lifetimes until either the patient or physician decide to stop treatment.
The limited evidence the drug works raises the question of whether the added spending is justified, Altarum said.
“Money spent on Aduhelm is money not available to spend on other care or supports for those with Alzheimer’s and their families,” the report said. “As Medicare will bear most of the cost, it is money not available to fund other types of health care, to fund federal government priorities outside of healthcare, or to reduce the federal deficit.”