Breaking Value-Based Care: Why a New Drug has the Potential to Undermine Recent Efforts to Lower Healthcare Costs

  • Published on:
  • August 24, 2021

Dear Colleagues, 

Like me, many of you have been closely monitoring the circumstances surrounding Aduhelm (aducanumab), the medication recently approved by the FDA under a cloud of suspicion. There are so many questions about the condition this drug targets, the evidence of efficacy of the drug, the manner in which it was approved, and finally – and of great concern to me – the value proposition for patients and the US health system.  

Aduhelm was approved by the FDA on June 7, 2021 for treatment of Alzheimer’s disease through their accelerated approval pathway that requires “meaningful therapeutic advantage over existing treatments” for “serious or life-threatening illnesses”. This was in stark contrast to the near-unanimous decision (one member voted “uncertain”) of the FDA’s advisory committee to advise against recommending Aduhelm. As a result of the approval, three members of that committee resigned in protest. 

A review of the clinical evidence is troubling. To summarize, in three separate randomized clinical trials of Aduhelm (which largely left out minority patients, leading to even bigger questions on the potential for harm vs benefit for these vulnerable populations), only one demonstrated a modest impact, and this was in individuals with mild cognitive impairment, not those with more advanced forms of Alzheimer’s dementia. The drug did not demonstrate a clinical benefit, rather it was approved based on a surrogate measure for a clinical endpoint – in this case, reduction of amyloid beta plaques, a condition that is not definitively linked to Alzheimer’s disease progression. And then there were the side effects of micro-hemorrhages in the brain in as many as one-third of trial participants. The potential for this medication to positively impact the quality of life of patients with dementia seems questionable at best. 

Then there’s the cost. The annual price tag for Aduhelm is estimated at $56,000. This is just the cost of the medication itself, not the additional costs of administration (via IV infusion) or monitoring for side effects (including imaging to detect possible bleeding in the brain, at an estimated cost of $30,000 per year). And since the treatment is not curative, the costs are ongoing for as long as the medication is prescribed. For a patient with Medicare Part B, the co-insurance for the drug alone is projected to be over $11,000 per year.  While Medicare Part D (which provides coverage for many other medications) has a catastrophic out of pocket (OOP) spending threshold currently set at just over $6,500 per year, there is no OOP max for Part B. Even for those Medicare beneficiaries with a supplemental insurance like Medigap, we can expect to see these costs passed along in the form of increased premiums. The real potential for financial harm (in addition to the possible side effects described above) will have to be weighed against slim evidence of potential benefit for patients. 

According to some estimates, Aduhelm by itself could come to represent one percent of all health spending by 2028, and cost Medicare up to $56B annually (noted as greater than the entire annual budget of the NIH). Pragmatically, the National Association of Medicaid Directors is recommending that CMS confer coverage, either full, restricted, or under the evidence development program. If Medicare does not cover Aduhelm, Medicaid would become the primary source of coverage for individuals with dual eligibility, taking a significant toll on state budgets that are required to be balanced each year, and likely resulting in cuts to other public and social services. There are so many other, more effective ways we could spend those taxpayer dollars to improve health outcomes. 

The response from industry has been swift. At least half a dozen commercial health plans, including several Blues plans, have signaled their intent to deny coverage for Aduhelm, deeming it “investigational” or “experimental.” Major health systems like the Cleveland Clinic and Mount Sinai have also affirmed their opposition to the drug, citing lack of evidence of benefit to patients, and the Department of Veterans Affairs similarly declined to include Aduhelm on its formulary. And yet we hear that other pharmaceutical companies are gearing up to pursue similar pathways for their new drugs. 

While the initial FDA approval indicated broad application of the drug, a scaled back recommendation issued on July 8, 2021 recommends the drug only be offered to individuals with “mild memory issues,” although it does not prohibit prescribing for more severe cases. After much sustained public opposition, Acting FDA Commissioner Janet Woodcock ordered a complete investigation by the Office of the Inspector General, but it is uncertain if the FDA has ever reversed an approval, absent clear evidence of fraud. Furthermore, Acting Commissioner Woodcock’s appointment could expire later in August, leaving unanswered questions about who will carry this issue forward at the FDA. 

What is next? The FDA gave Biogen nine years to submit confirmatory studies. Nine years in which the exorbitant price tag of this questionable therapeutic can wreak havoc on the budgets of Federal and State programs, as well as accountable care and other risk bearing organizations, reinsurers, and, critically, some of our most vulnerable citizens.  

At present, coverage for Aduhelm is subject to approval by regional Medicare Administrative Contractors. On July 12, CMS opened a National Coverage Determination (NCD) analysis to determine whether a national coverage policy will be issued. Public comments were collected until August 11 and will be collected again once the NCD is posted. In terms of coverage alternatives, I am intrigued by comments in recent JAMA Viewpoint that offers some possible value-based pathways, including one that ties ongoing or even conditional payment for the drug to demonstrated benefit. Risk-bearing entities will want to examine and weigh in on such proposals as they continue to emerge. 

ACLC Members, I urge you to add your voice to the conversation – make a public comment, follow and contribute to the ongoing discussion. There is much at stake for anyone who is at risk for total cost of care or Medicare Part B expenditures for a population of patients – not only financially, but also in the challenge that may lie ahead in educating and negotiating with patients over a treatment that has raised hopes but has, so far, failed to meaningfully demonstrate that it positively impacts the course of this devastating disease or even improves clinical outcomes or quality of life for those affected. I understand that clinicians across the country are already fielding calls from patients asking about this drug. For many, Aduhelm offers false hope and the potential for substantial health and financial consequences. 

Warm Regards,   
Eric Weaver, DHA, MHA, FACHE, FACMPE  
Executive Director, ACLC