Week in Washington is brought to you by Michael Cohen, PhD. Tune in each week to read the latest on healthcare policy and get a glimpse of what’s on the horizon.
Week in Washington
FDA Approves Alzheimer’s Drug
The big news this week is the FDA’s approval of the first Alzheimer’s drug (Adulcanumab, also referred to as Aduhelm) in nearly two decades, although the decision was highly controversial. The controversy stems from two separate issues. The first is that there is a significant dispute about the effectiveness of the drug (The FDA’s Advisory Committee voted that the drug did not demonstrate effectiveness). The second is the price. Biogen priced the drug at $56,000. Since the drug is maintenance rather than curative (i.e., individuals would undergo regular doctor-administered infusions as part of chronic treatment). A few key details on considerations going forward:
Cost: The Alzheimer’s drug will cost $4,312 per infusion or about $56,000 for an annual maintenance dose.
Population: The drug is targeted to the 6 million people with AD. Additional populations may also be targeted (up to 18 million as it could include individuals with MCI)
Label: The drug label use is fairly broad (see here)
Total Expected Cost: While difficult to predict, the aggregate cost in the tens of billions (if not higher) is distinctly possible. I’d recommend this JAMA article on the topic. Several commentator’s estimated costs around $100 billion annually
Medicare: Aduhelm will likely be covered under Medicare Part B, given that it is a physician-administered medication. However, CMS may opt for a National Coverage Determination, which could put limits on its usage. About 2 million Medicare beneficiaries currently use available Alzheimer’s treatments. If just 25% of those people who currently use Alzheimer’s treatment drugs used Aduhelm, the cost would be about $29 billion annually. In context, all spending on drugs covered by Medicare Part B was $37 billion in 2019. It is unlikely to impact Medicare Advantage plans until at least 2023.
Medicaid: There are additional Medicaid implications since Medicaid pays Part B premiums for low-income Medicare beneficiaries as well as coinsurance for those with dual coverage. Since Part B premiums are set at 25% of annual Part B expenditures, large increases in Part B premiums could lead to large Medicaid spending increases.
CMS: Regulations Coming
Two key regulations arrived at OMB recently. An ACA targeted regulation that likely includes changes to some 2022 issues like Healthcare.gov use fees as well as other changes. The second is requirements related to the Surprise Billing Act, which would have implications for the entire fully insured market. Both are expected to be released in the coming weeks.
US Inflation levels in April hit 13-year highs
The Consumer Price Index (CPI) hit 0.8% in April. Price increases have been concentrated on durable goods (e.g., used cars). There continues to be disagreement among economists as to the extent to which the inflation increases now portend continued inflationary pressures later in the year. If there are large inflationary pressures (specifically if they exceed wage gains), it could reduce relative spending on non-essential services.
Good/Bad news on the COVID variant (Delta). The new variant has been shown to have greater transmissibility and potential for immune escape; however, there is growing data that a two-dose regime of the mRNA vaccines provides significant protection.
Kid Vaccine timeline – Pfizer and Moderna provided updates on expected timelines for COVID vaccines for kids. The expectation for both is vaccines will be submitted for FDA approval for children younger than 12 in the fall.
6/04/2021: Week in Washington
5/27/2021: Week in Washington
5/20/2021: Week in Washington
5/13/2021: Week in Washington