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New analysis suggests that even with rebates, the new Alzheimer’s therapy could have implications for Medicaid drug spending.
Even though Medicaid enrollees account for a small share of people with Alzheimer’s disease, coverage for Aduhelm (aducanumab-avwa) could have to have a large aggregate impact on Medicaid drug spending, according to recent analysis from Kaiser Family Foundation.
Based on analysis of Medicaid drug utilization data, KFF researchers estimate that about 67,000 Medicaid beneficiaries used current drugs for Alzheimer’s. If 25% of these beneficiaries switched to Aduhelm, the total net cost after rebates would be about $720 million per year. The states’ share of spending would be $230 million, and the federal share would be $490 million.
If 75% of these beneficiaries switched to Aduhelm, the total net cost would be more than $2 billion per year. States’ share of spending would be $695 million, and the federal share would be $1.47 billion.
Because of the way the drug rebate program is structured, Medicaid must cover nearly all approved drugs. Applying the 23.1% base rebate for brand drugs to Aduhelm, KFF officials estimate the yearly net price would be about $43,000, instead of the list price of $56,000 set by Biogen. The state Medicaid program and the federal government would share in this rebate.
Additionally, KFF officials point out Medicaid will likely have some responsibility for 12 million enrollees who are dual-eligible. Medicaid provides wrap-around services for many of these beneficiaries.
At the end of June, the Institute for Clinical and Economic Review (ICER) updated its analysis for the drug, stating the price range needed to reach standard cost-effectiveness thresholds is between $3,000 and $8,400 a year, compared with the annual price of $56,000 set by Biogen.
The Centers for Medicare & Medicaid Services (CMS) has begun of review to determine whether Medicare will have a nation policy for Aduhelm, which received FDA approval on June 7. Coverage for Aduhelm could lead to higher premiums for all 56 million Medicare Part B enrollees in traditional Medicare and Medicare Advantage, according to a separate analysis by KFF. As an infusion product, it would be covered under Medicare Part B.
Additionally, several Blues plans have announced they won’t cover the new therapy.