5 Questions: Kevin Schulman on whether taxpayers should pay for controversial new Alzheimer’s drug

The Food and Drug Administration has approved a new and expensive medication for Alzheimer’s disease, but it’s not clear it helps. Researcher Kevin Schulman discusses what the government should consider before deciding to cover it.

- By Laurie Flynn

Kevin Schulman

The Food and Drug Administration’s June 7 approval of aducanumab, for Alzheimer’s disease, set off a firestorm of controversy over the drug’s effectiveness — and its price. The FDA’s independent advisory committee recommended against approving the drug because of concerns about its effectiveness, but the FDA took the unusual step of overriding the committee’s decision. A month after it approved the drug, the FDA restricted its use — another rare move — and limited it to those with early or mild cases of the disease.

Substantial disagreement lingers over payment for the drug — which Biogen, its developer, plans to sell under the brand name Aduhelm for $56,000 for a yearlong regimen — and whether Medicare should pick up the tab, given many scientists believe it’s largely ineffective and has significant safety concerns.

In an article published July 19 in JAMA, Kevin Schulman, MD, professor of medicine and a director of the Clinical Excellence Research Center, or CERC, at Stanford; Michael Greicius, MD, professor of neurology and neurological sciences; and CERC visiting scholar Barak Richman, JD, examine what’s at stake for regulators, payers and patients. Schulman spoke with CERC writer Laurie Flynn about the controversy regarding the drug’s efficacy, safety and cost.

1. What are the clinical results of the aducanumab trials?

Schulman: Michael, Barak and I looked deeply into the clinical trial results and the statistical issues that were brought to the advisory committee. Not many of the underlying trial design and analysis issues have been covered in the lay press, and we felt we had the opportunity to provide some transparency on these data.

There were two clinical trials. When a pre-specified combined analysis of the trials was performed, it was found there was no benefit to the drug, and the study was stopped for futility. Biogen then looked at the two trials individually and found a benefit in the highest dose in one of the trials: a very modest slowing in the rate of cognitive decline compared with the placebo arm. The other, identical trial showed no benefit with the same dose. Interestingly, the two studies’ placebo groups had different rates of decline, so it’s not clear if the benefit arose from aducanumab or from a more rapid deterioration in the placebo patients. Furthermore, aducanumab is not without risk: Brain swelling or microhemorrhages occurred in as many as 40% of trial participants.

In the end, the FDA approved the drug not based on the clinical results, which it said left “residual uncertainties regarding clinical benefit,” but based on a measured reduction in a biomarker — amyloid plaques in the brain. While amyloid is associated with Alzheimer’s disease, it’s not clear if amyloid is the origin of this devastating disease or a marker of some other destructive process occurring with the nerve cells. No trials of drugs to decrease amyloid have resulted in a cognitive improvement for patients.

2. You write that sometimes the responsibilities of the Centers for Medicare and Medicaid Services require limiting or declining what the FDA approves. What is the right approach to making such difficult decisions, particularly with such a widespread and debilitating disease as Alzheimer’s?

Schulman: There’s no question that Alzheimer’s is a horrific medical condition. Michael and I have treated a lot of patients with this disease, and it would be very exciting to offer patients effective treatment options. But with all the controversies surrounding science today, it’s important that the medical community be transparent about the facts, the risks and benefits of therapies, and whether there’s an opportunity for improvement. We know that patients really want hope, but we also caution in the paper that false hope could have even graver consequences for patients and their families.

We didn’t dwell on the FDA approval; instead, we questioned whether CMS should pay for this medication. Alzheimer’s is a disease of aging, so reimbursement is mostly through Medicare and, for many of the most severely impacted, Medicaid. CMS’s responsibility is different from that of the FDA: CMS has to determine if this therapy should be considered a covered benefit, and under what conditions and for which population. The legal criteria for what can be considered a benefit under Medicare is set in statute: reasonable and necessary. FDA approval is a minimum threshold for determining whether something is a reasonable and necessary treatment, but it’s not the sole criterion for CMS.

CMS has to be a patient advocate, addressing what is right for patients, which is challenging in this case, given the risks of this therapy and the FDA determination that there were “residual uncertainties” about its benefit. CMS also has to be an advocate for the other Medicare beneficiaries and the general public to make sure the drugs they cover have a proven effectiveness.

3. With most Alzheimer’s patients on Medicare, that means part of the cost of the drug would be paid for by taxpayers. What impact would this have?

Schulman: My mother always said she paid for her Medicare benefit since she paid Medicare payroll taxes. Unfortunately, that’s not entirely true. Medicare payroll taxes support the Medicare hospital benefit, or Medicare Part A. I had to explain to her that her taxes went mostly to support people enrolled in the system when she paid the taxes, and that after she retired, I paid for her Medicare hospital insurance through my Medicare payroll taxes.

In terms of aducanumab, it’s an infusion medication administered in the outpatient setting. It would be considered part of the medical benefit, or Part B. This part of the benefit is funded mostly (74%) through general tax revenues, not payroll taxes. If CMS adds aducanumab as a benefit, we’ll all pay for the medication through our federal income taxes.

In our analysis, we calculated the per capita spending that could occur if Medicare decides to pay for it. If all the Alzheimer’s patients with mild cognitive impairment receive this drug, it would cost every American $211 annually. In my family with four children, we’d be paying $1,266 a year for therapy that has no proven benefit.

4. What do you see are some possible intermediate solutions?

Schulman: In health policy circles we often talk about moving from fee-for-service to fee-for-value, and in writing this paper we tried to consider fee-for-value as an approach for reimbursement for this drug. But we also wrote of the challenges of assessing benefit based on the clinical trial results. Another idea is to give patients an opportunity to try this medicine to see if they benefit, but again it’s not clear whether we can measure benefit to an individual patient. The data from the clinical trials don’t support more traditional measures of value, such as showing clinical improvement in cognition or meaningful change in being able to participate in activities.

By law, Medicare is not allowed to negotiate prices with manufacturers. This could be a circumstance when Congress decides it’s time to lift that restriction — either by giving CMS the opportunity to negotiate price directly with the manufacturer or based on some of the criteria we outline in the paper, such as a value-based model with a conditional payment program. In that scenario, patients undergo therapy for a fixed amount of time but then treatment would be discontinued if there were no objective signs of improvement or if the disease progressed. If there’s a reluctance to allow CMS to negotiate directly over price for an approved product, we suggest that CMS can cover this therapy only in the context of clinical trials, and that maybe Congress could let CMS negotiate the price of products used in clinical trials, which would make this a very narrow exception.

5. The chief science officer of the Alzheimer’s Association, along with other vocal supporters of the drug’s approval, argue that it’s better to offer something patients can try now instead of making them wait for years. What are the drawbacks to taking this approach?

Schulman: We don’t have inside information, but one wonders how Biogen came to justify a price of $56,000 for a product that, at best, results in a modest slowing in the decline in patients’ cognitive status. Biogen knows, together with the Alzheimer’s Association, how devastating this disease is and, frankly, how insensitive to price Alzheimer’s patients and their families would be for an approved product even if its benefits are minimal.

The idea that patients with life-threatening conditions can be risk-seeking in treatment choices, overvaluing benefits and undervaluing risks, comes out of Stanford work in behavioral economics. Under these conditions, patients don’t consider cost in treatment decisions, and it makes them vulnerable to exploitative marketing and pricing strategies by pharmaceutical manufacturers.

But this is not solely a price story. If this new product came to market at a $1 a day, there would still be concerns about the safety and efficacy of this therapy for patients with Alzheimer’s disease.

About Stanford Medicine

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