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Alzheimer’s drugs’ lofty expectations hinge on US health plan coverage

Marc Archambault, a 70-year-old resident of South Kingstown, RI, received his first intravenous infusion of Aduhelm, in 2021. Medicare restricted coverage this year for Aduhelm, after US regulators approved it.Jessica Rinaldi/Globe Staff

Wall Street is betting that Alzheimer’s treatments in development will yield billions of dollars in sales after an experimental treatment from Biogen Inc. and Eisai Co. slowed the course of the brain disease in a large trial. But those fortunes still hinge on the US Medicare program’s assessment of the treatment’s impact.

Positive findings announced late Tuesday for Biogen and Eisai’s lecanemab were the first time a drug yielded such a clear result in slowing memory-wasting Alzheimer’s. That could open up a new, lucrative market for those companies and others developing similar products, including Eli Lilly & Co. and Roche Holding AG. Bloomberg Intelligence analyst Sam Fazeli estimated the opportunity for Alzheimer’s therapies at $10 billion to $70 billion.


But Medicare restricted coverage this year for a similar drug, Biogen’s Aduhelm, after US regulators approved it; some analysts suggested the same thing could happen again. Lecanemab’s results aren’t a “slam dunk” for getting Medicare reimbursement, wrote Ami Fadia of Needham & Company. BMO Capital Markets Evan David Seigerman had a more positive outlook, telling clients that it’s “highly unlikely that Medicare would be able to withhold coverage” for a drug that slowed patients’ decline in a large trial.

Medicare covers 64 million US seniors and people with disabilities, including most of the US population with Alzheimer’s. When Aduhelm was approved, Biogen estimated that 1 to 2 million Americans might qualify for it. The initial price was set at $56,000 a year, and covering a million patients at that price would cost $56 billion annually. That’s more than the total $37 billion spent on all drugs through Medicare Part B, which covers medications doctors administer, like infusions.

Biogen later cut the price in half, but the sticker shock remained. Anticipating the potential costs, Medicare raised the premiums people pay for the program by 15% going into 2022. About half of the increase — roughly $11 a month — was driven by the expected cost of Aduhelm.


After the approval, Medicare officials said that the data supporting the use of Aduhelm is inconclusive, and the drug would only be paid for when used in clinical trials. That let Medicare unwind part of the increase. Just Tuesday, President Joe Biden boasted about a rare Medicare premium cut, a boon for seniors heading into election season.

Aduhelm was approved under an accelerated pathway, used to promote availability of therapies for serious diseases with few treatments. But data on the new drug, lecanemab, appear persuasive enough that the drug would likely win full Food and Drug Administration approval, analysts said.

Advocates for wider coverage of Alzheimer’s drugs argue they will extend patients’ lives and avert costly nursing home and hospital stays. Medicare and other purchasers of health care may decide that effective therapies are worth high prices if they provide patients real benefits and reduce spending on other types of care.

But lecanemab and its successors aren’t Alzheimer’s cures. Their aim, for now, is to slow — not even halt — patients’ brain-wasting. Lecanemab’s clinical benefit “could be called into question,” Graig Suvannavejh of Mizuho Securities USA wrote.

In April, when Medicare officials revealed their decision to limit coverage of Aduhelm to patients in clinical trials, the policy applied to the entire category of drugs: monoclonal antibodies that target the protein amyloid for Alzheimer’s. They said the decision showed a clear pathway for coverage for drugs that prove they benefit patients and indicated that drugs that get the full approval of the FDA would be covered. Billions are riding on whether lecanemab will meet that bar