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Medicare's Alzheimer's math is fuzzy -- but critics are missing the bigger picture

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The Biden administration recently warned that Medicare could spend $3.5 billion on a new category of Alzheimer's drugs in 2025 alone – a figure vastly higher than what experts in the field predict – leading many to question the math.

Medicare estimates for Alzheimer's treatments: ©ipopba - stock.adobe.com

Medicare estimates for Alzheimer's treatments: ©ipopba - stock.adobe.com

The Biden administration recently warned that Medicare could spend $3.5 billion on a new category of Alzheimer's drugs in 2025 alone – a figure vastly higher than what experts in the field predict – leading many to question the math.

The experts are right to be skeptical. But they're also missing the bigger picture.

Many are still framing this spending on Alzheimer's treatments as a cost and a new one at that. Instead, we should look at this spending as an investment and recognize the extensive costs and burden Alzheimer’s exacts on the people afflicted, their caregivers and families, and the losses to society overall.

Slowing the progression of a debilitating, fatal disease in its earliest stages extends the time when disease is least intrusive, lessens the need for care assistance, and prevents greater spending down the road.

Despite recent scientific progress, the administration continues to add to the hurdles and delays patients and caregivers face as they battle this dreadful disease. The administration seems to justify doing so by pointing to cost estimates.

Medicare's sky-high estimate ignores the true costs and existential threat that Alzheimer's poses not only to patients and caregivers' lives, but to the federal budget. The agency likely ignores this piece of the puzzle because these costs are borne by the families and not Medicare or other insurers, but they are no less real or costly.

Direct treatment and long-term care costs for people living with Alzheimer's is projected to reach $360 billion this year. Medicare and Medicaid cover just over 60% of that, the rest -- $91 billion -- comes out of patients' pockets. That figure doesn't include the immense costs involved outside the medical system in caring for patients. This year alone, more than 11 million Americans will provide 18 billion hours of unpaid care, valued at $350 billion. Many caregivers will scale back working hours or drop out of the labor force entirely – leading to losses in family income for families least able to afford it and tens of billions in foregone economic productivity and tax revenue.

And that's just the 2024 tab.

The reality of a shift of costs to the medical system exists for any other debilitating disease once innovation equips us with options to slow progression and ultimately prevent the damage. And now, we finally have treatments that can slow Alzheimer's progression.

Eisai, the manufacturer of one such treatment, Leqembi, recently told investors – in official documents where the company has a legal obligation to be as accurate as possible – that it projects steady, but slower product uptake in 2025, and $1.3 billion combined across North and South America markets from spring 2026 to 2027.

However, Medicare is projecting nearly three times the spending -- just in the U.S., and just next year -- that Eisai forecasts for the entire Western hemisphere, across public and private insurers, over multiple years.

Considering that a mere 2,000 Americans are taking the drug, for Medicare's estimate to be accurate, this number would have to grow by over 6,000% in the coming year.

Medicare is also assuming that another treatment, donanemab, will be approved by the FDA and patients will have access immediately. But the review process has faced several delays, including a pending Advisory Committee Review – for which FDA has not yet announced a date. And even if approved, sales aren't likely to impress as Medicare placed unprecedented restrictions on all drugs in this class and will only cover these therapies if doctors participate in a government-approved data registry, adding yet another barrier that will slow patients, caregivers, and providers' embrace of treatments.

For the more than 2,000 people who progress beyond the effective treatment window each day, their caregivers, and families, expanding access to new therapies is a matter of life and death.

And while we may not agree on the math, we should all agree that giving patients and their caregivers more meaningful time is invaluable.

Marvell Adams Jr. is the Chief Executive Officer of Caregiver Action Network and Ken Thorpe is the Chair of Partnership to Fight Chronic Disease.

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