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A pressing concern looms over the growing U.S. aging population as Alzheimer's patients face potential exclusion from treatments due to the exorbitant costs of new dementia medications.
With nearly 60 million people over the age of 65 in this country, or 17 percent of the population, this is an urgent concern. An estimated 7 million people in this country grapple with dementia as of 2020, with experts projecting that number will grow to 9 million by 2030, and 12 million people by 2040.
For example, in Chicago, 13 percent of the population is over 65, with more than 350,000 in this group.
The debate over the financial coverage for the expensive new drug, Lecanemab, has stoked the belief in the need to prioritize value and equity to foster health and well-being in society.
Drawing on extensive experience in organizational and health services research, the methodological approach of a recent study on Lecanemab's cost-effectiveness is compelling. The study evaluated the drug's value using a comprehensive analysis that included the cost of necessary testing to identify patients with genetic characteristics that influenced the success of the treatment, and accounted for caregiver-related costs.
The conclusion was that despite the manufacturer's promise of value-based pricing, the drug's current market price of $26,500 per year was unsustainable. The average Social Security Administration monthly payment to eligible retired persons over age 65 was $1,525 per month—or $18,300 per year—in 2023.
Given that a 2019 study showed "11.1% of all Medicare fee-for-service beneficiaries had claims with a diagnosis of Alzheimer's disease or a related dementia," this current price point would pose a significant financial sustainability challenge for the Centers for Medicare & Medicaid Services (CMS). The study suggested that the drug would only be cost-effective at a price below $5,100 annually.
The CMS launched the Guiding an Improved Dementia Experience (GUIDE) Model July 1, to improve the quality of life for people with dementia and support their caregivers. This model aims to keep individuals in their homes and communities through comprehensive, coordinated care, receiving mixed reactions of enthusiasm and skepticism.
This is critical because the U.S. health care system is already strained, and adding expensive drugs necessitating costly screenings could exacerbate this situation. The COVID-19 pandemic has further highlighted how system pressures can deepen disparities in access to quality care.
Should CMS respond to the incremental financial pressure by restricting coverage or increasing Medicare premiums, the economic burden for individuals living with dementia and their caregivers would intensify, disproportionately affecting vulnerable groups.
Additionally, the efficacy study leading to the drug's FDA approval primarily included participants who do not represent the most at-risk segments of the Medicare population, raising concerns about the accessibility and affordability of such treatments for those most in need. At minimum, evaluating the cost-effectiveness of Lecanemab across different socio-economic groups using a comprehensive costing methodology is critical to ensuring its benefits are universally accessible.
This situation underscores the urgent need for economically sustainable health care practices that do not compromise equity. The prohibitive cost of new treatments and the unequal distribution of resources risk limiting access to essential care, especially for marginalized communities.
While recognizing the complexity of drug pricing and the importance of incentivizing innovation, it is clear that costs arising from other phases of care delivery (such as diagnostics) can undermine the long-term viability and accessibility of new treatments. A strategic approach to health care delivery that assesses costs and outcomes comprehensively is essential to ensure that treatments like Lecanemab are made available to all patients.
Attaining this goal requires grounding the incentives in the health care system in value-based payment systems and engaging all stakeholders in enhancing outcomes related to brain health. It calls for a comprehensive approach to health, spanning from health promotion and early screening to diagnosis, treatment, management, and palliative care. At the same time, it is important to acknowledge the role of resources often overlooked in cost-effectiveness analyses.
Insurance providers are critical in designing payment models that drive reductions in direct costs for patients and guarantee access to essential diagnostic, care, and support services. Policymakers, health care professionals, providers and administrators, as well as funders need to embrace a value-driven, equity-centered approach, weighing clinical benefits against potential risks to facilitate access to groundbreaking treatments.
Improving the quality of brain health care in the U.S. demands a coordinated effort from the entire health care ecosystem, necessitating concessions from various stakeholders committed to endorsing equitable and sustainable health care practices. Such dedication is crucial to guarantee that everyone with cognitive issues receives the necessary care, setting the stage for a more sustainable and promising health care system.
All patients must have access to appropriate and effective medical care no matter who they are, where they live, or how much they can afford to pay. It is the ethical and fair thing to do.
Lidia Moura, MD, PhD, MPH, is a clinical neurologist at Massachusetts General Hospital and associate professor of Neurology at Harvard Medical, director of the Center for Value-based Healthcare and Sciences with Massachusetts General Hospital and a Public Voices Fellow through The OpEd Project.
Susanna Gallani, PhD, is the Tai Family associate professor of business administration in the Accounting and Management Unit at Harvard Business School.
The views expressed in this article are the writers' own.
