A group of pricey breakthrough prescription drugs are poised to shake up the market this year — including an Alzheimer’s treatment that could be approved today by the FDA.
Why it matters: Though the drugs offer hope to patients with hard-to-treat conditions like Alzheimer’s or sickle cell disease, or who struggle with obesity, their potentially eye-popping prices are sure to create dilemmas for insurers, government programs and patients themselves.
The big picture: The approvals could fuel already-contentious debates around affordability and equity, giving ammunition both to those who say innovation doesn’t come cheap and others who contend medical advances are meaningless if patients can’t access them.
- Although some of the drugs could be transformative, “they will create choices that need to be made and they will also create potential burdens, particularly on the most vulnerable, on people who are the least well-insured and people who live in states or happen to have insurance coverage that is the least generous,” said Rena Conti, a professor at Boston University’s Questrom School of Business.
- None of the drugs would be subject to the price controls that congressional Democrats included in the Inflation Reduction Act.
Driving the news: The FDA is expected to today decide whether to approve Eisai and Biogen’s lecanemab, a treatment for Alzheimer’s disease, setting into motion another round of debate over how much the drug should cost and whether Medicare should cover it.
- It would become the second FDA-approved Alzheimer’s treatment targeting amyloid plaques that are believed to contribute to the development of the disease. But it isn’t likely to cause as much controversy as Biogen’s Aduhelm did when it was approved in 2021.
- Biogen initially priced that drug at $56,000 a year, drawing outrage from critics and presenting big questions about how Medicare could absorb the large spending spike if millions of beneficiaries tried to get it.
- If lecanemab is approved, experts will be closely watching both its list price and whether the FDA limits its use to subgroups of Alzheimer’s patients. Both factors will be crucial in determining potential spending on the drug.
- A cost-effective price would be between $8,500 and $20,600 a year, the Institute for Clinical and Economic Review said last month.
State of play: The drug pipeline is brimming with other experimental cures that could make headlines this year.
- Data for another promising Alzheimer’s treatment by Eli Lilly that is similar to lecanemab is expected midyear, per a recent Cowen research note, and Medicare will almost certainly have to revisit its coverage policy for the entire class of drugs.
- Several multi-million dollar gene therapies have already been approved. But this year the pipeline includes two treatments for sickle cell disease, which has a much larger patient population.
- Clinical trial results for Eli Lilly’s obesity drug candidate are also expected in April, potentially ushering a new entrant to what could become a booming market. Disputes over coverage of obesity drugs already on the market will almost certainty continue.
Between the lines: Some novel drugs present an inherent dilemma: They’re worth a lot of money because of the way they can dramatically improve patients’ lives. Even so, manufacturers can still price these drugs well above what experts say they’re worth.
- Gene therapies may cost millions per patient. Other drugs could cost much less per course, but cater to enormous patient populations or may require long-term use.
- In any scenario, the expense could present complex problems to federal and state health programs, private insurers and patients who wind up on the hook for out-of-pocket costs.
- “We’re fortunate there are so many treatments in the pipeline that promise to transform the quality of care for people with devastating diseases. While we recognize there are concerns about cost, the facts point to a health care system that can sustain this incredible innovation over the long haul,” said Priscilla VanderVeer, vice president of public affairs at PhRMA.
Yes, but: The final cost burden hinges on several factors, starting with where manufacturers set the launch price.