Weighing the risks and benefits of new Alzheimer's treatment
Newly approved drugs present a number of different risks to patients, healthcare providers and pharmaceutical companies as well. This paper is intended to provide a broad overview of the risks within the healthcare, senior living and life sciences space as a new drug is brought to patients. In this paper we explore the risk concepts associated with new drug approval through the lens of Lequmbi.
Worldwide, 55 million people are living with Alzheimer’s and other dementias. In July 2023 a new drug, Leqembi, received full approval from the Food and Drug Administration based on a double -blind phase 3 clinical trial known as the Clarity AD trial. The trial demonstrated that Leqembi can slow the rate of cognitive decline by 2% in people who suffer with mild Alzheimer’s dementia and or related impairment.
Lecanemab (Leqembi) is an antibody intravenous treatment that targets and removes beta amyloid from the brain and reduces cognitive and functional decline in people living with early Alzheimer’s. While Leqembi is not a cure, it slows the progression of Alzheimer’s allowing patients to have more time to participate in daily life and to live independently.
Leqembi manufacturers Eisai and Biogen priced the drug at $26,500 for a year’s supply and the FDA approval made the drug eligible for Medicare coverage, under certain conditions.
When a Medicare beneficiary is prescribed Leqembi, three criteria must be met for Medicare reimbursement. The criteria are:
Medicaid can also cover Leqembi when it is appropriately prescribed and does not require doctor participation in a CED registry.
Experts at the Alzheimer’s Association note that Leqembi treatment can have a very significant cost of about $70,000. However, over 90% of Medicare beneficiaries will pay little to nothing for Leqembi treatment because of a supplement policy when combined with Medicaid or a Medicare advantage plan that covers most of the out of -pocket cost with fewer than 10% of Medicare beneficiaries paying the full 20% cost share.
A person’s geographic location may not have the number and type of specialist for CED participation leaving them unable to successfully access the drug.
Out of pocket expenses for Medicare beneficiaries after the patient reaches their Part B deductible will be 20% of the treatment cost or around $5,300.
Reimbursement is a key component of a life sciences company’s financial performance. Failure to obtain reimbursement as expected can lead to poor results and missing market expectations.
Pharmaceutical companies typically submit a reimbursement dossier to pricing committees or HTA bodies when new product is launched to establish pricing and reimbursement. The dossier contains the scientific evidence that supports the drug’s value proposition. The committees then evaluate the dossier to assess the drug’s cost-effectiveness, therapeutic benefits, societal value and budget impact.
Next, companies and payors negotiate, and a decision is made on reimbursement levels. Reimbursement rates for drugs are usually calculated as a percentage of drug’s acquisition cost. The amount of reimbursement depends on the medicine and the reimbursement entitlements granted. There are three reimbursement categories: basic, lower special and higher special.
Pharmaceutical manufacturers also use rebates to improve price negotiations, ensure prescription medication affordability and lower overall costs. To be eligible for Medicaid payments, pharmaceutical companies must have a national rebate agreement with the Secretary of Health and Human Services. Companies with these agreements must also submit certain drug pricing information to CMS, including monthly and quarterly AMP data.
Medical teams must monitor those taking Leqembi to assess for side effects such as:
Physicians who prescribe Leqembi must be familiar with the prescribing information and medication boxed warnings and make care and prescribing decisions considering the unique patient diagnosis and characteristics.
Some of the prescribing risks are:
Specific prescribing risk with medications like Leqembi require access to prescribing information, clinical trial data and marketing surveillance reports. Physicians should always consult reliable sources and regulatory authorities and their patients when prescribing new medications.
While Leqembi may allow people with Alzheimer’s to have more time to participate in daily life and live independently. Patients and family members should work closely with their physicians to develop an Alzheimer’s treatment plan including weighing the benefits and risk of all approved medications and therapies.
Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
