Medicaid Programs Call for Medicare Coverage of Alzheimer’s Drug

The National Association of Medicaid Directors (NAMD) is recommending that CMS approve Medicare coverage for Alzheimer’s disease therapies.

“The outcome of Medicare’s coverage decision for this therapy will have enormous ramifications for the Medicaid program,” the Medicaid directors stressed. “Should Medicare not cover the drug, then Medicaid would become the primary source of coverage for duals and dramatically increase Medicaid spending.”

If Medicare does not cover aducanumab—an Alzheimer’s drug that has received FDA approval—then Medicaid spending could increase by approximately 250 percent nationwide, NAMD experts estimated. Some states could see spending increases of up to 500 percent.

The Medicaid directors urged CMS to implement a national coverage determination that would initiate Medicare coverage of aducanumab.

Alternatively, CMS could cover this drug with a coverage with evidence development (CED) program. Coverage with evidence development allows CMS to approve coverage of an item or procedure when it is being used as part of a clinical study to secure a national coverage determination.

CMS could extend Medicare coverage to aducanumab with a CED. Then, the agency could extend that flexibility to Medicaid programs, the directors suggested.

Payers have supported coverage with evidence development previously, offering this type of strategy as an alternative to the Medicare Coverage of Innovative Technology rule, for example.

Alternatively, CMS could add aducanumab to the restricted coverage list in the Medicaid Drug Rebate program. With this drug included as part of the Medicaid Drug Rebate program, Medicaid programs would have more freedom to decide whether to cover the drug or how much of the cost to cover as more data becomes available.

The Medicaid directors emphasized that the challenge of covering aducanumab is unique to Medicaid and underscores a more pervasive problem with Medicaid drug coverage.

Private health insurers and Medicare have the choice to cover or not cover FDA-approved drugs. However, once a drug is on the Medicaid Drug Rebate program, Medicaid programs have no choice: they must cover it.

In return for mandatory coverage, Medicaid programs are assured the best price for that drug, inflationary rebates, and other rebates off list prices. However, accelerated approval drugs tend to have a higher price tag. Aducanumab, which is an accelerated approval drug, has a starting price of $56,000 per year without a guarantee that the drug is effective.

“These requirements are particularly challenging given the possibility for confirmatory trials to take up to a decade to complete, with no guarantee of improved patient outcomes – and potentially even removal of the drug from the market by the FDA,” the Medicaid directors pointed out.

Although the decision is related to Medicare coverage, the results could have implications for Medicaid programs. If CMS decides not to offer coverage through Medicare, the Medicaid directors argued that the burden would fall on Medicaid programs to cover the costs for dual eligible individuals.

Research from the Alzheimer’s Impact Movement and the Alzheimer’s Association indicated that seniors with Alzheimer’s or other dementias are more likely to be dual-eligible than those without. Nearly three out of every ten seniors with Alzheimer’s or other dementias are also dually eligible (27 percent), while 11 percent of seniors without Alzheimer’s are dual eligible.

Moreover, researchers found that Medicaid spending is 23 times higher for beneficiaries with Alzheimer’s or other dementias than beneficiaries without these conditions, contributing an estimated $59 billion to the overall Medicaid spending trajectory in 2021. Medicaid spending for Alzheimer’s continues to rise and the prevalence of Alzheimer's is also increasing.

NAMD experts argued that increases in Medicaid spending on aducanumab would require some states to cut back spending in other areas.

“This can translate to painful decisions in the form of provider rate reductions, reduced service offerings, or other policy changes to manage spending increases such as significant surge in pharmacy spend,” the Medicaid directors explained.