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Could Cost Billions

The new Alzheimer's disease drug from Biogen has a list price of $56,000 a year, which means that if it is covered by Medicare, it could cost the US government billions of dollars, NBC News reports.

The Food and Drug Administration controversially approved aducanumab, Biogen's Aduhelm, earlier this month. An outside advisory panel to the FDA said there was not enough data indicating the drug worked and recommended against approval, and the agency's decision to approval the drug under its accelerated approval pathway has led three members of the panel to resign.

But whether or not the drug is effective, if it is "widely prescribed, it could have an overwhelming impact on Medicare's budget," the New York Times says, noting that Medicare covers most of the 6 million US adults with Alzheimer's disease. In an analysis, the Kaiser Family Foundation estimates that the cost to Medicare could be $29 billion a year if 500,000 people receive the treatment – that's more, the Times notes, than the US spends on NASA – and even reach $57 billion if 1 million people receive the treatment. According to NBC News, Biogen estimates 1.5 million people may be eligible for its drug.

NBC News also reports that, depending on whether they have supplemental insurance, the cost to patients could run $11,500 a year.

"It's in many ways a version of other drug pricing and FDA debates we've had over the last several years, but it turns the knobs up to 10," Washington University in St. Louis' Rachel Sachs tells NBC News. "You have the perfect storm of a drug where there's questions about whether it's effective at all, the patient population is very broad, and there's a potential here to spend a very large amount of not just taxpayer dollars, but also seniors' dollars."