Medicare spending on single Alzheimer’s drug to hit $3.5 billion next year, CMS projects

Medicare spending for a single Alzheimer’s drug called Leqembi is expected to reach $3.5 billion in 2025, according to a Centers for Medicare and Medicaid Services (CMS) document first obtained by healthcare news outlet Stat.

The drug’s cost could strain Medicare’s budget and translate to higher premiums for beneficiaries, Julia Cave Arbanas, a research project manager at UCLA Health, said in a statement. Most of the 6 million people in the US with Alzheimer’s are on Medicare since most the disease tends to affect those who are 65 and older, according to nonprofit health policy research firm the Commonwealth Fund.

“I think CMS’s estimates demonstrate an incredible demand for Alzheimer’s treatments and possibly suggest broader use than I think was originally conceived,” Ameet Sarpatwari, an assistant professor of medicine at Harvard Medical School, told Stat. “That raises the question: What are we, as taxpayers, willing to spend on this drug with limited resources?”

CMS clarified that the $3.5 billion estimate includes the costs associated with receiving Leqembi, such as doctor office visits and diagnostic testing, Stat reported. But, according to Stat, even without those costs, spending on the drug alone would still be around $3 billion.

CMS declined to comment.

Leqembi, made by Japanese drugmaker Eisai and sold in a partnership with Massachusetts-based drugmaker Biogen, has a $26,500 annual list price, according to health policy research firm KFF. The FDA approved the drug in July 2023.

Prior to the drug’s approval, experts anticipated Leqembi would significantly raise Medicare costs. Researchers at UCLA Health projected in May 2023 that Leqembi would cost Medicare $2 billion to $5 billion annually.

The CMS projections on the cost of Leqembi are higher than what Eisai projects it will make from the drug’s sales. The company said in March it expects to make around $1.3 billion from Leqembi in North and South America between 2026 and 2027, Stat reported.

Eisai declined to comment further on the matter and Biogen didn’t return Healthcare Brew’s request for comment.