Neurology, Psychiatry Drugs Absent from Initial Medicare Price Negotiations

by Staff Writer
August 29, 2023 at 1:05 PM UTC

The federal government has revealed the first medications for Medicare price negotiations, encompassing costly drugs, while some treatments for neurodegenerative diseases are notably absent.

Clinical Relevance: For now, the cost of drugs under Medicare used to treat neurological and psychiatric conditions remains high

  • Federal government announces list of medications for Medicare price negotiations, targeting expensive drugs.
  • Notably missing are treatments for neurodegenerative diseases like Alzheimer’s and MS, despite their high cost.
  • Drug companies are pushing back against the Medicare negotiation program through legal action, citing the Fifth amendment.

The federal government has announced the first 10 medications subject to price negotiations with Medicare as part of the Inflation Reduction Act passed in 2022. 

“Medicare drug price negotiation will result in lower out-of-pocket costs for seniors and will save money for American taxpayers,” said a statement from the White House. “Negotiations for the first group of selected drugs will begin in 2023, with negotiated prices going into effect in 2026.”

The initial list includes some of the costliest medicines on the market, resulting in billions of dollars in Medicare spending. The majority of the drugs consist of blood thinners or medications used to treat diabetes. The list also includes one drug each for rheumatoid arthritis, a blood cancer, psoriasis, and Crohn’s disease. 

Notably missing from the list? Drugs used to treat neurological or psychiatric diseases, including Alzheimer’s, even though they are some of the most expensive prescription drugs covered by Medicare. 

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Pricey Neurological and Psychiatric Drugs

  • Zolgensma. This gene therapy for spinal muscular atrophy carries a whopping one-time price tag of $2.1 million for a course of treatment. A recent National Institutes of Health study referred to it as “the most expensive drug ever sold,” but also noted it is very effective for the small population diagnosed with this rare disease. Medicare Part B covers Zolgensma, which includes drugs administered in a doctor’s office or hospital. However, the coverage and costs may depend on the state where the treatment is received.
  • Mavenclad. Used to treat relapsing forms of multiple sclerosis, a neurological disorder that affects the central nervous system, the drug costs $99,500 for a course of treatment that lasts two years. Medicare Part D coverage and costs differ by plan. Some plans have lower copays or coinsurance for this drug than others.
  • Spravato (intranasal esketamine). A nasal spray for treatment-resistant depression, for a condition that does not respond to standard antidepressants. It carries a cost of $4,720 to $6,785 per month, or $56,640 to $81,420 per year. This is excluding the administering physician’s time and other associated fees. Although also covered by Medicare Part D, some plans require prior authorization or limit usage. 
  • Aduhelm. The newly approved drug for mild cognitive impairment, or early Alzheimer’s disease, aims to reduce amyloid plaques in the brain. Currently, Medicare only covers Aduhelm for those enrolled in a qualifying clinical trial. It was first projected to have an annual cost of $56,000 per person, but Biogen recently slashed the price in half, citing low demand. And some providers won’t administer it due to ongoing safety concerns. 
  • Lequembi. Another new drug for early Alzheimer’s disease that also targets amyloid plaques in the brain, it has an annual cost of $26,500 per patient. However, the total cost of treatment could be much higher, as patients must undergo genetic tests, frequent brain scans, and safety monitoring. The FDA recently granted traditional approval to Leqembi, so Medicare will cover it for all indicated populations. That is, patients with mild cognitive impairment or mild dementia with confirmed amyloid plaques.

Future Plans

The federal government may choose to negotiate pricing for neurological and psychiatric drugs at a later date. The White House statement said that over the next four years, Medicare will negotiate prices for up to 60 drugs covered under Medicare Part D and Part B, and up to an additional 20 drugs every year after that.

Drug companies are pushing back. At least half a dozen have taken the government to court to block the Medicare negotiation program. According to the New York Times, the industry’s main trade group and the U.S. Chamber of Commerce have also filed suit, citing the Fifth amendment’s prohibition on the taking of private property for public use without just compensation.

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