Medical breakthrough poses thorny policy questions

Sometimes, good news comes with complications. In this case, KFF Health News reported on a breakthrough drug that slows the progression of Alzheimer's. Apparently, the average cost to US taxpayers (most patients who could use the drugs would likely be on Medicare or Medicaid) could run over $82,000, with almost $27,000 of that being the cost of just the drug (other costs include genetic tests and frequent brain scans). Additionally, the drug does not actually cure or even prevent Alzheimer's, just slow its progression (in one study, an average of five months over an eighteen month period). Given the cost and the incremental benefit near the end of patients' lives, is paying for this treatment the best use of Medicare and Medicaid funds?

For family members who are taking care of these patients, they might feel that Medicare and Medicaid should absolutely cover this treatment. However, if many patients take this drug, would the Centers for Medicare & Medicaid Services (CMS) need to divert funds from elsewhere that might save other lives? Policy researchers often try to answer questions like these by using a concept known as quality-adjusted life year (QALY for short). Probably using QALY analysis, one institute suggests that the treatment might be cost-effective if it cost around $10,000 to $20,000 per year.

For now, rollout of this treatment seems to be gated by the availability of specialists who can manage the medication. Additionally, CMS is requiring that patients on Medicare and Medicaid who take this medication be entered into a registry to track their clinical outcomes in hopes of better understanding the efficacy of the medication.