Alzheimer's Drug Leqembi Offers Hope With a $5B Yearly Price Tag

In July of this year, the FDA granted traditional approval to leqembi (lecanemab, Eisai/Biogen.) As the first new drug for the treatment of early Alzheimer’s disease with confirmation of elevated amyloid beta, it offers hope to the more than 6 million Americans diagnosed with Alzheimer’s dementia. 

But an earlier cost analysis suggests that this hope will carry a hefty price tag. The study, published shortly before the drug received full approval, projected that using lecanemab for only 10 percent of Medicare beneficiaries with early-stage Alzheimer’s disease would swell spending by $56.5 billion per year.

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Cost Projections

The research, conducted at UCLA, RAND Corporation, and Harvard University, uses data from the 2018 Health and Retirement Study to model Medicare spending including the coverage of  leqembi. The spending estimates are based on a simulation model using the records of over 10,000 Medicare beneficiaries.

The modeling estimates included both the direct costs of the drug, projected at $24 billion annually, as well as $32.4 billion in associated expenses for diagnosing and monitoring patients, including PET scans, MRI scans, and clinical visits . This represents nearly one-fifth of Medicare’s entire current prescription drug budget. 

Per patient, a leqembi prescription in and of itself would cost $19,500 per year, the study speculated. Additionally, average out-of-pocket costs for leqembi and required testing could reach nearly $11,000 annually. Out-of-pocket costs were estimated assuming Part D cost-sharing requirements and no supplemental coverage.

“The budgetary effects of Medicare coverage for lecanemab could be substantial, both for the Medicare program and for beneficiaries personally,” the researchers wrote. “… policy discussions regarding long-term affordability and access for Medicare beneficiaries will be needed.”

Sensitivity analyses found consistent results even when varying the model assumptions. Study limitations include uncertainty about real-world clinical guidelines and uptake. The researchers said that measures like negotiating drug prices and capping out-of-pocket costs may help. Medicare could pay for lecanemab but limit use to patients most likely to benefit, an approach called “indication-specific pricing.” The government could also structure financial incentives to reward overall dementia care rather than just drug spending.

Advancing Treatment

Leqembi was approved based on Phase 3 trial results showing it could significantly slow cognitive decline in early Alzheimer’s disease. This intravenous medication targets and clears amyloid beta, a protein that builds up in the brains of Alzheimer’s patients. In a Phase 3 clinical trial, leqembi slowed cognitive decline by 27 percent over 18 months.

Though considered modest, this effect represents a new treatment pathway and important advance for a disease with few effective options. While not a cure, some experts believe it is the first drug to meaningfully change the course of Alzheimer’s. 

Leqembi won’t help every patient. The benefits were confined to those in the early stages of the disease. Serious side effects included brain swelling and bleeding. Still, in a field accustomed to failure, many Alzheimer’s experts are optimistic about building on this advance. 

Alzheimer’s is already an expensive condition. According to a study published in the Annals of Internal Medicine, the lifetime individual cost estimate of caring for someone with Alzheimer’s is $357,297. At the macro level, Alzheimer’s and other dementias cost the US $355 billion in 2021.