Medicare’s Policy on Alzheimer’s Drugs Comes Under Fire at House Hearing

— Many on both sides of the aisle expressed concerns

by
Joyce Frieden, Washington Editor, MedPage Today
April 26, 2023

WASHINGTON — House members on both sides of the aisle were in surprising agreement on a number of healthcare issues Wednesday, most notably the need for Medicare to reconsider its coverage decision on amyloid-inhibiting Alzheimer’s drugs such as aducanumab (Aduhelm) and lecanemab (Leqembi).

“There’s been a lot of attention to a decision by CMS [the Centers for Medicare & Medicaid Services] to severely restrict access to an entire class of FDA-approved Alzheimer’s drug treatments,” said Rep. Brett Guthrie (R-Ky.), chair of the House Energy & Commerce Health Subcommittee, at a hearing on legislative solutions to increase healthcare transparency and competition. “One thing I can say both sides absolutely agreed on is that we need to work on the Alzheimer’s drug and make sure that people have access as we move forward.”

“There’s a huge concern here,” Rep. Anna Eshoo (D-Calif.), the committee’s ranking member, told CMS administrator Chiquita Brooks-LaSure, the hearing’s first witness. “This is a progressive disease. We know that early intervention with progressive diseases is really essential. So I hope that you will leave this hearing with a new commitment and a new view of how to do this.”

Accelerated Approval

The FDA approved both aducanumab and lecanemab under an accelerated approval process. However, a congressional investigation found that the agency broke with its own protocols in reviewing and subsequently approving aducanumab by inappropriately collaborating with drugmaker Biogen on briefing documents, holding unreported meetings, and failing to gain internal consensus before engaging in such collaborations. The agency also approved the drug despite it receiving a nearly unanimous thumbs down from an FDA advisory committee.

CMS decided that Medicare would cover aducanumab only when patients taking it were enrolled in clinical trials to further explore efficacy; a similar decision was later made for lecanemab. However, the coverage decision for aducanumab noted that this was in part because the drug’s approval was based on a surrogate endpoint for efficacy: amyloid reduction. Future anti-amyloid drugs that showed clinical efficacy could also be covered if patients were enrolled in a drug registry or other type of trial, the agency said.

In contrast to CMS’s decision, the Department of Veterans Affairs (VA) has approved coverage for lecanemab provided patients meet certain criteria, including being over 65 and having been diagnosed with early-stage Alzheimer’s. Several committee members expressed concern about the conflicting decisions for the drug, which costs about $27,000 annually. “Let me describe to you two constituents: one is a grandfather and a veteran,” said Eshoo. “He has coverage and has been diagnosed [with Alzheimer’s]. His wife was also diagnosed; she’s not a veteran [and isn’t covered for the drug]. How do I — or any of us — explain that to our constituents?”

Brooks-LaSure said that part of the issue was the fact that both drugs were approved on an accelerated approval basis rather than full approval. “When FDA fully approves drugs, that means that the FDA has made a determination that it will affect the disease itself,” she said. “And when FDA fully approves drugs for Alzheimer’s disease, CMS will cover it more broadly.”

Support for Physician-Owned Hospitals

Committee members also had other issues that concerned them. Rep. Michael Burgess, MD, (R-Texas) discussed a bill he is sponsoring to get rid of Medicare’s prohibition on paying for services delivered at physician-owned hospitals. “It is just fundamentally wrong that because of an academic degree that I have, I am not able to engage in a lawful practice in this country,” he said to Brooks-LaSure. “And yet, you brought up in your testimony that consolidation in healthcare allows hospitals to own doctors. This is nuts. Hospitals can own doctors, but doctors can’t own hospitals. Why is that OK?”

He asked Brooks-LaSure if she’d be willing to work with him on the issue; she agreed to do so.

Pharmacy benefit management (PBM) companies also came in for scrutiny at the hearing. One bill under consideration calls for more transparency in the way PBMs determine how drugs get on their formularies. “This is a bipartisan issue; this is a nonpartisan issue,” said Rep. Buddy Carter (R-Ga.), a pharmacist. “I never went to the counter and asked, ‘Are you a Republican or a Democrat?’ High drug prices impact everyone here in America, all Americans, that’s why we have to do something about it.” He noted that 45 independent retail pharmacies are going out of business every year, “largely because of policies of PBMs.”

Kristin Bass, chief policy and external affairs officer at the Pharmaceutical Care Management Association, which represents PBMs, agreed that “the data people can use to lower costs can be transparent. Where we have a slight quibble is, for example, in federal bidding for contracts, you don’t have bidders bid openly; you make them sealed bids so people will bid as low as possible to get the business … That’s what we have concerns about. Just with respect to competitors knowing what the best bid is, that would be the problem.”

Site-Neutral Payment Spotlighted

The subcommittee is also considering a bill to institute “site-neutral payment,” in which Medicare would pay the same amount for particular procedures regardless of whether they’re performed in a physician’s office or hospital outpatient department. “Hospitals are motivated to gobble up physician practices because they’re able to bill Medicare roughly double the amount that private practices are,” said Rep. Mariannette Miller-Meeks, MD, (R-Iowa). “For example, a level 2 nerve injection in 2023 done in a physician’s office would result in a $226 payment for Medicare, but that same injection provided by a hospital outpatient department would result in a $741 payment.”

Ashley Thompson, senior vice president of public policy analysis and development at the American Hospital Association, said there was “nothing neutral” about site-neutral payment policies and that there were reasons for giving hospital outpatient departments higher reimbursement. “Hospital outpatient departments treat patients who are often older, sicker, and with more complex conditions … and they’re required to maintain standby capacity, as well as deliver emergency care regardless of insurance status.”

But Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, said that hospitals buying up physician practices and then being able to charge more for the same service “unambiguously leads to high prices for consumers … and lower quality of care.”

“We need to stop digging the hole deeper,” he said. “Medicare rates are intended to reflect the cost of providing services from efficient providers. As such, Medicare should not be paying more for services provided in hospital outpatient departments.”