What are the Implications of the Approval of Aduhelm (Aducanumab) to the US Healthcare System?

In this episode we continue our discussion of the implications of the approval of Aducanumab. Our guest this week is Professor Nicholas Bagley. Bagley is a professor of law at the University of Michigan Law School and a contributing writer to the Atlantic. Recently he wrote an article titled “The Drug that Could Break American Health Care” that discusses some of the broader (unintended) consequences of the approval of Aducanumab. In this episode we discuss some of the broader cost implications of the new drug.

PRODUCER’S NOTE:  Since the recording of this interview, Medicare officials have announced the largest ever dollar-amount rate hike for Part B coverage citing the need to build contingency reserves to potentially cover the Alzheimer’s drug, Aduhelm. Prof. Bagley discusses the concern of the cost of Adulhelm to the US Healthcare System in this Minding Memory episode.   

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Podcast Transcript

Matt Davis:

In our last episode with Jason Karlawish and Ken Langa, we discussed the approval of aducanumab bythe FDA. And we got into some of the history surrounding medications to treat Alzheimer's disease in general that got us to where we are today. We're going to continue the discussion and now turn to what the approval of aducanumab might mean for state and federal governments, as well as older adults living with dementia, particularly when it comes to cost. I'm Matt Davis.

Donovan Maust:

And I'm Donovan Maust.

Matt Davis: 

You're listening to Minding Memory, a podcast devoted to exploring research on Alzheimer's disease and other related dimensions.

We're joined today by Professor Nicholas Bagley. He is a professor at the University of Michigan Law School, where he teaches administrative law, regulatory theory, and health law. Professor Bagley previously worked in the US Department of Justice and is a prolific writer. He's written extensively on issues related to the Affordable Care Act. His work has been published in the Harvard Law Review, the Columbia Law Review, the Georgetown Law Journal, and the New England Journal of Medicine, to name a few. He is also a regular contributor to the Atlantic. A fun fact about Professor Bagley is that before he became a lawyer, he taught eighth grade English in Teach for America. My partner, who is a middle school science teacher, will definitely appreciate that. In my opinion, if you can teach middle schoolers, you can do anything. Nick, welcome to the podcast.

Nicholas Bagley:

Thanks for having me on. I'm really happy to be here.

Matt Davis:

Recently, Nick coauthored an article with Rachel Sachs that appeared in The Atlantic titled The Drug That Could Break American Healthcare. What an excellent title. The article discussed the approval of aducanumab and brings to light some potential downstream economic effects, as well as some of the legal/policy issues in regard to how drugs get adopted here in the US.

First, just to get something out of the way. Nick, what exactly does an administrative lawyer do?

Nicholas Bagley:

That's a good question. So administrative lawyers are primarily interested in the ways that administrative agencies, so like the FDA or the EPA, carry out their responsibilities. What law governs what they can do. How do the courts think about overseeing the work of agencies? How do we make sure that agencies can do their jobs on the one hand, but protect individual rights on the other? And make sure that they follow the law as written, as opposed to what they'd most prefer to do. So that's the meat and potatoes of what administrative lawyers do. We study agencies.

Matt Davis:                     

How did you find your way into health related issues?

Nicholas Bagley: 

It's one of those long and convoluted stories. I didn't really intend ever to land here. When I took a job with the University of Michigan, I explained to the folk who were on the hiring committee that I was pretty interested in healthcare because it seemed to me like we had a couple of very big federal agencies, the institutions that run Medicare and Medicaid, that administrative lawyers, for variety of reasons, didn't do a whole lot of writing about. And so I thought there was an opportunity to marry my interest in administrative law with a nascent interest in healthcare.

So when I got to the University of Michigan, they gave me the offer and they said, "Great. You're teaching health law." And I thought, I should probably learn something about it, then. And I taught the class. And right around that same time, the Affordable Care Act had been adopted in 2010, and it was starting to be implemented by the Obama administration. And a lot of its implementation choices raised legal questions. And some of those legal questions were straight up admin law questions, and it turned out I had a little bit of expertise that I could offer. So I started writing publicly about it, I focused a lot of my academic work on the question, and it snowballed from there.

Matt Davis:                     

We've got plenty of problems in healthcare. So I think we'll keep you busy for a long time.

Nicholas Bagley:

There's infinite work. I tell my students that if they ever just want to have consistent regular work, look to healthcare.

Donovan Maust:   

What exciting times in healthcare. So if we shift to the topic of aducanumab, which now has been around long enough, I can kind of say it. Can you walk us through the steps in your article where you outline what the cost implications are from the individual patient level all the way up to, let's say, the federal government? And the steps in between.

Nicholas Bagley: 

Yeah, I'm happy to do it. So the first and most important thing to notice about the drug is that it is, of course, for a patient population that is overwhelmingly over the age of 65. And in the United States, that means that Medicare, and to a lesser extent, Medicaid are the payers that are going to be on the hook for paying the $56,000 a year prescription cost. And the most important thing to notice right out of the gate, what that means is that taxpayers are really bearing the burden of paying for this drug. Mostly, the costs are going to be borne by all of us, and we're going to either have to pay for that either by increasing the amount we pay in taxes or by taking on more debt than we otherwise would. Which, of course, is a bill that will eventually come due.

But the effects aren't just for the taxpayer. The effects for individual seniors are a little more complicated, but that actually can be quite tough as well. Medicare, it's vaunted as great insurance, but it turns out it's pretty patchy in important respects. The most important way in which it's patchy is that under Medicare part B, which is what's going to pay for this drug, you're responsible for covering 20% of the co-insurance costs. That's just a fancy way of saying that you're on the hook for one fifth of all spending that you incur under Medicare part B.

Now, most people don't see that because they've got employer wraparound coverage or a Medigap plan. But some people don't have plans like that. And for those people who actually just have to pay that cost out of pocket, aducanumab is going to cost them more than $10,000 a year, more than $11,000 a year. And that's on top of all the costs that might be associated with the additional screenings that you're going to need to undergo in order to make sure we can identify side effects when they crop up. Part B premiums partly reflect the costs of care. So those are going to go up as a result of aducanumab. Probably not much for any given individual, but when you're living on a fixed budget, every little bit can be a bit of a burden.

Beyond that, Medicaid programs are the payers that step in when people are Medicare eligible, but they don't have enough money to cover, say, the co-insurance costs. So Medicaid, of course, is a joint state federal program where states bear a lot of the costs. For people who are dually eligible for Medicare and Medicaid, well, it's the states that are going to have to pick up some of the costs of covering the new drug. Although the state's costs are going to be a lot lower than the federal government's costs, they're really a secondary payer in this context, states have real problems budgeting for this kind of thing because they can't deficit spend.

That means that state budgets are going to be squeezed, and they really don't have much of a choice except to raise taxes or to cut spending elsewhere. They can't take on debt. That means that, like we saw for the approval of the hepatitis C drugs a bunch of years ago, state budgets are going to put policymakers into a bit of a bind. And we're going to likely see decreases in state spending associated with increases on this new drug. Even though, of course, we don't have good evidence that it works, much less than it's worth spending all this money on.

Matt Davis:

This is a tiny bit of a digression, but how is it that this is covered through part B instead of part D?

Nicholas Bagley:

That's a great question. So part D was added in 2003. And that's mainly to cover prescription drugs for people who are Medicare eligible. So if you're getting your statins, you go to the drug store, you pick them up there, and Medicare part D pays for those. The way it works is you buy a prescription drug plan, and the prescription drug plan negotiates for the best prices they can get for the Medicare part D drug that you might get at the pharmacy.

Part B drugs are those that are administered in basically a clinic, usually. So they're actually administered in an institutional setting. They're not administered at home. And when you have a drug like that, you think of chemotherapy drugs fit into this category, they're a big part of part B spending. This is actually, it's an infusion drug. You're going to get it done at a clinic, you're not going to do it at your house, and therefore, it's covered under part B. That matters in part because there's no mechanism for negotiating prices under Medicare part B. Medicare is just a payer. It pays pretty much whatever the pharma companies demand.

The normal ways that you might get some price discipline when it comes to a prescription drug, whether that's under part D or part B, is through negotiation. You have a health insurance company that says, "I'm not going to cover your drug unless you cut the price." Well, Medicare can't do that. It's prohibited by law from doing that. That means this $56,000 price is going to come due whenever a physician prescribes this drug.

Matt Davis: 

It's also not just the $56,000, right? There's other indirect spending.

Nicholas Bagley: 

It's a lot of indirect spending because you're going to have to go get a couple of MRIs every year, at least. You might need to get PET scans in order to see if you've got amyloid. Although that's in a bit of a limbo state at the moment because Medicare, at least right now, says it won't pay for PET scans connected with Alzheimer's. That may change. Not to mention just the doctor's visits and the follow-up and all the other indirect costs associated with it. It's going to be a lot more than $56,000 a year per patient.

Matt Davis:                     

And that's the monitor. So you're monitoring all the potential side effects and the treatments.

Nicholas Bagley: 

For those side effects. A shocking number of people develop side effects on this drug. You guys know this better than I do. Most of them don't end up having very serious adverse consequences, but some of them do so.

Matt Davis:                     

In your article, you make some striking cost estimates for the country. Could you talk about that a little bit?

Nicholas Bagley: 

Yeah. So one of the tricky things is trying to figure out what the patient population is here. Alzheimer's is, and again, you guys know this better than I do, but it's a big patient population. We estimate about 6 million people in the country have Alzheimer's. If a third of people were to get prescribed the drug, you're talking about direct costs in excess of $112 billion a year. To put that figure in perspective, in 2020, Medicare spent about $90 billion on all of its part D drugs. So you'd be spending more on a single drug than we spend on all prescription medications for all seniors across the entire country by a lot.

Matt Davis:                     

Some of which actually work.

Nicholas Bagley: 

Some of which actually work. Now, the folk who look closely at the market think it's unlikely it's going to be that big. The estimates I've heard are something on the order of $26 billion a year. But that's still more than... I want to get this exactly right. But I'm pretty sure that's more than, or at least very comparable to, the full amount that we currently spend on all other part B drugs. Some of which, of course, do actually work. So these are eye-popping numbers for a single drug. It's especially eye-popping because we've got crap evidence that it does anything.

Matt Davis:                     

One of the things that you point out in your article is... It's obvious to me to some degree, but the way you pointed it out so well in your article was this disconnect between the process here in America, where we evaluate how well a drug works through the FDA, and then it finds its way into being adopted into insurance plans and those types of things. But we don't ever really, when we're evaluating these drugs, really consider the cost to society. I thought that was interesting. Could you talk about that a little bit?

Nicholas Bagley: 

Yeah, I'd be happy to. So you want to separate out two questions. FDA reviews drugs to ask whether they're safe and effective for their intended use. That's a useful question to ask as a gating decision for deciding whether or not you want a drug to be available on the market. If it's not effective, we don't want people wasting their money on it. It's not safe, we certainly don't want it to be sold. But FDA doesn't actually take costs into account. When drugs weren't that expensive 30, 40, 50 years ago, that made a lot of sense. Safe and effective and let the market work it out. Well, the market doesn't work very well in healthcare for all sorts of reasons. But it doesn't work at all when it comes to Medicare, which is a public program.

Back in 1965 when we adopted Medicare, there was a deal with a medical establishment that was cut that said basically, look, we're going to pay for healthcare, but we're not going to place any constraints on what doctors do. The reason for this is pretty straightforward. Patients and doctors alike don't really like the federal government telling them what to do or interfering in the practice of medicine. If there's a good therapy that is widely accepted in the medical community, or even accepted by a minority of the medical community, well, that's up to the medical community. It's not up to the federal government to decide. And so Medicare is just going to be a passive payer.

That passivity, again, makes sense when you're not spending a lot on healthcare. But it's much more of a problem when you start getting into tough value propositions, like this new drug, where you might want to say, look, the drug is safe and effective in the sense that we know it's safe-ish and we know it might work. But it's not been shown to be good value at $56,000 a year. Maybe you would spend a couple of bucks on it. Maybe you'd say, "Well, why the hell not?" Alzheimer's really is truly terrible. Maybe you'd spend even a couple of thousand dollars on it. But $56,000 for every single person who's prescribed the drug seems wildly out of proportion, given the good evidence that it doesn't do much, even if it does have some marginal effect.

The way we describe it in the article is to say that in the United States, our decisions about drug approval and our decisions about how to pay for drugs are linked. They're treated as if they were one and the same, but they don't need to be and they really shouldn't be. In most countries, the drug approval decision is kept separate from the choice about how much to pay for that drug. That's a much more sensible approach. You can ask questions about value that are a different question than whether the drug is safe and effective.

Matt Davis:                     

So is it guaranteed that this drug will eventually... Where it is right now in the process and where people can start prescribing it in Medicare, where are we at in terms of the timeline?

Nicholas Bagley: 

So it's been approved by the FDA, and Medicare has to make a determination about exactly what it's going to pay for. That payment decision is one that's... They've instituted a process called a national coverage determination. These are pretty rare administrative processes that Medicare uses for certain very controversial or high profile interventions. What it does is say, "Look, we want input and thoughts about whether or not we, as Medicare, as a payer, ought to pay for this particular intervention." Usually it's for treatments. So they'll do a national coverage determination on getting a colonoscopy, like how often, like which of these colonoscopies are we're going to pay for. Urologists can be a little trigger happy when it comes to scheduling colonoscopies because they're procedures, you get paid every time. Maybe we should introduce some price restraints in here by saying, "Hey, if it's a repeat colonoscopy within a decade of getting a clear one, we're not going to cover that." That's the kind of thing that national coverage determination would normally do.

As to Aduhelm, Medicare is going to have to decide whether or not it wants to restrict access to the drug to particular patient populations or to people with certain kinds of biomarkers associated with early stage Alzheimer's or whatever. Part of the challenge here is figuring out if we are going to cover this drug at all, what's the right patient population for that? It's a little tricky because the theory of the drug's operation is that it targets amyloid, which of course. Exists both early in the course of Alzheimer's and also late in the course [00:16:30] of Alzheimer's. And so if you take the mechanism of, if you think that getting rid of amyloid is likely to cause some cognitive improvement, at least in theory, it's plausibly the kind of drug you could prescribe throughout the life cycle for Alzheimer's.

FDA, after it initially approved the drug for all Alzheimer's patients, issued a renewed label that included this very strange squirrely language about how it should only be, not that it couldn't be, but that it should only be prescribed to people with early stage Alzheimer's. And so there's some reason to think that maybe Medicare will only pay for it if you can fit within that category. How exactly you define early stage Alzheimer's is not entirely clear to me, and maybe Medicare is going to figure out some way of doing that.

I also think it's important to notice that as soon as you say, "We're going to pay for early stage Alzheimer's," there's going to be a real incentive for clinicians to find a lot of people with early stage Alzheimer's. So this isn't a fixed population where you just have a scarlet A on your forehead. It's a population where the clinical signs are elusive, where it's not always clear who's got it. And there's going to be some effort to market to people to get them to lean on their doctors to prescribe this drug. So it goes back to that question about what's the size of the patient population here? I think everybody's guessing.

Matt Davis:                     

So if we can touch on that just a minute, the idea of incentives for the clinicians here. So if I write [00:18:00] a prescription for citalopram, I don't receive any cut on the top of that. The way this medication is paid for, however, that's not the case. Can you explain that just a little bit, the incentives there?

Nicholas Bagley: 

This is one of the hardest things to explain, only because it sounds so preposterous that it couldn't possibly be true, but it is true. Under part B, physicians are reimbursed 6% of the average sales price of a drug that they prescribe. So every chemotherapy drug that's prescribed under part B, you're getting a 6% cut. Now, clinicians often don't see that directly. Often it's their practice group that takes in that money and then it's distributed out. And so you'll hear clinicians say, "Oh, I don't get paid like that." But that's, in fact, just not true. When you do the billing, you are getting paid for that. And of course, your physician group is going to have incentives to make sure that clinicians are doing their utmost to maximize that 6%... Let's call it what it is. It's a kickback. That encourages clinicians to prescribe more expensive medications.

Now, not all clinicians fall prey to that incentive. Many will still prescribe drugs that are older and off patent that are proven and effective. But nonetheless, the incentives push that direction. For every principle doctor out there who's saying, "Hey, I'm going to push back and I'm going to go with older, cheaper, tried and true medications," there are a bunch of others that are perfectly happy to open up aducanumab clinics that are specifically designed to get people onto this drug that they persuade themselves is going to help them. And if a physician is getting a 6% kickback on $56,000, it means every time you prescribe this drug, every time, you're getting paid $3,360. That's a big incentive, especially if you can pull 10 patients through a day and pull down an extra $30,000. Then just multiply that over the course of the year. It's a really toxic set of incentives for clinicians.

Matt Davis:                     

And so the cost for Medicare, in addition to paying for MRIs and maybe PET scans and all the other stuff, is this additional 6% on top of the $56,000, right?

Nicholas Bagley: 

The additional 6% on top of the $56,000. They call it a stocking fee. The idea is that it costs you something to keep these drugs in stock.

Donovan Maust:

I was going to ask, has that always been a part of part B? And is the idea that this has to be delivered in an infusion center, so you're helping pay for the cost of running the infrastructure of this place? Is that the idea?

Nicholas Bagley: 

That's the justification for it. It's been in place for a very long time. I think since the beginning, but I'd have to go back and double check to be sure. It's been a target over both the Obama and the Trump administrations have some efforts to make changes. Because I think everybody realizes that a 6% kickback keyed to the drug's price is a really bad way to set up incentives. You don't want clinicians making choices to prescribe that are informed by which drug is most expensive. You want them to be asking, which drug is most effective? And sometimes that'll be the more expensive drug, but often it won't be. But as soon as the centers for Medicare and Medicaid services start moving in the direction of maybe trying to get at the 6% kickback, oncologists in particular, but clinicians [00:21:30] in general mobilized to defeat it. They don't want that particular gravy train to stop. And it's an understandable set of incentives, but it is, I think, quite toxic.

Matt Davis:                     

And thinking about and reading your article and other articles that have been coming out, it's strikes me as surprising in a country where politically, there's a whole party largely devoted to controlling government spending and taxation and focused on a lot of things around that over the years, how something like this could sneak its way through, and with major cost implications, and go unnoticed. It just strikes me as an interesting phenomenon here in the country.

Nicholas Bagley: 

Well, I think it's important to notice the way that rhetoric and practice diverge. So I think it's fair to say that Republicans as a party have been pretty zealous about trying to reduce the tax burdens on people. That's absolutely true. And they talk a big game when it comes to controlling entitlement spending, and at times have really made that a centerpiece of their public messaging. But the fact of the matter is that when push comes to shove, it's rarely in a politician's self-interest to make targeted cuts that come out of the flesh of people who are well organized in their districts.

So if you're a member of Congress, you have a big hospital in your district. You might have a couple of big hospitals in your district. And whether you're a Republican or you're a Democrat, some of your biggest supporters are likely to be doctors. And they're going to tell you how if you make this change, they're no longer going to be able to maintain their practices. And of course, it's true. If you built your practice on the back of a certain set of payment structures and you change those structures, you're going to have to change your practice. That's actually the point. We want you to change your practice because what you're doing is wasteful. But people really don't like change and disruption and they really don't like losing money. And so the diffused costs, the federal budget over time with this kind of insane payment approach, they just get overlooked. They're just not a priority.

Donovan Maust:

It always seems like healthcare is off the table, coupled with spending.

Matt Davis:

Rationing. Rationing.

Nicholas Bagley:

You want to be a little careful because there have been efforts. For example, you know, clinicians are familiar with diagnostic related groups. For somebody that comes in for a hospital stay, you don't get paid as a hospital for every intervention you do. You get paid for the condition that the person presents with. That means that there's a fixed amount of money on the table for the hospital. And that is a hospital incentive to say to clinicians, "Hey, don't do more than you need to. Just get the person fixed. But if you spend more, we don't make more. You should spend less." And that had dramatic effects on lengths of patient's stay, on the intensity of care provided in the hospital setting.

That change in Medicare was only adopted in 1983, and it was adopted under a Republican president. And I think most people think that that's the kind of cost conscious decision that Medicare really needs. So there have been efforts to cut back on Medicare spending from time to time. But by and large, with that one exception, they've been pretty ineffective. Part of the question is, how long can we keep the party going this way?

One of the things that's been quite striking to me about the debate of aducanumab is how muted the Congressional response has been. I think health policy experts to a person, from the pinko lefties to the libertarian righties, are appalled at what's happened, both the FDA's approval decision, but then also the implications for the federal budget. And you'd think that Congress would be pretty happy to take this on. Because gosh, they've been fighting a fight against pharma companies, or at least rhetorically fighting that fight, for some years now. Both Republicans and Democrats think we got to do something. But what you've heard is pretty much deafening silence.

I think people are really, they don't want to tell Alzheimer's patients and their families that what FDA, in a half-baked way, but what FDA says might be effective as is not going to be available to them. You don't win points for running against people with dementia.

Matt Davis:

Do you have any thoughts about how to improve the process?

Nicholas Bagley:

Yeah. So I think we need to introduce some consideration of value into how we pay for drugs in this country. As soon as they say that, you're going to get people out there saying, "Rationing," or "You're going to deny people life saving therapies." That's not at all what I'm saying. So I think it's important to take a step back and realize what I am saying, which is, there are a lot of drugs out there that confer sizable benefits on people, and we should pay through the nose for those drugs.

So when Sovaldi came out to treat hepatitis C, it was priced at $84,000 right out of the gate. And the broader public went nuts, and Congress launched investigations and went after Gilead for pricing it's drug so aggressively. My view was always it's a cure. It's a cure to a terrible disease that afflicts those in the margins of society where we can actually make an enormous difference and get rid of it in one go. $ 84,000 is a lot. And it probably was a little aggressive, given the value of the drug. But sometimes you got to pay a lot to get nice things. And so you get a great drug out there on the market, we should pay for it. We should pay a lot for it. We should be happy about paying a lot for it.

What I worry about is that we now have a lot of incentives in the system to create ineffective drugs or marginally more effective drugs that are wildly more expensive, and that doesn't make any sense. Why would you pay 10 or 100 times as much for a drug that offers a 0.5% benefit, or a benefit in a tiny slice of individuals, but is nonetheless prescribed more widely? It's those drugs where I think you can start to ask questions about value and pushback.

Now, there are all sorts of hard questions that get kicked up whenever you try to talk about paying for value. It's not an easy thing to put a price on a drug. And you're always going to be operating under some uncertainty because clinical trials aren't perfect and information is always partial. But we could do a lot better than we are, even if we were pretty generous. And we can encourage the right kind of innovation. Instead of encouraging pharma companies to come up with the next me too drug, the next drug that's just a little bit better than the last chemotherapy, the one that lets people with lung cancer live three days longer. Instead of that, we'd actually encourage them to start looking for the kinds of therapies that really could be transformative for people. That's what I'd like to see.

Matt Davis:

You need some kind of new measure that's some kind of cost per population benefit ratio or something.

Nicholas Bagley:

Well, and they have these. People make calculations based on the quality adjusted life years that a drug can provide. They compare that to the amount that it costs. ICER, the Institute for Cost Effectiveness Research, has been at the forefront of trying to show how this value proposition can work. I'm on one of its advisory boards for the Midwest, and routinely look at the kind of evidence that people who are going to make these value determinations would look at. And sometimes there are really hard questions. There's no question about it. But we're so far from the optimal situation right now that even marginal improvements could make a big difference.

Matt Davis:

So if you look into your crystal ball, what do you think is going to happen with Aduhelm? Are state budgets going to be exploding across the country or what's going to happen?

Nicholas Bagley: 

Well, I think probably... Look, the path of least resistance here is just to pay for the drug. That's what individual patients are going to want. That's what clinicians are going to want. The people who are harmed by the proliferation of this drug are really going to be the taxpayers who are forced to bear the burden. And to be honest, it's going to be a marginal amount on any given person's tax bill. It's probably not going to motivate people to get out there and vote and to really raise hell in Washington. And so I think politicians are largely going to look the other way as well.

I wish I could say that we'd have a different outcome, and we still could. I have been surprised at how much of the horror at what we're about to witness has been limited to the folks who, they research this, they think a lot about it, they're deep in the weeds of the tradeoffs, but it hasn't been shared by the broader political community. It's been a pretty niche issue. Generally speaking, when it's a bunch of pointy headed experts going up against the broad public demand, the pointy headed experts are going to lose.

Matt Davis:    

You wonder too a little bit with just everything going on in the world, if there's too much bandwidth being consumed by everything else going on that this is not even a priority.

Nicholas Bagley:

It's happening during a time of a lot of free spending, in the sense that there are massive bills going through to spend on coronavirus relief, potentially an infrastructure. Budget discipline seems to be something that certainly the Democrats don't care about, and Republicans don't have any credibility on after they passed an enormous tax bill under Donald Trump and blew up the deficit. So it's a country right now where we're quite comfortable with extraordinary amounts of spending without any offset or serious concern for what might happen to the federal budget and the deficit down the line. Eventually, gravity is going to reassert itself, but I'm not terribly optimistic here.

But the best case scenario, I think right now, is that Medicare creates a fairly stringent set of guidelines for when it's going to pay for the drug, were it to do that. That could mitigate enthusiasm to prescribe it. And it's possible, too, that actual practitioners, actual clinicians, will push back. We've seen this, actually, in the past week or two. Some optimism because we've seen Mount Sinai and Cleveland Clinic and Mayo, real leaders in this space, saying, "We think this is a bad choice for our patients." I'm not willing to say that clinicians across the board are going to fall into line. I think that may just provide a business opportunity for people who are not affiliated with those institutions to open up their own clinics. But if enough clinicians say that the risk profile of these drugs is just too serious, that could really affect prescribing patterns. And maybe the fiscal bomb won't be as large as some of us fear.

Matt Davis:

I was wondering about the side effects scaring people off. But for a condition like dementia, they're probably so desperate, it probably won't. Right?

Nicholas Bagley: 

It's hard to know. Yeah, I think that's right. Anything you can find that might help along some margin, you'd be willing to run lots of risks. What health policy people, when you're behind closed doors and you're talking about the things that really keep people up at night, I remember having these conversations. It was about an Alzheimer's drug that worked. Because there are so many people with Alzheimer's, if you have a drug that's effective and is worth spending $56,000 a year on, that itself would be an enormous budget buster. You're talking about potentially hundreds of billions of dollars a year. And that's a problem, even if the drug works. And so you have to ask hard questions about whether we can collectively afford to pay for a drug that would be individually effective. And that raises a whole set of really difficult ethical questions.

In some sense, the aducanumab saga is much simpler because the drug doesn't appear to work. Or if it does work, it's of such marginal effectiveness that there's no possible way to justify the $56,000 price. But telling people that they shouldn't take a drug because of its risk profile when they're facing dementia, it's a hard sell.

I wish I could be more optimistic about what I thought the outcome would be here. My hope would be ideally that this would be a moment where we could pause, take a step back, and create a new system for thinking about how we pay for drugs in this country. One that would create, I think, better incentives for smarter innovation and would stop us from a bunch of wasteful spending. But it doesn't look like the country is prepared to have that conversation yet. To be honest, I keep waiting and wondering. And maybe the answer is we won't, not at least for the next couple of decades.

Matt Davis: 

Last question. Would you be able to help us secure office space at the law school?

Nicholas Bagley: 

For what?

Matt Davis: 

For listeners not familiar with the University of Michigan, I've always thought that the law campus is the most beautiful spot in Ann Arbor. And it's the place where everybody takes their photographs for graduation.

Nicholas Bagley: 

I think you need to come up with a better pitch than it's really quite beautiful. But if you could, then certainly, I'd be happy to put in a good word. It is a lovely space to work.

Matt Davis:

Nick, it's been great having you on. Thanks so much. And thanks to all of you who listened in.

Nicholas Bagley: 

Happy to be here. Thanks for having me.

Matt Davis:  

If you enjoyed our discussion today, please consider subscribing to our podcast. Other episodes can be found on Apple Podcasts, Spotify, and SoundCloud, as well as directly from us at capra.med.umich.edu, where a full transcript of this episode is also available. On our website, you'll also find links to our seminar series and the data products we've created for dementia research.

Music and engineering for this podcast was provided by Dan Langa. More information available at www.danlanga.com. Minding Memory is part of the Michigan Medicine Podcast Network. Find more shows at uofmhealth.org/podcast. Support for this podcast comes from the National Institute on Aging at the National Institutes of Health, as well as the Institute for Healthcare Policy and Innovation at the University of Michigan. The views expressed in this podcast do not necessarily represent the views of the NIH or the University of Michigan.

Thanks for joining us and we'll be back soon.

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