A new drug could drive up insurance prices and earn billions from Medicare.


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A new Alzheimer’s medication is likely to further inflate high U.S. health care costs even as it is poised to be a blockbuster for Biogen, its manufacturer.

The drug is expected to become one of the best-selling pharmaceutical products in the world within a few years. Billions of dollars in anticipated costs are likely to be shouldered largely by Medicare, Rebecca Robbins and Pam Belluck report for The New York Times.

The drug’s approval could drive up insurance premiums, according to health care policy experts. And it could add new out-of-pocket costs for some families that are already facing years of staggering costs for caring for loved ones with Alzheimer’s.

“This is really what keeps me up at night: A therapy of this cost is going to have enormous implications for everyone,” said Dr. Joseph Ross, a pharmaceutical policy expert at Yale who sits on a committee that advises Medicare on some coverage decisions. “And by everyone, I literally mean you, too. There’s going to be some 60- and 70-year-olds on your plan. If they start getting this treatment, you will see your premiums will go up.”

Biogen’s $56,000 price tag is higher than many Wall Street analysts had expected. The company’s shares soared 38 percent on Monday.

Even if only a small fraction of people with Alzheimer’s begin taking the drug, it will be enormously lucrative. Analysts at Cowen said on Monday that they expected the drug to reach 8 percent of Americans with mild Alzheimer’s by 2025, yielding $7 billion in revenue.

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