Annual Medicare spending could increase by $2 to $5 billion if Medicare expands coverage for dementia drug lecanemab

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The anti-dementia medication lecanemab and its ancillary costs could add $2 billion to $5 billion in annual Medicare spending if the Centers for Medicare and Medicaid Services (CMS) revise their coverage decision. Currently, the medication is covered only for patients who are enrolled in clinical trials. 



Lecanemab is currently available as a treatment for mild cognitive impairment and mild dementia under the Food and Drug Administration’s (FDA) accelerated approval program. The FDA is expected to grant lecanemab traditional approval later this year, prompting Medicare to reconsider its coverage restrictions and potentially enabling widespread use. Clinical trials have shown that the drug has modest clinical benefit. Moreover, because of its risk of brain swelling and brain bleeding, also known as amyloid-related imaging abnormalities, or ARIA, the treatment requires frequent monitoring via neurology visits and MRI scans. 



The researchers performed a cost analysis using data from the nationally representative 2018 Health and Retirement study (HRS), incorporating both the direct drug costs as well as the indirect ancillary costs for associated health services such as MRIs, neurology visits, and other related care.


Limitations to the study include use of plaque rates derived from population studies rather than from HRS participants’ scans, possible misclassification of some cases of dementia prevalence and stage, and responses from participants with cognitive impairment which may not be reliable, although proxies can respond on their behalf. Also, the researchers did not account for price changes, societal costs, and potential long-term changes in health system capacity or patient demand.



Medicare fee-for-service spending was $37 billion in 2019 for drugs such as lecanemab that are administered in outpatient settings. In addition to higher Medicare spending, lecanemab’s medication and ancillary out-of-pocket costs for patients lacking supplemental coverage could reach $6,600 per year, which is approximately one fifth of the median income of a U.S. Medicare beneficiary. Medicare annual spending on lecanemab’s medication costs alone would place it among the most expensive Part B medications delivered in outpatient facilities. 



“These medications have modest clinical benefit and clear risk of brain swelling and bleeding for patients, which in rare cases may be fatal,” said Julia Cave Arbanas, research project manager and one of the paper’s lead authors. “We estimated that lecanemab and its ancillary costs such as MRI scans could add an additional $2- to $5 billion in Medicare spending. These additional costs could strain the Medicare program and its beneficiaries, who may face rising premiums to help Medicare pay for the drug. Additional premium increases are especially concerning because many older Americans rely on a fixed income.”



Additional study authors are Cheryl Damberg of RAND Corporation (co-first author); Mei Leng, Nina Harawa, Dr. Catherine Sarkisian, and Dr. John Mafi of UCLA; and Dr. Bruce Landon of Harvard University. Mafi and Sarkisian are also affiliated with RAND and VA Greater Los Angeles Healthcare System Geriatrics Research Education & Clinical Center, respectively. 



The study is published in JAMA Internal Medicine



The study was funded by the National Institute on Aging (R01AG070017-01). Mafi was also supported by the National Institute on Aging (K76AG064392-01A1)



Arbanas reported grants from National Institutes of Health National Institute on Aging (NIH/NIA) during the conduct of the study, and  grants from NIH/NIA, Arnold Ventures, and The Commonwealth Fund outside the submitted work. Damberg reported grants from NIH during the conduct of the study. Harawa reported grants from NIH/NIA (5R01AG070017) during the conduct of the study. Sarkisian reported grants from NIH/NIA (K24), NIH/National Center for Advancing Translational Sciences (NCATS), and NIH/NIA (R24) during the conduct of the study. Mafi reported grants from NIH/NIA (R01AG070017-01) and NIH/NIA Beeson Emerging Leaders in Aging Research Career Development Award (K76AG064392-01A1) during the conduct of the study, and from Arnold Ventures, Commonwealth Fund, and nonfinancial support from Milliman MedInsight for studying low-value care in Medicare, and provided unpaid consulting to Milliman MedInsight outside the submitted work. Mafi also provided unpaid consulting to the Agency for Healthcare Research and Quality (AHRQ) outside the submitted work. No other disclosures were reported.


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