Medicare’s Finances and the Aduhelm Saga

The brief’s key findings are:

• Medicare’s finances have improved over the past decade, but major challenges remain, such as the program’s vulnerability to expensive new drugs.
• This risk was underscored by the saga of Aduhelm, a costly and controversial new drug for early-stage Alzheimer’s.
• The immediate risk eased in January when Medicare proposed limiting the drug’s use to clinical trials due to concerns over its effectiveness.
• However, if a similar drug with proven effectiveness were to become available, Medicare would be highly exposed due to its inability to negotiate prices.
• Thus, policymakers should give Medicare some negotiating authority to ensure that much-needed drugs don’t bankrupt either Medicare or individuals.