Medicare’s Finances and the Aduhelm Saga

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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.