Explainer: How will insurers cover a new Alzheimer's drug?

Federal regulators have approved the first new drug for Alzheimer's disease in nearly 20 years, leaving patients waiting to see how insurers will handle the pricey new treatment.

Health care experts expect broad coverage of the drug, which was approved Monday. But what that means for patients will vary widely depending on their insurance plan. In some cases, that could mean coming up with several thousand dollars to pay for what the insurer didn't cover.

And there's no guarantee that every case will be covered.

Here's what you need to know:

WHAT WAS APPROVED?
The

Food and Drug Administration

said it granted approval to a drug from Biogen based on clinical research results that seemed "reasonably likely" to benefit Alzheimer's patients.

It's the only drug that U.S. regulators have said can likely treat the underlying disease, rather than just manage symptoms. The new drug, which Biogen developed with Japan's Eisai Co., did not reverse mental decline. It slowed it in one study.

The

FDA

's decision came despite the conclusion of its advisory committee that there wasn't enough evidence that the drug slowed the brain-destroying disease.

WHAT DOES IT DO?
It aims to help clear harmful clumps of a protein called beta-amyloid from the brain. The medication will be marketed as Aduhelm and is to be given as an infusion every four weeks.

WHAT WILL IT COST?
Biogen said the drug would cost approximately $56,000 for a typical year's worth of treatment, and it said the price would not be raised for four years.

HOW WILL INSURERS COVER IT?
They will likely request some documentation first that the patient needs the drug. Many plans will require doctors to submit records and other paperwork justifying the treatment before they agree to cover it.

Insurers also will likely require pre-approval for brain scans needed to determine that the patient is a candidate for treatment, said Lance Grady of Avalere Health consultants.

He noted that some plans also may want to see the results of a scan before they decide to cover the next infusion, which could delay treatment.

IS COVERAGE GUARANTEED?

Medicare

is widely expected to cover the treatment. Insurers that offer private or commercial coverage also will pay for care that doctors deem medically necessary.

That may not mean every case, though. If the treatment is proposed for a patient with advanced Alzheimer's, and research shows the drug isn't effective in that population, then the insurer may not pay for it.

"That happens all the time with drugs," said Robert Laszewski, a health care consultant and former insurance executive. "Just because the FDA says its safe doesn't mean it's appropriate for everybody."

WHAT WILL PATIENTS PAY?
That's impossible to say broadly.

It can depend on the person's coverage and their out-of-pocket maximum, which is a plan's limit for how much a patient pays in a year for in-network care before insurance picks up the rest of the bill.

Some patients who are already receiving a lot of care may not wind up with a huge added expense from the drug before they hit that limit.

Patients who have a supplemental plan for their Medicare coverage also may wind up with few out-of-pocket costs for the drug.

Patients with Medicare Advantage coverage, which is run by private insurers, or individual health insurance could pay several thousand dollars before they hit their plan's annual limit, depending on the plan.

"That could be very burdensome for someone, especially if a person is looking at this cost every single year, and they don't have an option to get a better health plan," said Stacie Dusetzina, an associate professor at

Vanderbilt University

and drug pricing expert. "It can add up."

ARE THE DRUGMAKERS HELPING?
Cambridge, Massachusetts-based Biogen plans to begin shipping millions of doses within two weeks.

The company says it will help patients figure out their options for financial assistance and find providers and care infusion sites. The drugmaker also is offering programs to help reduce the out-of-pocket cost for some patients with commercial coverage.

But people with Medicare and Medicare Advantage coverage cannot get drugmaker discounts like that. Health care researchers say most of the people who will need this drug will have some form of Medicare coverage.