VA Will Cover Alzheimer’s Disease Drug Lecanemab, Provided A Detailed Set Of Inclusion And Exclusion Criteria Are Met

On Monday March 13th the Veterans Health Administration (VHA) – the division of the U.S. Department of Veterans Affairs (VA) responsible for healthcare provision for veterans – announced it is covering the Alzheimer’s drug lecanemab (Leqembi). At the same time, VHA has issued a list of conditions of reimbursement that are consistent with but also go well beyond the Food and Drug Administration (FDA) label for lecanemab when it was granted an accelerated approval in January.

Specifically, the VHA is making lecanemab available, provided patients and doctors receive prior authorization and meet inclusion criteria for the drug’s use. The VHA website states that veterans who request lecanemab must be over 65, sign a consent form, have been diagnosed with early stage Alzheimer’s disease, have undergone both cognitive testing and an MRI in the past year, and have an amyloid PET scan or cerebrospinal fluid analysis results that are consistent with Alzheimer’s disease.

In addition, the formulary guidance excludes anyone with a medical, neurological, or mental health condition that may be a contributing or primary cause of cognitive impairment, who has had a stroke, transient ischemic attack, or seizure within the last year, as well as any person with MRIs findings that show evidence of micro hemorrhages, aneurysms, lesions or tumors. Also excluded are patients with certain untreated bleeding disorders, thyroid stimulating hormone above the normal range, and any uncontrolled immunological disease.

The formulary guidance goes on to warn that the combined use of lecanemab with anti-platelet or anti-coagulant drugs may increase the risk of cerebral macro hemorrhage.

Approximately 168,000 veterans have Alzheimer’s disease. However, based on the detailed list of conditional requirements for prescribing and reimbursement it’s unclear how many will ultimately be eligible for coverage of lecanemab. Furthermore, of the eligible population it’s unknown what percentage will ultimately decide to take lecanemab after consulting with their physician.

The VHA decision stands in contrast with Medicare’s National Coverage Determination (NCD) for amyloid-directed monoclonal antibodies, such as lecanemab and aducanumab. In April 2022, the Centers for Medicare and Medicaid Services (CMS) issued a decision memorandum which restricts reimbursement narrowly to those enrolled in a post-marketing randomized controlled clinical trial (RCT).

CMS has said it would broaden its coverage of lecanemab “on the same day” the FDA grants a regular approval of the biologic. The date for this decision is July 6th. But lecanemab is not expected to obtain unconditional coverage once it has regular FDA approval. There will likely be coverage limitations, including at least some of the ones the VHA is imposing, and coverage with evidence development requirements which entail additional data-gathering through patient registries.

The VHA runs the largest integrated healthcare system in the nation. Beginning in 1997 the VHA established a national formulary, allowing the agency to leverage its purchasing power to obtain deeper discounts for drugs. Among payers in the U.S. the VHA is unique in that it has an actual – not just a template – national formulary that applies throughout the VHA health system. And unlike Medicare and Medicaid, the VHA can and does explicitly use cost-effectiveness as one of many criteria to determine formulary placement of drugs.

Formulary management within the VHA has the stated goal of providing a “comprehensive, safe, and cost-effective pharmacy benefit for veterans.” Presumably, the formulary managers have established that lecanemab meets the criteria expected of newly approved drugs to attain VHA coverage.

It’s unknown at this time what net price VHA will be paying for the drug. Leqembi’s annual list price is $26,500. But based on past experience the VHA has been able to extract significant discounts off of the list prices of drugs.

What is remarkable is that the VHA is covering this product when it has a history of being cautious about covering newly approved drugs. To illustrate, in a 2015 study, the VHA national formulary covered 16% fewer outpatient drugs than typical Medicare Part D plans. Moreover, for physician-administered drugs we observe similar findings, as the VHA is more restrictive than Medicare Part B.

The VHA’s decision to conditionally cover lecanemab is unlikely to have an impact on CMS’s decision-making process. The VHA is part of a different Department, and the VHA agency is not encumbered by CMS’s published NCD which stipulated that Medicare will only reimburse a regularly approved amyloid-directed monoclonal antibody outside of an RCT if the therapeutic agent unequivocally demonstrates cognitive or functional benefits and is considered reasonably safe.

The regular FDA approval of lecanemab will be based on the positive Phase 3 trial data that was presented in November 2022 at the 15th annual Clinical Trials on Alzheimer’s Disease conference in San Francisco.

Despite the encouraging findings from the Phase 3 trial it is still not unambiguously clear whether lecanemab meets the litmus test CMS imposed in its NCD, namely answering the question CMS posed in the affirmative: “Does the anti-amyloid monoclonal antibody meaningfully improve health outcomes (that is, slow the decline of cognition and function) for patients in broad community practice?”

Though opinions from experts differ on the matter of how clinical meaningful the lecanemab trial data outcomes are, it’s likely that lecanemab’s regular FDA approval will lead to a loosening of Medicare coverage restrictions. For example, should FDA give the nod to lecanemab in July, CMS will probably drop the randomized trial requirement, though it could still require the establishment of a patient registry (or registries) as a way to systematically collect post-marketing evidence on lecanemab’s safety and effectiveness in the real world.