Return to top of page

Study: Impact of International Reference Pricing on Alzheimer’s Research and Development

April 22, 2021   |   Alliance for Aging Research Team   |   Other Neurological Diseases, ACT-AD (Accelerate Cure/Treatments for Alzheimer's Disease)

The number of Americans aged 65 and older with Alzheimer´s disease (AD) is expected to more than double from 6.2 million today to 12.7 million by 2050. Currently, there are no treatments available to stop or slow the progression of the disease. At the same time, large pharmaceutical companies have already downsized investment into AD and other neurological disorders by more than 50 percent due to the associated high risk of study failure for these diseases. International reference pricing proposals (including “International Pricing Index” or “Most Favored Nation”), currently under consideration by the U.S. Congress and proposed in the previous Congress as Title I of H.R. 3, would import foreign price controls for 125 Medicare Part B and D drugs with the highest net spending based on the volume-weighted average of drug prices in Australia, Canada, France, Germany, Japan, and the United Kingdom. Previous analysis of the impact of international reference pricing estimated a 70 percent earnings reduction in 2023 for all 125 therapies that would be potentially affected by the proposed policy.

The impact of international reference pricing is projected to have carryover adverse impacts on research funding for AD. Revenue generated from successful medical products is increasingly required to underwrite investment into high-risk AD clinical development programs. Implementing international reference pricing in the U.S. would sharply reduce the ability to cross-subsidize AD research, further diminishing already dwindling investments and progress in this disease area. This is the key takeaway of a new analysis by Vital Transformation in collaboration with the Alliance for Aging Research.

An Alzheimer’s disease drug development program’s total cost is estimated at $5.7 billion, with an expected study time of 13 years from preclinical studies to market approval. However, due to the clinical complexity of AD and neurological disorders, the failure rate for test therapies in the clinical pipeline to treat Alzheimer’s disease is 98 percent. Between January 2008 and February 2019, 87 out of 161 clinical programs investing and researching Alzheimer’s disease closed. The clinical trial success rates for AD candidates are lower than observed for all other disease areas.

This past decade, the federal government has dramatically increased its investment in Alzheimer’s disease research, starting with $448 million in 2011 and increasing annually to $3.1 billion in 2021. This investment is essential. Still, the vast amount of translational research in Alzheimer’s disease continues to be funded by biotech companies. Seventy percent of all Alzheimer’s disease clinical trials are sponsored or co-sponsored by pharmaceutical companies.

This analysis is released in conjunction with a letter to Congressional leadership signed by over 30 patient advocacy groups, urging Congress to keep any international reference pricing proposals out of drug pricing reform legislation. In addition to the negative impact on future research, the groups expressed concern about the policy’s reliance on methodologies that unintentionally discriminate against older adults, individuals with disabilities, and minority populations in violation of U.S. civil rights law. To read the letter, click here.

Platinum Transparency 2024 logo

The Alliance for Aging Research is a proud recipient of Candid’s Platinum Seal of Transparency.

Charity Navigator Four-Star Rating Badge

The Alliance for Aging Research is proud to be rated a 4-star charity by Charity Navigator.

Living Longer and Loving It

Sign up for our monthly e-mail newsletter for the latest information on
scientific research on aging and health.