(Bloomberg) — The U.S. government is set to decide this month whether federal health insurance should cover the cost of a $3,000 test that for the first time accurately identifies the signature brain plaques of Alzheimer’s disease.

A lot is riding on the decision. Those in favor of coverage say the brain scan will reduce anguish and lower medical costs for families struggling to determine appropriate care for a relative suffering from memory loss. What’s more, the test could help create a broad base of early Alzheimer’s patients for research purposes, they say. Opponents counter that coverage would be a waste of money because Alzheimer’s remains an incurable disease and knowing whether a person has the disease is of little or no benefit.

“I wouldn’t be surprised if this decision went in either direction,” says Sean Tunis, the founder and director of the Center for Medical Technology Policy in Baltimore. “The science on this one is so early, so it’s hard to make a case from a clinical point of view that the diagnosis will make a difference. It will tilt on political dynamics more than the science.”

The test, approved last year by U.S. regulators, uses Eli Lilly & Co.’s Amyvid imaging agent to trace a brain protein linked to a disease that affects 5 million Americans, a number that patient advocates say could double by 2050. A decision in favor of coverage could also spur interest in a similar agent that General Electric Co. is developing.

Mistaken Alzheimer’s

Differentiating between those who suffer from Alzheimer’s and others who have lesser forms of dementia is key for determining proper treatment, says Robert Berenson, a fellow at the Urban Institute. One kind of illness frequently mistaken for Alzheimer’s is called multi-infarct dementia. For this condition, doctors can use blood thinners to keep the disease from progressing.

Memory loss can also be caused by tumors or dietary deficiencies, conditions that can be reversed before they become too damaging, says Dean Hartley, director of scientific initiatives for the Alzheimer’s Association.

“We need to make sure we can rule out Alzheimer’s,” Hartley says.

Over the last decade, attempts to develop an effective Alzheimer’s’ treatment have come up short, failing to crack an estimated $20 billion market. As a result, scientists have called for a national research effort that was recently endorsed by U.S. President Barack Obama.

Amyloid plaques

Amyvid, the first drug of its kind, was approved for sale last year by U.S. regulators, and in January in Europe. It binds to beta-amyloid plaques in the brain that are a suspected cause of Alzheimer’s. The dye’s radiation allows an image to be produced using a PET scan, showing where amyloid plaques exist in the brain and how extensive they may be.

In January, after Lilly requested a determination on coverage from the Centers for Medicare and Medicaid Services, a panel of U.S. advisers said it wasn’t confident the tests would improve the health of people with Alzheimer’s. A final decision will come July 9, according to Don McLeod, an agency spokesman who declined to comment further. The agency oversees Medicare, the U.S. health program for the elderly and disabled, and Medicaid, the joint-state medical plan for the poor.

While a negative decision would limit use of the tests, approval would probably open the door for coverage by private insurers such as UnitedHealth Group Inc., which often follow the federal government’s lead. That would potentially result in millions of people receiving the test.

 

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