OBJECTIVES: Promising disease-modifying therapies (DMTs) for Alzheimer's disease (AD) have recently completed or are nearing the end of clinical trials and preparing for market authorization and reimbursement approvals in Canada. These DMTs are frequently regarded as cost-saving for the healthcare system, as they have the potential to delay the progression of AD and prevent the need for institutionalization.

The objective of this study is to assess how different annual treatment costs and levels of treatment efficacy for a hypothetical AD DMT in Canada can influence the net lifetime cost associated with the treatment, the cost per year of avoiding institutionalization, and the incremental cost-effectiveness ratio (ICER) of the treatment when compared to the existing standard of care.

METHODS: A health economic model assessing the costs and benefits of a hypothetical DMT was developed based on the recently published AD pharmacoeconomic model, by the Institute of Clinical and Economic Review. Canadian direct and indirect costs of care for patients with AD for various health states in community and institutional settings were obtained from published sources. The net lifetime costs, the costs per one year of institution avoidance, and the ICER for a typical AD patient cohort were estimated for a range of annual treatment costs and treatment efficacy levels.

RESULTS: The analysis demonstrates the impact of treatment cost and efficacy on lifetime cost, cost per year of institution avoidance, and the ICER. It shows that since delaying disease progression increases patient survival, an efficacious treatment may result in higher per-patient lifetime cost at a given treatment cost.

CONCLUSIONS: The study highlights the interconnected relationship between treatment costs, lifetime costs, and treatment efficacy from Canadian payer and societal perspectives. Focusing solely on cost-savings may provide a misleading assessment about the overall economic benefit of a new DMT in Canada.