The Value of Delaying Alzheimer’s Disease Onset

The steady rise in longevity over the past 50 years has tremendous social value but it comes at a cost. Over the same period of time, the United States has devoted an increasing share of its income to health care resulting in dire consequences for the long-term fiscal outlook of the U.S. There are a myriad reasons why health care spending has risen including aging and population growth, insurance expansions, price changes, and new technologies.  Providing accurate and timely assessment ofcurrent and forthcoming treatments for Alzheimer’s Disease (AD) and policies related to the disease is particular relevant because of the high economic and social cost associated with AD. 

The need to address the economic and social costs of Alzheimer’s disease increases in urgency as the baby boom generation ages and life expectancy continues its decades long increase.   According to the U.S. Census, in 2012, there were 40.3 million Americans 65 and older, constituting 13% of the population.  By 2050, there will be 88.5 million Americans aged 65 and older constituting 20% of the population, thus the number of Americans affected by AD is expected to rise dramatically.  While there are no existing interventions proven to halt Alzheimer’s disease and interventions designed to slow disease progression have had limited success, promising drug therapies have been identified.

We use an economic and health simulation model to estimate current and future prevalence of AD and formal and informal costs of AD given current trends in demographics and health conditions.  We estimate the effects of a hypothetical medical intervention that delays the onset of AD for 1, 3 and 5 years on the magnitude of the population with AD, costs of the disease and value of this treatment. Using nationally representative longitudinal data from the Health and Retirement Study and Aging, Demographics and Memory Study we found that from 2010 to 2050, the number of people ages 70 and older with AD will increase from 3.6 million to 9.1 million.  Annual formal and informal costs of individuals aged 70 and older with AD are $321 billion in 2010 composed of $195 billion in formal costs and $126 billion in informal costs.  By 2050, total costs rise to $1.6 trillion. In 2010, yearly per person total costs of individuals with AD were $75,000 and will almost double by 2050. About 75% of the costs are attributed to Medicare and Medicaid.  A medical or pharmaceutical innovation that delays onset of AD for five years will result in an American population ages 70 and older with AD that is 41% lower in 2050 than the population would otherwise have been and societal costs that are 43% lower. Delaying AD by 5 years leads to 2.5 additional AD-free years of life for an individual who would have acquired AD and is worth about $475,000 to an individual net of the increase in formal and informal costs associated with a longer life.