The Truly Staggering Cost of Alzheimer's Disease

Source: Flickr userGarry Knight.

Americans are spending $226 billion annually to treat the symptoms of Alzheimer's disease, and other dementias, rather than the cause of this disease itself. That's an endlessly frustrating revelation that if left unchecked, could pose a big threat to the healthcare system. According to the Alzheimer's Association, Alzheimer's disease could cost Americans $1.1 trillion -- yes, trillion -- by 2050.

First, a bit of backgroundIn the U.S., there are 5.3 million people diagnosed with Alzheimer's disease and sadly, another case is diagnosed every 67 seconds.

The vast majority of these patients are seniors, age 65 or older, and that means that the prevalence of this tough-to-treat disease is likely to climb significantly as baby boomers get older.

That aging of America has the Alzheimer's Association estimating that the number of Alzheimer's patients in the U.S. will eclipse 7 million people by 2025, and that by 2050 roughly 14 million Americans will be suffering from this disease.

The cost of careLast year, more than 17.9 billion hours were spent by family and friends caring for Alzheimer's patients. That unpaid care works out to a jaw-dropping economic cost to our country of $217.7 billion, not to mention the $9.7 billion in costs associated with caring for these care givers -- approximately 40% of whom suffer from depression as a result of their efforts.

Beyond the human toll, Americans spending on Alzheimer's treatment is borne heavily by government, particularly Medicare. Currently, about $1 of every $5 spent by Medicare is on Alzheimer's treatment, but that could grow significantly from here. If the Alzheimer's Association's prevalence forecast proves to be correct, spending on Alzheimer's treatment will account for one out of every three Medicare dollars in 2050.

The impact on Medicare is big, but it's also life-changing for individuals too. In 2012, the total out-of-pocket costs associated with caring for Alzheimer's disease patients totaled $44 billion.

If we break down the cost of care per patient per year, it costs an average $47,752 per year to care for an Alzheimer's patient. If that patient is being cared for by a residential facility, the cost sky-rockets to $75,217 per year.

Research effortsSo far, despite significant research efforts to attack Alzheimer's disease directly and reverse its progression have come up frustratingly short.

Only one new drug for Alzheimer's disease has been approved since 2003, and that drug was a combination of two previously-approved therapies.

Between 2002 and 2012, 244 different drugs were evaluated in clinical research trials -- only one of them ever reached the market. Why those drugs have failed is complicated, but it's partially because of the brain's complexity and the protection provided to the brain by the blood-brain barrier.

Although research efforts have stumbled, drugmakers continue to study the disease and to develop potential new therapies. One of the most intriguing of these next-generation therapies is Biogen's BIIB-037. Unlike existing drugs, Biogen's BIIB-037 attempts to tackle Alzheimer's disease at the root of its potential cause: amyloid plaque buildup.

Evidence suggests that a build-up of these commonly occurring plaques leads to the degeneration of neurons associated with the decline in brain function suffered by Alzheimer's patients.

In a very early stage human clinical trial, BIIB-037 proved to be the first drug to successfully reduce amyloid plaque levels and slow the rate of decline in cognitive function. Based on those results, Biogen plans to skip right to late stage phase 3 studies of this drug later this year. If that trial goes well, then perhaps BIIB-037 could become one of the first drugs approved that could stall or slow Alzheimer's progression.

Looking aheadThere's considerable work being done to address Alzheimer's disease and its economic and human impact, but we're still years away from having solutions that could make a difference. As a result, the soaring costs associated with Alzheimer's disease are unlikely to abate anytime soon. That's a frustrating prospect. However, rising prevalence and the significant unmet need leaves me optimistic that there will be more clinical successes like Biogen's down the road. Perhaps, those advances will offer up new hope to patients and their caregivers.

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Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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