From Grants to Patients: The Financial Anatomy of Alzheimer’s Treatment

In contemporary medicine, discussions around care are rarely detached from those about money. Whether in policy debates or scientific publications, “funding” is a recurring word. Alzheimer’s disease (AD), the most common cause of dementia, provides a particularly stark lens through which to examine this relationship. Affecting over 7 million people in the U.S. in 2025 (Alzheimer's Association, 2025), AD imposes immense clinical and economic burdens. How do patients navigate between effective treatment and cost-efficiency? And how do the financial incentives behind treatments affect clinical decision-making?

Research into Alzheimer’s disease is a multi-billion-dollar industry, with governments and pharmaceutical companies investing billions to understand and mitigate the disease’s effects. Since the passage of the National Alzheimer’s Project Act (NAPA) in 2011, annual funding for Alzheimer’s research through the National Institutes of Health (NIH) is projected to reach $3.9 billion by 2026 (Alzheimer’s Association, 2025b). However, one of the five core goals of the 2012 National Plan, to “prevent and effectively treat Alzheimer’s disease and related dementias by 2025”, remains unmet. The failure rate of AD drug development was 99.6% from 2002 to 2012 (Drug Discovery Trends Editor, 2014), underscoring the deep disconnect between investment and clinical outcomes. 

According to Cummings et al. (2018), the total cost of an AD drug development is estimated at $5.6 billion and spans approximately 13 years from preclinical studies to FDA approval. Compared to cancer treatment development estimated at $793.6 million per agent, AD drug development is substantially more costly. This disparity highlights the challenges of translating funding into tangible therapeutic progress.

Three main pharmacological treatments are commonly used for Alzheimer’s: galantamine, memantine, and lecanemab. Each represents a different balance of clinical benefit, adverse reactions, and economic cost. 

Galantamine, marketed as Reminyl, is an acetylcholinesterase inhibitor prescribed for mild to moderate Alzheimer’s. It costs roughly $1,200 annually per patient (Suh et al., 2008). Studies show it can modestly improve cognition and delay functional decline (Onor et al., 2007), yet 46% of galantamine-treated patients reported gastrointestinal adverse effects (Jones et al., 2004). 

Memantine, on the other hand, targets glutamate activity in the brain and is used for moderate to severe Alzheimer’s. It is slightly more expensive at around $1,900 per year but offers only limited cognitive improvement (Tampi & Dyck, 2007). It shows the best profile of acceptability, but comes with serious risk if you do not take it as prescribed, as symptoms often worsen quickly (Blanco-Silvente et al., 2018).

Lecanemab, a monoclonal antibody targeting amyloid-beta plaques, is the most recent innovation and is deemed the most successful in slowing clinical decline from AD. In a Phase 3 trial, lecanemab slowed the rate of cognitive decline by 27% over 18 months among participants with early-stage AD. It also exhibited lower rates of adverse reactions, with 21.3% of patients who received lecanemab having an incidence of adverse events (Hodes, 2023). However, it has the most severe adverse reaction as it often results in amyloid-related imaging abnormalities, which may cause blood vessel leakiness leading to localised brain swelling and bleeding in the brain. Moreover, the treatment alone costs $26,500 per year (Grabowski & Rosenbloom, 2023). 

Despite such high drug prices, the cost for medication only accounts for 5% of the total cost of care for treated Alzheimer’s patients, with the overall economic burden of dementia in the U.S. reaching $781 billion, including quality of life loss and informal and medical care (Rika Kanaoka, 2025). Two-thirds of these costs are borne by patients and families, often through unpaid labor or selling property to pay for care. 

While drugs like galantamine or lecanemab aim to slow disease progression, they are not always effective and further expose socioeconomic inequalities embedded within the healthcare system. The pharmaceutical industry’s reliance on patent-based revenue models and high launch prices exacerbates the divide between scientific advancement and equitable access. The hidden economy of medicine ensures that financial pressures remain central to clinical outcomes. 

From the laboratory to the bedside, money moves silently through every stage of medicine. While drugs like galantamine, memantine, and lecanemab offer measurable, or at times modest, clinical benefits, their costs raise the question of how we can sustain innovation without commodifying care. The hidden economy of medicine is not inherently malevolent: grants fund lifesaving discoveries, and pharmaceutical profits support future research. Yet the structure of modern healthcare often hides the ethical trade-offs that accompany financial incentives. To navigate these tensions, healthcare must be more financially transparent, prioritize equitable access, and redefine value beyond profit and productivity.

Reviewed by: Anjali Reddy

Designed by: Poorvaja Chandramouli

References:

Alzheimer's Association. (2025a). Alzheimer’s Disease Facts and Figures. Alzheimer’s Disease and Dementia; Alzheimer’s Association. https://www.alz.org/alzheimers-dementia/facts-figures

Alzheimer's Association. (2025b, July 31). $100 Million Increase Approved for Alzheimer’s Research | alz.org. Alzheimer’s Association; Alzheimer’s Association. https://www.alz.org/news/2025/senate-appropriations-committee-approves-100-million-increase-alzheimers-research

Blanco-Silvente, L., Capellà, D., Garre-Olmo, J., Vilalta-Franch, J., & Castells, X. (2018). Predictors of discontinuation, efficacy, and Safety of Memantine Treatment for Alzheimer’s disease: meta-analysis and meta-regression of 18 Randomized Clinical Trials Involving 5004 Patients. BMC Geriatrics, 18(1). https://doi.org/10.1186/s12877-018-0857-5

Cummings, J., Reiber, C., & Kumar, P. (2018). The price of progress: Funding and financing Alzheimer’s disease drug development. Alzheimer’s & Dementia: Translational Research & Clinical Interventions, 4, 330–343. https://doi.org/10.1016/j.trci.2018.04.008

Drug Discovery Trends Editor. (2014, July 7). 99% of Alzheimer’s Drug Trials Fail, Study Says - Drug Discovery and Development. Drug Discovery and Development. https://www.drugdiscoverytrends.com/99-of-alzheimers-drug-trials-fail-study-says/

Grabowski, T. J., & Rosenbloom, M. (2023, July 7). What the FDA Approval of Lecanemab Means for Patients and Families: A Q&A with MBWC Clinicians - Memory and Brain Wellness Center. Depts.washington.edu. https://depts.washington.edu/mbwc/news/article/lecanemab

Hodes, R. J. (2023, July 6). NIA statement on report of lecanemab reducing cognitive decline in Alzheimer’s clinical trial. National Institute on Aging. https://www.nia.nih.gov/news/nia-statement-report-lecanemab-reducing-cognitive-decline-alzheimers-clinical-trial

Onor, M. L., Trevisiol, M., & Aguglia, E. (2007). Rivastigmine in the treatment of Alzheimer’s disease: an update. Clinical Interventions in Aging, 2(1), 17–32. https://doi.org/10.2147/ciia.2007.2.1.17

Rika Kanaoka. (2025, April 23). The Cost of Dementia in 2025 - April 23, 2025 - USC Schaeffer. USC Schaeffer. https://schaeffer.usc.edu/research/the-cost-of-dementia-in-2025/

Suh, G.-H., Jung, H. Y., Lee, C. U., & Choi, S. (2008). Economic and Clinical Benefits of Galantamine in the Treatment of Mild to Moderate Alzheimer’s Disease in a Korean Population: A 52-Week Prospective Study. Journal of Korean Medical Science, 23(1), 10–10. https://doi.org/10.3346/jkms.2008.23.1.10

Tampi, R. R., & Dyck, C. H. van. (2007). Memantine: efficacy and safety in mild-to-severe Alzheimer’s disease. Neuropsychiatric Disease and Treatment, 3(2), 245–258. https://doi.org/10.2147/nedt.2007.3.2.245

The Hidden Budget of a Hospital: Where Every Dollar Goes and How It’s Changing

Every year, billions of dollars pour into our hospitals and healthcare, and while headlines focus on record-breaking research grants and rising healthcare costs, few talk about what happens in between. The way money moves through the hospital dictates the quality and efficiency of patient care throughout the U.S. medical system [1]. 

According to America's Health Insurance Plans (AHIP), the U.S. spends 40.7 cents out of each dollar in healthcare on hospital costs. Outpatient care costs cover physician and facility payments for treatments outside the emergency room, which uses 19.9 cents. Inpatient Care, which includes the cost of administering drugs during hospital stays and payments to doctors and facilities, accounts for 17.6 cents. Emergency Room costs, which include ambulance services plus physician and facility payments for ER visits, use 3.2 cents [3].

An effective healthcare budget is vital to achieving efficient patient care. The process hospitals use to create their budgets is called a rolling forecast, which uses historical data of the hospital to update near- and long-term financial projections. The hospital budget is split into two main types of costs: operational and capital. Operational costs include facility operating costs and personnel costs, including staffing and training. Staffing accounts for salaries, overtime hours, potential overstaffing, and other variables. Capital costs include beds, equipment (updated and increasing amount), and possible renovations. New facilities or technology can impact future staffing or operating costs [2], and the operating budget and the capital budget heavily influence one another. 

The typical financial pressures of a hospital are due to the tight margins it must work within. The majority of hospital revenue comes from high-cost, billable procedures, especially those involving operating rooms, imaging suites, or specialty care [1]. Most hospitals barely break even because their margins hover around 2 to 4 percent. For every $100 they make, only a few dollars are left after covering costs. And those few dollars? That’s what keeps things moving forward, funding new technology, better spaces, and the people who make it all work [1]. When hospitals don’t have much financial wiggle room, their leaders tend to play it safe with money and decisions. Instead of taking big risks or investing in bold new ideas, they focus on small, gradual improvements that feel safer. This means they avoid getting rid of old systems or technology, even if those are outdated or inefficient, because replacing them costs money and carries risk. When money is tight, innovation slows down and efficiency often takes a backseat to financial caution [1].

Hospitals today are facing new financial dilemmas: rising costs and insufficient reimbursement driven by policy changes. Labor remains the single largest category of hospital spending, costing roughly 890 billion dollars. In spite of the workforce, hospitals are still offering competitive wages to recruit and retain staff. While this labor expense is essential to maintain staffing levels, it contributes to the overall financial burden on the hospitals. Additionally, issues arise due to Medicare reimbursement lagging behind inflation. From 2022 to 2024, general inflation rose by 14.1%, while Medicare net inpatient payment rates increased by only 5.1% [4]. With Medicare only covering 83 cents of every dollar spent by hospitals in 2023, hospitals absorbed $130 billion in underpayments from Medicare and Medicaid [4]. Furthermore, total hospital expenses grew 5.1%, significantly outpacing the overall inflation rate of 2.9% in 2024 [4]. With rapid hospital expense growth and inadequate reimbursement, hospitals are increasingly unable to reinvest in critical physical assets, such as medical equipment, operating rooms, and facility upgrades [4].

Recent changes in U.S. trade policy are creating even greater uncertainty, with the current Administration implementing new tariffs that affect medical devices and supplies, and considering new tariffs on pharmaceuticals. According to the AHA analysis of Census Bureau data, the U.S. imported over $75 billion in medical devices and supplies in 2024 alone. Tariffs on these critical goods could exacerbate shortages, disrupt patient care, and continue to raise costs for hospitals. A recent survey found that 82% of health care experts expect tariff-related expenses to raise hospital costs by at least 15% over the next six months, and 94% of health care administrators expect to delay equipment upgrades to manage financial strain. [4] Additionally, the recently signed budget law known as the One Big Beautiful Bill Act (OBBBA) has caused hospitals around the country to lay off thousands of healthcare workers, working primarily in research, administrative, and other support areas [5].

With the recent factors, such as Medicaid changes, shrinking research funds, and rising labor and supply costs, hospitals are bracing for even more financial tightening. These cuts hit patient care, staffing, and hospitals’ ability to innovate. As hospitals face growing financial strain, the focus shifts from improving care quality to simply maintaining operational stability. Ultimately, the way money moves through hospitals will continue to define not only the quality of care but also the future of American healthcare itself.

Reviewed by: Emma Zhang

Designed by: Selena Xiao

References:

[1] Matt, S. (2025, June 3). Newsletter #22: The Hidden Ledger - Where Hospital Dollars Go, and What That Means for Innovation. Linkedin.com. https://www.linkedin.com/pulse/newsletter-22-hidden-ledger-where-hospital-dollars-go-matt-md-mba-vjeje/.

[2] Strata. (2021, August 13). Healthcare and Hospital Budgeting: A Complete Guide | Syntellis. Strata Decision Technology. https://www.stratadecision.com/guide-to-healthcare-and-hospital-budgeting. 

[3] RazorMetrics. (2024, December 6). Healthcare Dollar Breakdown. RazorMetricsTM. https://razormetrics.com/2024/12/06/healthcare-dollar-breakdown/.

[4] American Hospital Association. (2025, April). America’s hospitals and health systems continue to face escalating operational costs and economic pressures as they care for patients and communities. Www.aha.org; American Hospital Association. https://www.aha.org/costsofcaring.

[5] Hospitals make painful choices as federal cutbacks add to economic headwinds. (2025). AAMC.https://www.aamc.org/news/hospitals-make-painful-choices-federal-cutbacks-add-economic-headwinds.

Behind the Scenes - the Truth Behind our GDP

The United States is historically well-known for many things, one being our rapid advancement. We have been a dominating power in economics, politics, and of course, healthcare. The United States has very technologically advanced healthcare resources that remain nearly unparalleled. While one may assume that this would cause the United States to have a similarly amazing healthcare system, this is not entirely true. In fact, a huge portion of the USA’s GDP goes towards the healthcare system. What factors contribute to America’s expensive healthcare? That’s exactly what we’re going to discuss here.

The United States continues to have many scientific advancements that further promote medicine, but this unfortunately doesn’t have all positive consequences. Firstly, medical technology advancement is attractive to both doctors and hospitals. The more technological advancements a practice has to have, the more resources the physicians have at their disposal and, as such, is part of why certain doctors are attracted to certain job locations over others. However, this medical equipment serves as an investment, and doctors and hospitals alike want to make the most of them. As such, this leads to an increase in equipment usage, possibly even unnecessarily, contributing to the cost of the high GDP expenditure on healthcare. Furthermore, many doctors practice the concept of defensive medicine. Defensive medicine is where a doctor orders a surplus of tests, oftentimes that are unnecessary, utilizing these medical technologies in an effort to protect them from any medical malpractice suits. Not only is this unethical (focusing on the self-interest of the physician rather than the health of the patient, violating their oaths), but it also serves to further drive the portion of GDP used on healthcare up due to the costs. 

In addition, another cause that increases healthcare expenses is medical entrepreneurship - a concept that turns medicine into a for-profit business. Medical entrepreneurship consists of many different factors - corporate profits, administrative costs, high CEO salaries, and medical fraud. There are many things to unpack here, but the most important and expensive factor is the administrative costs of healthcare (mainly including patient billing). The fact that administrative costs contribute to the inefficiency of the healthcare system is astounding but the harsh truth. Not only does billing take up the physicians’ time, but it also takes up a large chunk of resources that can be better distributed throughout the healthcare system. Many people argue that this money could be used to fund Medicaid whilst others argue that it can be used to form a universal insurance and flow back into the economy. 

Regardless of either side or opinion, it is clear that many people in America remain unsatisfied with the American healthcare system - even after the healthcare reform that occurred following the Affordable Care Act. There are many other factors that play a role in the high cost of American healthcare, but these are some that remain outstanding to many sociologists due to the lack of medical necessity. While we have had many reforms regarding our healthcare system in recent decades, it is clear that our work is not done and much needs to be reformed - one of which being the high cost yet low efficiency of the system.

Reviewed By: Abby Winslow

Designed By: Lexi Field

References:

[1] LONNQUIST, Lynne E., and Gregory L. WEISS. (2006). The Sociology of Health, Healing, and Illness Gregory L. Weiss, Lynne E. Lonnquist. Pearson Prentice Hall, 2006.