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Aduhelm’s Limited Medicare Coverage Spurs Calls to Cut Premiums

April 8, 2022, 9:00 AM

Medicare’s decision to limit coverage of Biogen Inc.'s controversial Alzheimer’s drug Aduhelm is already spurring calls for the Biden administration to lower the program’s largest-ever rate increase this year.

The standard monthly premium for Medicare outpatient, or “Part B,” coverage went from $148.50 in 2021 to $170.10 this year, in part to shore up contingency reserves in case the program began to cover Aduhelm. The costly drug was first priced at $56,000 a year, but has since been lowered to $28,000.

The $21.60 increase is the largest annual dollar-amount rate hike ever for Part B coverage, while the 14.5% increase is the third-largest percentage increase since 2007, according to the Centers for Medicare & Medicaid Services. Possible Aduhelm coverage accounted for half of the rate hike.

But after Biogen lowered the price of Aduhelm to $28,000 in December 2021, HHS Secretary Xavier Becerra directed the CMS in January to review the Part B rate hike. “We’re still going through that process,” Beth Lynk, a CMS spokesperson, said during a press briefing on Thursday.

With the decision Thursday to only cover Aduhelm for beneficiaries in qualifying clinical trials, fewer beneficiaries are likely to be eligible for coverage.

That projected savings should merit a reduction in the Part B premium, according to the National Committee to Preserve Social Security and Medicare.

“Medicare beneficiaries struggling to pay their bills need relief from this year’s premium increase as soon as possible,” Max Richtman, the committee’s president and CEO, said in a statement. If Medicare had been able to negotiate the price of Aduhelm, it is unlikely that it would have impacted Medicare premiums so dramatically in the first place,” Richtman said.

The Medicare Rights Center, which also supports revising the 2022 Part B premium, did not respond to a request for comment in time for this story.

The Alzheimer’s Association strongly opposed the final coverage decision.

“We are very disappointed with the immediate impact it will have on Americans living with Alzheimer’s and their families,” Harry Johns, the group’s CEO, said in a statement. He said it was wrong for the CMS to deny access to an FDA-approved drug. “At no time in history has CMS imposed such drastic barriers to access FDA-approved treatments for people facing a fatal disease,” Johns said.

Aduhelm has been under scrutiny since the U.S. Food and Drug Administration approved it through an accelerated pathway that allows treatments onto the market based on their effect on some marker of disease, rather than overall survival or clinical benefit.

The FDA said the drug proved it can clear an Alzheimer’s-linked protein called amyloid from the brain. Some doctors are skeptical it will slow the progression of the disease, and Biogen’s own studies of the drug have yielded conflicting results.

Possible coverage of Aduhelm accounted for half of the 2022 Medicare Part B rate increase. The other half was due to increasing costs and usage across the health-care system, and pandemic-related congressional action which lowered Part B premiums in 2021. Congress directed the CMS to pay back the rate reductions over time.

CMS officials last fall said the increased Part B premiums would be offset for most beneficiaries by a 5.9% cost of living increase in their monthly Social Security benefits.

—With assistance from John Tozzi

To contact the reporter on this story: Tony Pugh in Washington at tpugh@bloomberglaw.com

To contact the editor responsible for this story: Brent Bierman at bbierman@bloomberglaw.com