On Monday, U.S. Health Secretary Xavier Becerra ordered Medicare to reconsider a large premium increase that will affect millions of seniors this year, which is being attributed in large part to a pricey new Alzheimer’s drug with questionable benefits.
Becerra’s directive came just days after Biogen reduced the price of Aduhelm, a $56,000-per-year medication, to $28,200 per year — a nearly half-price reduction.
“With Aduhelm’s 50% price drop on January 1, there is a compelling basis… to reexamine the previous recommendation,” Becerra said in a statement about his directive to the Centers for Medicare and Medicaid Services.
More than 50 million Medicare recipients who pay the $170.10 monthly “Part B” premium for outpatient care will see no immediate change, but Monday’s announcement may pave the way for a reduction later in the year. The Department of Health and Human Services has stated that it is in contact with the Social Security Administration, which collects the premium, to investigate options.
The standard Part B premium will rise by about $22 this year, from $148.50 in 2021, making it one of the largest annual increases in history. Half of that, $11, was attributed to the potential costs of covering Aduhelm at its original $56,000 price. Becerra’s action came after a number of prominent Democratic senators urged the Biden administration to take immediate action to reduce rising drug costs for seniors. Democrats’ promises to lower drug prices are stalled in Congress, along with the rest of President Joe Biden’s massive social agenda legislation.
Biogen acknowledged that the high cost of its medication had become a barrier to uptake in announcing the price reduction just days before the Christmas holidays.
“Too many patients are not being offered Aduhelm because of financial considerations, and as a result, they are progressing beyond the point of benefiting from the first treatment to address an underlying pathology of Alzheimer’s disease,” CEO Michel Vounatsos said at the time. “We recognize that this challenge must be addressed in a way that is perceived to be sustainable for the U.S. healthcare system.”
Aduhelm is currently covered by Medicare on a case-by-case basis. The agency is expected to issue an initial coverage decision later this week, but the process of finalizing it can take months.
High-cost drugs typically have the greatest financial impact on patients suffering from serious diseases such as cancer, rheumatoid arthritis, or multiple sclerosis. However, with Aduhelm, the pain would be shared by all Medicare recipients, not just Alzheimer’s patients who required the drug.
As a result, the drug has become a case study of how a single costly treatment can affect government spending and household budgets. People who do not have Alzheimer’s would not be protected from the cost of Aduhelm because it is significant enough to affect their insurance premiums.
Alzheimer’s is a progressive neurological disease with no known cure that affects approximately 6 million Americans, the vast majority of whom are Medicare-eligible.
Aduhelm is the first Alzheimer’s drug in nearly two decades. It does not cure the life-threatening condition, but the FDA determined that its ability to reduce clumps of plaque in the brain is likely to slow dementia in its early stages. However, many experts believe that the benefit has yet to be clearly demonstrated.