Medicare premiums are going up in price across the board thanks in part to the anticipated cost of covering Aduhelm — but that doesn’t mean Medicare coverage for the $56,000-per-year drug will be guaranteed.
Your insurance premiums may be going up next year by as much as $21.60, marking the largest increase since 2016. On Friday, November 12th, the U.S. government announced a 14.5-percent cost increase to Medicare Part B — more than double their previous estimate.
The Centers for Medicare and Medicaid Services (CMS) attribute this drastic increase to the pandemic as well as the cost of the new anti-amyloid drug Aduhelm. According to Medicare officials, approximately half of this increase is attributed to Aduhelm, which would cost $56,000 per year out of pocket.
The anti-amyloid drug was approved earlier this year, becoming the first Alzheimer’s drug designed to slow the progression of the disease rather than just treat its symptoms—though this milestone was mired in controversy due to unclear data around the drug’s efficacy. An independent analysis from the Institute for Clinical and Economic Review previously estimated that Aduhelm should cost no more than $8,400 if it could successfully halt dementia progression.
But drugmakers Biogen set Aduhelm’s price at a hefty $56,000 per year. “The increase in the Part B premium for 2022 is continued evidence that rising drug costs threaten the affordability and sustainability of the Medicare program,” CMS Administrator Chiquita Brooks-LaSure said in a statement.
The CMS also stated that the concurrent increase in social security payments would more than offset the price of this increased deductible. But this increase will affect the more than 62 million people enrolled in Medicare.
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Part B coverage includes physician and outpatient hospital services. Since Aduhelm could be administered in a doctor’s office, it may fall under the Part B premium. Aduhelm severely underperformed its sales projections, due to a number of factors, including a lack of buy-in from some physicians, clinics and hospitals, and the ongoing lack of clarity around insurance coverage of the drug. Medicare is taking a case-by-case approach when determining coverage, and “is expected to issue a draft national coverage decision on reimbursing the class of therapies that includes Aduhelm in January,” according to MarketWatch. Unless Aduhelm sales increase significantly, part of this premium increase may go to waste.
“It is hard to envision a scenario that would lead to lower out-of-pocket costs, since there’s little evidence that Aduhelm has a significant effect on cognitive decline,” said Tricia Neuman, senior vice president of the Henry J. Kaiser Family Foundation and executive director of its program on Medicare policy.
According to David Whitrap, vice president of communications and outreach from the Institute for Clinical and Economic Review, the increased premium does not lower out-of-pocket costs for Aduhelm. However, Whitrap noted that a tentative agreement made by the Congressional Democrats on Medicare drug pricing would limit out-of-pocket costs for Medicare drugs to $2,000 — meaning that the majority of Aduhelm’s costs would be covered.
Rachel Sachs, professor of law at Washington University in St. Louis expressed dissatisfaction with the increase in Medicare premiums in a Twitter post: “So, what’s to blame for the increase in Part B premiums?,” she asked. “One important factor is pharmaceutical companies who think they can force Medicare and seniors nationwide to pay whatever price they demand, for drugs with little clinical value.”