HHS announces projected Part B premium price drop due to Aduhelm pricing

HHS Secretary Xavier Becerra

Photo: Drew Angerer/Getty Images

Medicare beneficiaries are expected to see lower Part B premiums in 2023 due to the lower price of Alzheimer's drug, Aduholm.

Today, Department of Health and Human Services Secretary Xavier Becerra said 2002 Medicare Part B premiums should be adjusted downward due to fact that the drug manufacturer reduced the price of Aduholm from $56,000 per year to $26,200 per year.

Due to the legal and operational hurdles of lowering costs midstream, the reduction will be incorporated into Medicare premiums for 2023.

Becerra's decision to lower Medicare beneficiaries' premium payments came after he received a report from the Centers for Medicare and Medicaid Services concluding that cost savings from lower-than-expected Medicare Part B spending on Aduhelm can be passed along to Medicare beneficiaries by lowering the 2023 Part B premium.

It is expected that the 2023 Part B premiums will be lower than in 2022, but a final determination will be made later this fall after CMS has assessed other current and projected Medicare Part B costs.

The Part B standard monthly premium increased from $148.50 in 2021 to $170.10 in 2022, due in part to spending trends driven by COVID-19 and uncertain pricing and utilization of Aduhelm, CMS said.

Despite the increase, most people with Medicare saw a net increase in Social Security benefits due to a higher than usual Cost of Living Adjustment in 2022, CMS said.

WHY THIS MATTERS

The use of Aduhelm has been controversial due to its price tag and questions over whether results from clinical trials establish the drug as effective.

In January, CMS announced it would limit its use only to those enrolled in qualifying clinical trials. CMS finalized that policy in April, limiting coverage for Aduhelm and for any future monoclonal antibodies against amyloid. Aduhelm is the brand-name for the drug aducanumab, the only FDA-approved monoclonal antibody treatment to target amyloid in the brain for the treatment of Alzheimer's disease. 

AHIP, which represents insurers, agreed with CMS, saying two clinical trials for Aduhelm were stopped because the drug did not help patients, according to an August 2021 letter it sent to CMS.

The Campaign for Sustainable Rx Pricing (CSRxP) said that despite manufacturer Biogen's 50% price cut, Aduhelm still carried "an egregious price tag" for an unproven brand-name treatment.

However, UsAgainstAlzheimer's and PhRMA contended it was wrong to deny patients coverage to a class of drugs.

THE LARGER TREND

Effective January 1, drugmaker Biogen cut the wholesale acquisition cost of Aduhelm by 50%, from an estimated $56,000 a year to $28,200 a year.

Earlier this year, Department of Health and Human Services Secretary Xavier Becerra instructed CMS to reassess the 2022 Part B premium amount in response to a price reduction for Aduhelm.

When calculating Part B premium, CMS builds in a reserve to ensure the Medicare Supplementary Medical Insurance (SMI) Trust Fund remains adequately financed for the year. 

In 2022, CMS appropriately built in a reserve to ensure the SMI Trust Fund could cover the potential costs of Aduhelm and similar drugs. At the time CMS announced the premium in fall 2021, Aduhelm cost an average of $56,000 per year, and CMS had not yet issued a National Coverage Determination. 

After the 2022 Medicare Part B premium was set, the manufacturer of Aduhelm reduced the price to an average of $26,200, and CMS finalized Medicare coverage with evidence development, meaning conditioned through a clinical trial.

ON THE RECORD

"After receiving CMS's report reevaluating the 2022 Medicare Part B premiums, we have determined that we can put cost savings directly back into the pockets of people enrolled in Medicare in 2023," Becerra said. "We had hoped to achieve this sooner, but CMS explains that the options to accomplish this would not be feasible."

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org