Medicare says, “Maybe We’re Charging Too Much”

When Medicare announced a 14.5% increase in 2022 Part B premiums there was shock and outrage. That’s more than double the already skyrocketing inflation rate in the U.S. Medicare said the hefty increase was necessary because they expected a large percentage of Medicare patients would be prescribed a controversial new Alzheimer’s drug approved by the Food and Drug Administration—Aduhelm—which costs $56,000 per year. And since Adulhelm has to be administered by a doctor, it’s covered under Part B.


Now, Medicare is rethinking that premium increase and is considering a smaller one because the landscape has changed since the decision to raise premiums was made late last year.


First, Biogen, the maker of Adulhelm, has agreed to lower the annual cost of the drug by almost half, to $28,200 per year. That means Medicare’s estimate of spending $29 million each year for Adulhelm drops to $14,384,000—a substantial amount Medicare now does not have to cover.


Second, Medicare is listening to concerns from medical experts about how effective Adulhelm is in treating Alzheimer’s and a list of possible side effects. Because of that, Medicare Administrators are completing a national coverage determination to decide whether to pay for Adulhelm treatment.


In the meantime, Medicare has issued a proposal to only cover patients in clinical trials who have the protein in their brain that Aduhelm is designed to target. Those patients also must have mild cognitive impairment or mild dementia. The proposal limits the number of Medicare beneficiaries who can be given Adulhelm, which would also lower the cost to Medicare. The proposal is expected to be finalized later in 2022.

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