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U.S. health secretary Xavier Becerra on Monday ordered Medicare to reassess a big premium increase facing millions of enrollees this year, attributed in large part to a pricey new Alzheimer's drug with questionable benefits.
“With the 50 percent price drop of Aduhelm on Jan. 1, there is a compelling basis ... to re-examine 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 to their costs. But Monday's move could open the way for a reduction later in the year.
The U.S. Department of Health and Human Services said it is reaching out to the Social Security Administration, which collects the premium, to examine options.
Medicare's standard premium is rising by about $22 this year — up from $148.50 in 2021 and one of the biggest annual increases ever.
About half of that, $11, was attributed to the potential costs of having to cover Aduhelm at its original $56,000 price.
Because Aduhelm is administered by infusion in a doctor's office, the cost is factored into Medicare's outpatient coverage, not the separate prescription plan that pays for pharmacy medicines.
Becerra's move came after prominent Democratic senators urged the Biden administration to take immediate steps to cut rising drug costs for seniors. Much bigger curbs on drug prices promised by Democrats are hung up in Congress along with the rest of President Joe Biden's massive social agenda legislation.
That bill would cap at $2,000 a year the amount Medicare recipients have to pay out-of-pocket for medicines, require drugmakers to pay the government rebates if they hike prices faster than inflation, and authorize Medicare to negotiate prices for certain medications.
In announcing the price cut just days before the Christmas holidays, Biogen acknowledged the high cost had become a stumbling block to uptake for its medication.
“Too many patients are not being offered the choice of Aduhelm due to financial considerations and are thus 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. health care system.”
Medicare is currently covering Aduhelm on a case-by-case basis. Later this week, the agency is expected to issue an initial coverage decision, but the process of finalizing it can take months.
Medicare said Monday it is reviewing Becerra's request to determine next steps.
Usually the financial impact of high-cost drugs falls most directly on patients with serious diseases such as cancer, rheumatoid arthritis or multiple sclerosis. But with Aduhelm, the pain would be spread among Medicare recipients generally, not just Alzheimer’s patients needing the drug.