More Than Half of Medicare Part B Premium Increase Due to New Alzheimer’s Drug

Aduhelm, the pricey new Alzheimer’s drug is credited with adding about half of the $21.60 per month Medicare Part B cost increase this year.  It’s $56,000-per-patient price tag is responsible for half of the biggest Part B increase (dollar-wise) in the history of the program.  The 14.5% Part B increase set off a contentious uproar from beneficiaries and advocates, including TSCL, because Part B costs continue to grow so much faster than the cost-of-living adjustment, which erodes the buying power of Social Security benefits over time.

TSCL thinks it’s a stretch to justify a premium increase that high, especially in light of the fact that Medicare had not issued a coverage determination for Aduhelm prior to the premium announcement.  Even worse, only a month after the Part B premium increase was announced in November, Aduhelm manufacturer Biogen cut the price of its drug by about half, to $28,200 after facing slower than expected sales with complaints that the high cost was not worth the benefits.

Meanwhile, all Medicare beneficiaries are still paying about $11.50 more per month for Part B premiums based on the higher price tag.  Legislation, stalled in the Senate, that would reduce prescription drug costs won’t help with the problem.  Although the Build Back Better Act would cap Medicare beneficiaries’ out-of-pocket spending for Part D drugs at $2,000 per year, that provision would not help with the cost of Aduhelm.  The drug is administered intravenously in a doctor’s office and would be billed under Medicare Part B, instead of Part D.  The estimated 20% co-insurance at the new lower price would be $5,640 a year.

Aduhelm, however, is highly controversial in other ways as well.  Although Medicare typically covers drugs approved by the U.S. Food and Drug Administration (FDA), Aduhelm was approved despite objections from the FDA’s own scientific advisory panel, because clinical trials did not demonstrate the drug to be effective.  In addition, side effects, which include brain swelling and bleeding, require close monitoring, and potentially, expensive magnetic resonance imaging (MRI) scans.  The costs of these services due to side effects haven’t been estimated and would drive up Part B costs even further.

TSCL strongly feels that the portion of the Part B premium increase attributable to Aduhelm should be reduced.  TSCL favors rolling back the Medicare Part B premium in 2022 from $170.10 per month to roughly $158.50, the amount that the Medicare Trustees estimated the Part B premium would increase without the cost of Aduhelm.

This would protect beneficiaries from unjustified Part B premium costs and would allow Medicare to make a determination based on the true merits of the drug.  Given the high cost of the drug and the serious side effects, it remains to be seen whether physicians will be enthusiastic about prescribing Aduhelm.


Sources:  “FDA’s Decision to Approve New Treatment for Alzheimer’s Disease,” Dr. Patrizia Cavazzoni, Director, FDA Center for Drug Evaluation and Research, June 7, 2021.  “Medicare Urged To Flex Its Power And Slash Back Premium Hike,” Ricardo Alonso-Zaldivar, Associated Press.  “What Retirees Could Expect in 2022,” Mark Miller, Morningstar, December 7, 2021.  “Biogen Halves Price of Alzheimer’s Drug to $28,200,” Amruta Khandekar, Reuters, December 20, 2021.