Price Cut on Controversial Alzheimer's Drug Aduhelm Could Lead to Lower Medicaid Premium

U.S. Health Secretary Xavier Becerra's order to Medicare to reassess a big premium increase, due mainly to an expensive new Alzheimer's drug, could lead to lower Part B costs later this year.

Becerra's recommendation came days after drug maker Biogen slashed the price of Aduhelm by about half, from $56,000 a year to $28,200 a year. The cut could lead to a reduction later in the year for more than 50 million Medicare recipients who pay the monthly $170.10 Part B premium for outpatient care

Becerra's recommendation also came after Democratic senators urged the Biden administration to cut rising drug costs for seniors.

The standard Part B premium is rising about $22 this year and is one of the biggest annual increases ever. About $11 of the cost was attributed to the potential costs of having to cover Aduhelm at its original price.

"With the 50 percent price drop of Aduhelm on Jan. 1, there is a compelling basis...to reexamine the previous recommendation," Bercerra said in a statement provided to the Associated Press.

Medicare is currently covering Aduhelm on a case-by-case basis. The financial impact of high-cost drugs falls directly on patients with serious diseases, such as cancer, rheumatoid arthritis or multiple sclerosis. With Aduhelm, the cost would be spread among Medicare recipients, not just Alzheimer's patients needing the drug.

"Too many patients are not being offered the choice of Aduhelm due to financial considerations and are thus progressing beyond the point of benefitting from the first treatment to address an underlying pathology of Alzheimer's disease," Biogen CEO Michel Vounatsos said.

Later this week, Medicare is expected to issue an initial coverage decision, but the process of finalizing it can take months.

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.

That's turned the drug into a case study of how one pricey treatment can swing the needle on government spending and impact household budgets. People who don't have Alzheimer's would not be shielded from the cost of Aduhelm, since it's big enough to affect their premiums.

Alzheimer's is a progressive neurological disease with no known cure, affecting about 6 million Americans, the vast majority old enough to qualify for Medicare.

Aduhelm is the first Alzheimer's medication in nearly 20 years. It doesn't cure the life-sapping condition, but the Food and Drug Administration determined that its ability to reduce clumps of plaque in the brain is likely to slow dementia in its earlier stages. However, many experts say that benefit has not been clearly demonstrated.

The Associated Press contributed to this report.