Health and Human Services Secretary Xavier Becerra announced on Friday that Medicare premiums would be adjusted for 2023 following a report that found the cost of including a new Alzheimer’s medication into the program had been overestimated.
“Today, U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra announced that Medicare Part B premiums paid by Medicare beneficiaries for 2022 should be adjusted downward to account for an overestimate in costs attributable to the inclusion of new Alzheimer’s drug Aduhelm within the Medicare program for reimbursement,” the Health and Human Service Department said in a statement.
HHS cited “legal and operational hurdles” as the reason premiums will not be adjusted this year. Becerra acknowledged that HHS had hoped to achieve this lowered premium sooner, but said it was not “feasible.”
“CMS and HHS are committed to lowering health care costs – so we look forward to seeing this Medicare premium adjustment across the finish line to ensure seniors get their cost-savings in 2023,” said Becerra.
Aduhelm, created by Biogen, became the first Alzheimer’s medication approved by the Food and Drug Administration in almost 20 years when it was granted approval last June.
The drug has since faced scrutiny over its actual efficacy in treating Alzheimer’s disease as well as its sky-high cost. When the drug was approved, it initially cost $56,000 a year. However, Biogen announced in December that it was halving the cost down to $28,200 a year, or about $2,170 per monthly infusion for patients.
In January, Becerra ordered Medicare to “reassess” the proposed premium increase following Biogen’s announcement.
“With the 50 percent price drop of Aduhelm on January 1, there is a compelling basis for CMS to reexamine the previous recommendation,” he said at the time.
HHS’s decision comes after the Centers for Medicare and Medicaid Services (CMS) released a report that found the costs saved from lower than expected spending on Aduhelm could be passed to Medicare beneficiaries in 2023.
Last month, Medicare announced that it would be limiting coverage of Aduhelm to only include clinical trial patients. HHS did not mention this decision in its announcement, though it may have contributed to the lower than expected costs for Aduhelm, on top of Biogen lowering its price.
Medicare’s Part B monthly premium jumped by $21.60 in 2022, the largest increase in the program’s history, rising from $148.50 in 2021 to $170.10. Part of this increase was to build up a reserve in case Medicare started covering Aduhelm.
After Medicare decided to limit coverage, activists had hoped that the premium would be lowered, with many arguing that the premium should not have been increased by so much in the first place.
Max Richtman, president of the National Committee to Preserve Social Security and Medicare, told Bloomberg Law last month that it was “unlikely” that Aduhelm would have impacted Medicare so “dramatically.”