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Anticipating Aduhelm’s costs, Medicare plans big jump in premiums

The decision affects Medicare Part B, which pays for health care services typically received outside of institutional settings like hospitals and nursing homes. The planned change will raise premium contributions to Medicare’s reserves by more than $1 billion, reflecting how much Aduhelm could inflate spending if used as widely as some expect.

While the national coverage determination is still being formulated, the program needed to take steps “to provide for a realistic high-cost scenario of Aduhelm coverage,” according to the CMS notice on the premiums and deductibles. The costs will be spread across tens of millions of Medicare beneficiaries who don’t currently need Aduhelm and may never need it.

In one of the most controversial decisions in its history, the Food and Drug Administration approved Aduhelm in June based on the drug’s ability to remove a toxic protein from the brains of Alzheimer’s patients, rather than its effect on cognition. The decision is contentious as trial evidence on the latter point conflicted, with one trial showing a benefit and the other finding none. Outside advisers to the FDA had recommended against Aduhelm’s approval, but were overruled by the agency.

In order for the drug to stay on the market, Biogen must run a confirmatory trial to demonstrate that people taking Aduhelm decline more slowly than those given a placebo. The company has nine years to do so, however.

Without a firm Medicare decision on coverage, Aduhelm has struggled commercially. Biogen recently announced that sales between July and September, the drug’s first full quarter on the market, amounted to just $300,000, suggesting only a hundred or so patients have received the drug to date. Wall Street analysts had forecast third quarter sales of $16 million.

CMS is due to publish a proposed coverage decision in January, followed by a finalized version in April.

Even if Medicare does cover Aduhelm nationally, Biogen may still face calls to cut its price. The watchdog group Institute for Clinical and Economic Review has estimated that, based on the evidence so far, Biogen would need to reduce the drug’s price by up to 95% in order to meet a benchmark used by ICER to balance health benefits with costs.

Meanwhile, concerns about Aduhelm’s side effects, particularly brain swelling, have mounted as the product has started to be used outside of clinical trials. In a Nov. 8 note to clients, RBC Capital Markets analyst Brian Abrahams wrote that the FDA’s adverse events reporting data base had identified four new cases of brain swelling requiring hospitalization, along with four new cases of seizures.

One 75-year-old patient died after experiencing brain swelling following treatment and Biogen is now investigating. It’s not clear whether the swelling, or the patient’s death, were related to Aduhelm.