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Why is one drug responsible for half of the rising Medicare Part B premiums?


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Medicare beneficiaries may already know that the spike in their 2022 Part B premiums is due in part to the cost of a single drug.

However, why all of the enrollees chose Aduhelm – a controversial new drug designed to slow cognitive decline with Alzheimer’s disease – may not be clear. Adding to the confusion is that Medicare itself has yet to officially approve bioinsurance, which comes with an estimated annual price of $56,000 per patient.

Danielle Roberts, co-founder of insurance company Boomer Benefits, said: “Customers are quite upset about the increase and many have asked why.

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Standard monthly premium for Part B, which includes outpatient care and durable equipment, will be $170.10 next year, up $21.60 from $148.50 this year. Medicare Authorized Persons estimated this summer that 2022 premiums will be $158.50.

About half of the increase is due to the potential cost of covering Aduhelm, approved by the Food and Drug Administration in June. It is the first new drug for the disease in nearly two decades and the first to be approved by US regulators to slow cognitive decline in people living with Alzheimer’s disease.

Consent to the drug, manufactured by Biogen, which came despite some objections in the scientific community about its effectiveness and side effects, including swelling and bleeding in the brain. Medicare is expected to issue its coverage decision — that is, whether it will be limited to certain patients under certain conditions — in the spring.

“Medicare coverage decisions aren’t really tied to the price of a drug but rather whether it is recommended for use,” said Juliette Cubanski, deputy program director for Medicare policy at the Kaiser Family Foundation. treat a particular disease or not. “FDA approval is taken as a proxy for ‘this is a recommended product.'”

While Medicare Part D offers prescription drug coverage, some drugs are administered in a doctor’s office — as with Aduhelm, given intravenously — and therefore covered under Part B.

And by law, the Centers for Medicare & Medicaid Services are required to set the annual Part B premium at 25% of the estimated costs incurred by that part of the plan. So, in the calculation for 2022, the agency had to take into account the possibility of covering Aduhelm.

About 6 million Americans have Alzheimer’s disease, a neurodegenerative disease that causes progressive loss of memory and thinking skills, and there is no known cure. It can also wreak havoc on the lives of family and friends of those with the disease.

That’s a staggering number for a drug that hasn’t been proven to be the miracle cure everyone was hoping drug companies would roll out with Alzheimer’s.

Juliette Cubanski

Vice President of Programs for Medicare Policy at Kaiser Family Foundation

Most of these patients are 65 years of age or older and typically enrolled in Medicare, which includes more than 63 million people. In 2017, about 2 million beneficiaries used one or more of the existing Alzheimer’s treatments mentioned in Part D, according to the Kaiser Family Foundation.

The organization’s research found that if just a quarter of those beneficiaries – 500,000 – were prescribed Aduhelm, the total spending on that drug in a year would be nearly $29 billion. By comparison, total Medicare spending on all Part B drugs was $37 billion in 2019.

“That’s a staggering number for a drug that hasn’t been proven to be a miracle cure for which everyone was hoping the drug companies would find Alzheimer’s,” Cubanski said.

She also said the situation – an expensive drug that has to be covered by Medicare and ends up increasing premiums – could happen again.

“There’s no mechanism to prevent that from happening,” Cubanski said. “Drug companies invest billions of dollars in research and development and are always looking for top treatments for any disease, and we want effective drugs to hit the market.”

Additionally, despite a proposal in Congress that would allow Medicare to negotiate prices for some drugs starting in 2025, new biologics like Aduhelm will have 13 years before they’re likely to be negotiated on a budget. price. Biogen, meanwhile, has said it won’t raise the price of the drug for four years.

Proposed parliamentary changes – which included in the Better Rebuilding Act – would also limit beneficiaries’ out-of-pocket spending on Part D drugs to $2,000 per year. However, since Aduhelm will be distributed under Part B, that limitation will not apply.

Beneficiaries typically pay 20% of Part B services unless they have additional insurance or receive that coinsurance (Medigap policy) or offer another copay and a maximum out-of-pocket (a Medicare Advantage plan).

David Lipschutz, deputy director and senior policy attorney for the Medicare Advocacy Center, said the Aduhelm situation highlights the ripple effect that expensive drugs can have.

“Even the ability of Medicare to provide coverage for Aduhelm raises Part B premiums,” he said.

It’s likely that if Medicare approves the drug’s coverage, the plan won’t spend as much as anticipated.

“It’s possible that doctors may not be enthusiastic about prescribing it, given the side effects that were observed in both pre-approval clinical trials and since then among patients,” Cubanski said. speak. “That could lead to less consumption than the manufacturer expected.”

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