Medicare recipients paying $10 a month more in part because HHS overestimated cost of covering Alzheimer’s drug Aduhelm

Medicare recipients would have been paying less this year than they are for Part B premiums if not for an overestimate in the price of covering an expensive new Alzheimer’s drug, Health and Human Services Secretary Xavier Becerra says.

Becerra said this year’s Medicare Part B premium reflects an overestimate by the government in the cost of covering Aduhelm, a drug that was approved despite weak evidence it can slow the progression of the disease.

Becerra said Medicare recipients will see a reduction in the cost of their Part B premiums — but not until next year.

He said it “would not be feasible” to lower the cost of this year’s premiums in the middle of the year because of legal and operational barriers but that “we look forward to seeing this Medicare premium adjustment across the finish line to ensure seniors get their cost savings in 2023.”

Becerra didn’t say how much the premium would be adjusted next year. The premium for 2023 for Medicare’s more than 56 million recipients will be announced in the fall.

Medicare Part B premiums had gone up by $22 a month, to $170.10, for 2022, in part because of the cost of paying for Aduhelm.

The federal Centers for Medicare and Medicaid Services has now limited coverage of Aduhelm to use in clinical trials approved by the Food and Drug Administration or the National Institutes of Health.

It began reassessing the premium increase under pressure by Congress and consumers.

And Biogen, the Cambridge, Massachusetts, company that makes the drug, has cut the cost of Aduhelm in half, to about $28,000 a year.

The federal Medicare agency cited the sharp reduction in the price of the drug and the limitations on coverage in concluding that cost savings could be passed on to Medicare beneficiaries.

In a report to Becerra, the agency said the premium recommendation for 2022 would have been $160.40 a month had the price cut and the coverage determination been in place when officials calculated the figure — about $10 a month less than Medicare recipients are now paying.