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Medicare rejected a controversial Alzheimer’s drug. Participants still ended up paying for it.

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A sign for biotechnology company, Biogen, Inc. is seen on a building in Cambridge, Massachusetts, on March 18, 2017.

Biogen initially priced its Alzheimer’s treatment drug at $56,000 a year. That figure was factored in when Medicare set Part B premiums late last year. Dominick Reuter/AFP via Getty Images

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Last month, President Joe Biden announced the cost of Medicare Part B premiums would drop for the first time in more than a decade. Part B covers visits to doctors and hospitals, as well as infusions or injections that have to be administered. 

Medicare raised premiums late last year in preparation to cover a new drug called Aduhelm, developed to treat Alzheimer’s disease. But there were problems with Aduhelm — problems big enough that Medicare announced in January it wouldn’t fully cover the drug after all. 

Many Medicare recipients wish the program’s recent decision to drop Part B premiums had come sooner.

Aduhelm is administered directly into the veins and is meant to clear away sticky plaque that builds up in the brains of people with Alzheimer’s. Its maker, Biogen, originally set its price at around $56,000 a year. That was factored in when Medicare set premiums late last year for millions of Americans on Medicare Part B — which also affects those who don’t have Alzheimer’s, like Linda Worden of Houston.

In 2022, her premiums went up more than $20 a month to $170.10, said Worden, who suffers from Type 2 diabetes, hypothyroidism and mental illness. She also lives on a fixed income.

“I am someone that has to count the squares of toilet paper just to keep up with my budget,” she said.

Worden is troubled by the process that led to premiums being hiked in the first place.

The evidence that Aduhelm works was — and still is — in question, according to Stanford neurology professor Michael Greicius.

“There were two sorts of equally-powered, equally-sized studies. One showed no difference whatsoever, and one showed a mild difference in this clinical outcome measure,” Greicius said. “It was pretty clear that it wasn’t a stirring, clear-cut statistical effect.”

Aduhelm also appeared dangerous to some patients because of the side effects, including brain swelling, Greicius added.

Even so, the Food and Drug Administration fast-tracked its approval last year, in part, because Alzheimer’s is a progressive neurological disease that still has no cure and few treatments.

The FDA’s decision was controversial, said Sean Tunis, senior fellow at Tufts Medical Center and a former chief medical officer at Medicare.

“The FDA has stated publicly that this drug was approved based on limited evidence precisely because the unmet need was so enormous,” he said. “There hadn’t been a new therapy approved in more than 15 years.”

But even after the FDA approval, Medicare decided to do its own review, which Tunis says is unusual.

“For most drugs that get approved by the FDA, Medicare just pays the manufacturer’s price. There’s no Medicare review of the clinical evidence or any kind of a second look, if you will,” said Tunis.

During that review, Biogen dropped the price by half to $28,200.

When asked for comment, Biogen referred Marketplace to a December 2021 press release, in which the company said the goal was to lower “out-of-pocket expenses for patients” and reduce what it called “potential financial implications for the U.S. healthcare system.”

Ultimately, Medicare decided not to cover Aduhelm, with a limited exception for clinical trials.

If Biogen had priced this drug differently to begin with, “we could have had a very different sequence of events,” with potentially lower premium costs and without Medicare conducting its own review, according to Washington University law professor Rachel Sachs.

In January, U.S. Health and Human Services Secretary Xavier Becerra asked if it’s possible to adjust what Medicare recipients pay in the middle of the year, Sachs said.

“It was determined just that there’s no mechanism to do it. There’s no way to change the premiums mid-year and to return the money to seniors,” said Sachs.

Meanwhile, Biogen has co-developed another Alzheimer’s drug called lecanemab.

Linda Worden is worried about what that might mean for premiums again.

“I’m happy to participate my dollars to help someone. But this is just infuriating,” she said. “I’m not angry at Medicare. I’m just so tired of the greed.”

The FDA told Marketplace that the agency generally cannot comment on pending or potential new drug applications.

But Biogen and its partner on the project, Eisai, announced the FDA is expediting its review of lecanemab through its accelerated approval pathway, with a decision expected in January.

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