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Medicare is about to make its most important coverage decision in years. Here’s how people with Alzheimer’s and others might be affected.

A controversial new drug is roiling the medical community and driving up Medicare premiums

Charles Flagg, who has Alzheimer's disease, receives an infusion as part of a clinical trial for aducanumab, also called Aduhelm, at Butler Hospital in Providence, R.I. (Charles Krupa/AP)

It is a firestorm rarely seen in the world of drug regulation.

Since June, when the Food and Drug Administration approved a controversial Alzheimer’s drug, critics have denounced the move, saying there is not enough evidence to show the drug works. Some have demanded that the agency take the drug off the market, citing potentially dangerous side effects. But the FDA and others have insisted the treatment might provide desperately needed help to patients with a fatal disease for which there are few alternatives.

In the marketplace, the drug, called Aduhelm, has fallen flat. Several big hospitals have refused to offer it, and some insurers have declined to cover it.

Now, the battle has moved to Medicare, the federal health program for older Americans. Officials this week are expected to announce a preliminary decision on whether Medicare will cover the drug. The ruling will have a big impact on how much of the medication is used, whether private insurers, which often follow Medicare’s lead, pay for it, and how similar drugs coming down the pike will be treated.

But Aduhelm’s impact already has gone beyond Alzheimer’s patients.

In November, the Centers for Medicare and Medicaid Services, which runs the health programs, announced they would raise the standard monthly premium for Part B, which covers outpatient services such as visits to the doctor, by a record dollar amount. Officials said that move, which went into effect Jan. 1, was partly because Medicare needed to have the funds to cover the potentially high costs of Aduhelm.

On Monday, Health and Human Services Secretary Xavier Becerra said he has told Medicare officials to “reassess” the Part B premium, given that its manufacturer, biotech giant Biogen, in December reduced the price of Aduhelm to $28,200 from its $56,000 initial price. “With the 50% price drop of Aduhelm on January 1, there is a compelling basis for CMS to reexamine the previous recommendation,” Becerra said in a statement. The department did not indicate when changes in premiums, if they occur, will be announced.

What is Aduhelm, and what does it do?

Aduhelm is a monoclonal antibody, a man-made protein that targets a sticky substance in the brain, called amyloid beta, which some scientists believe causes the memory-robbing disease. The drug is designed to trigger an immune response that reduces amyloid plaques.

No one believes Aduhelm, which is an intravenous treatment administered monthly, can cure Alzheimer’s disease or reverse it. The debate involves whether the medication slows cognitive decline. Other Alzheimer’s drugs treat symptoms but don’t change the course of the disease.

Almost three years ago, Biogen halted two late-stage clinical trials after experts concluded the drug would not meet the goals of slowing cognitive decline and functional impairment. Several months later, in a surprise move, the company released additional data, asserting the drug could be effective at a high dose.

The FDA’s panel of outside scientific advisers rejected the argument in 2020, recommending against approval. When the FDA nevertheless approved the medication, the agency said the decision was not based on clinical outcomes but rather on indications the drug sharply reduced brain amyloid. The agency said there was a “reasonable likelihood” that reduction would benefit patients. The FDA initially said all Alzheimer’s patients could receive the drug then narrowed that to people with mild cognitive impairment or early-stage disease.

About 6.2 million people in the United States have Alzheimer’s disease, according to the Alzheimer’s Association. But the number is much smaller for those with early-stage or mild disease. Biogen has estimated that only about 50,000 patients may initiate treatment in 2022, if Medicare and other insurers cover Aduhelm.

What happened after approval?

Some experts, patients and advocacy groups such as the Alzheimer’s Association praised the approval as a major step forward. Other experts opposed the action, saying amyloid-busting drugs have a long history of failure and noting Aduhelm can cause brain swelling and bleeding.

The debate is heating up again as the Medicare decision nears.

“This drug is an empty promise,” said Matthew S. Schrag, a vascular neurologist at Vanderbilt University Medical Center, which is not offering Aduhelm. “It’s very unlikely to provide beneficial effects.”

Ronald C. Petersen, director of the Mayo Clinic Alzheimer’s Disease Research Center, said in an email he hopes Medicare provides some coverage “so that patients with Alzheimer’s disease will have the option to take the drug, after appropriate counseling, without an excessive financial burden. This will allow the field to determine if the drug is clinically effective.”

People on both sides of the debate were appalled by Biogen’s $56,000 launch price. In December, the company cut the price to $28,200 a year.

“Too many patients are not being offered the choice of Aduhelm due to financial considerations and are thus progressing beyond the point of benefiting from the first treatment to address an underlying pathology of Alzheimer’s disease,” Michel Vounatsos, Biogen’s chief executive, said at the time.

Critics say the price is still too high. The Institute for Clinical and Economic Review, a nonprofit that assesses the value of new therapies, has said Aduhelm would be cost-effective only if priced at $3,000 to $8,400 a year.

Several medical centers — including Cleveland Clinic, Johns Hopkins, the University of California at Los Angeles and the University of Michigan — have said they are not offering the drug because of a lack of convincing evidence of effectiveness, according to the medical news site Stat. The drug, once considered a potential market blockbuster, generated a mere $300,000 in revenue in the third quarter of last year, according to Biogen.

What is Medicare doing?

In July, CMS initiated a national coverage determination on whether Medicare should cover Aduhelm and other anti-amyloid monoclonal antibodies in development. CMS said a draft decision would be issued by Wednesday, with a final call in April.

Usually, Medicare covers FDA-approved drugs without question. It is highly unusual for CMS to launch an inquiry into coverage of a drug.

“It’s a pretty darn unique situation,” said Sean R. Tunis, former chief medical officer of CMS. “There have not been very many FDA decisions that have been this extensively questioned both on process and on substance. Not just by the payer community, which you would expect to be skeptical, but by academic medical centers” and physicians.

The FDA and CMS use different criteria to assess medical treatments. The FDA determines whether a drug is “safe and effective,” while Medicare decides whether it is “reasonable and necessary.”

Medicare is not supposed to consider cost — but that might be hard to ignore considering the program’s potential exposure. The vast majority of potential Aduhelm recipients are on Medicare. While some treatments, including cancer drugs, are more expensive, they are prescribed for fewer patients.

Mark McClellan, who headed the FDA and CMS during the George W. Bush administration, said he didn’t expect Medicare to take the almost unprecedented step of declining coverage for an FDA-approved drug. And Medicare might follow the FDA label and cover the treatment for everyone with early-stage disease, he said.

But if CMS chooses to cover the drug with restrictions, it has several ways to do so, McClellan said. The agency could limit which patients are eligible, which doctors can prescribe it and where it can be administered. CMS could restrict use to settings with extensive Alzheimer’s experience, such as memory clinics. Or it could say only doctors with specialized training and the capability of monitoring patients closely for side effects can prescribe it, McClellan said.

Medicare also could decide to cover the drug only for patients in clinical studies or tracked by registries established by hospitals or other organizations. This “coverage with evidence development” approach is designed to produce additional data on whether coverage should be continued. Such a move could have the effect of limiting the number of doctors willing to prescribe the medicine because it imposes time-consuming data requirements.

George Vradenburg, chairman and co-founder of the advocacy group UsAgainstAlzheimer’s, said Medicare restrictions could “limit access to this class of drugs to the wealthy.”

Some physicians predict that several medical centers won’t offer the drug even if Medicare covers it.

“Aduhelm presents at least three issues, and cost is just one,” said Schrag, of Vanderbilt. “I think the issues of efficacy and safety are going to remain, regardless of what happens with Medicare.”

But others say Medicare coverage would spur a big increase in demand for the drug — and send hospitals and clinics racing to accommodate it.

The CMS decision could affect other amyloid-targeting drugs being tested by drugmakers Eli Lilly, Roche and Biogen and its Japanese partner, Eisai. “The public data on these 4 antibodies shows they modify [Alzheimer’s disease] pathology and begin to slow [Alzheimer’s] symptoms for the first time in history,” Dennis J. Selkoe, a neurologist at Harvard Medical School who has long studied amyloid, said in comments to the CMS docket last summer.

What does all this have to do with Medicare premiums?

CMS, in announcing the standard monthly premium for Medicare Part B for 2022, said about half of the $21.60 increase was for a cushion for possible Aduhelm costs. At the time, CMS had not decided on its coverage policy, but agency actuaries typically take a conservative stance in estimating expenses.

The new premium is $170.10, up from $148.50 in 2021. Under law, Medicare beneficiaries pay 25 percent of the costs for projected Medicare spending in Part B while taxpayers pay the rest.

Monday’s announcement by Becerra that he has told Medicare officials to reevaluate 2022 Part B premiums suggests those rates will be reduced.

In any case, the Aduhelm episode shows how high drug costs can affect premiums, experts said.

“The potential cost impact of Aduhelm shows exactly why people are worried about drug prices,” said Tricia Neuman, senior vice president of the Kaiser Family Foundation.

If Medicare covers the drug, patients will be responsible for a 20 percent co-payment. Given the drug’s $28,200 price tag, that amount could be daunting for Medicare beneficiaries, who have a median income of less than $30,000, Neuman said.