Seniors, overcharged by billions on Medicare, won’t see ’22 refund

Patrick Malone & Associates P.C. | DC Injury Lawyers
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Patrick Malone & Associates P.C. | DC Injury Lawyers

Tens of millions of seniors, hit by one of the largest increases in recent memory of their monthly Medicare charges due to a prescription drug regulatory debacle, will not see a penny refunded this year on what amounts to a federal overcharge.

This will occur, even though it was floated as a possibility and the cause of their health care coverage increase didn’t materialize.

The 2021 embarrassment for federal officials, instead, may turn into inflation anticipation, the federal Centers for Medicare and Medicaid Services (CMS) has said.

Let’s wind the clock back to see why seniors got hit with an odious $116 annual overcharge in their Medicaid premiums. Blame it on the dubious approval by the federal Food and Drug Administration of the Alzheimer’s targeted drug Aduhelm. (This blog, by the way, has tracked this nightmare for months, with posts that can be read here and here and here and here and here).

The medication’s maker, Biogen, took a tortured path to winning FDA approval of a medication that even its most ardent backers conceded had limited effect, at best, on patients with early Alzheimer’s. The FDA overrode its own independent, elite experts — and brought on itself a hailstorm of criticism — for expediting Aduhelm’s approval based on shaky evidence from clinical trials.

Biogen then stuck it to the public, setting a nosebleed price on the drug — $56,000 annually for the medication alone, not to mention that it requires administration in a doctor’s office, clinic, or hospital, and that patients taking it must undergo regular brain scans. That’s because the drug has serious side effects, including reported cases of brain swelling and bleeding.

Insurers, the Department of Veterans Affairs, major hospitals and academic medical centers, and leading specialists assailed the FDA approval of Aduhelm and declined to use it. CMS eventually took the rare position that it would cover the drug’s use only in clinical trials. Biogen slashed its announced price for the drug, which tanked below the lowest sales expectations of the company, leading to employee layoffs and a major corporate retrenchment.

But Medicare officials, in their season of rate setting late last fall, said they had no choice but to factor in billions of dollars in potential spending on Aduhelm for seniors, especially because the agency typically pays for drugs approved by the FDA.

The reluctant initial spike in monthly Medicare charges helped agency officials stiffen opposition to paying for the drug, except on a limited basis. When it came to dealing with the excess money collected, though, CMS officials said they slid into major complications, including the logistics of paying refunds to just under 40 million seniors and how much time and resources that would take. It was unclear if the agency had the legal authority to refund money. And internal experts said the precedent set in this instance could haunt the agency, if politicians in the future found various reasons why, in the middle of the year, CMS should pay a Medicare refund.

Instead, CMS and its uber boss, Xavier Becerra, chief of the sprawling Health and Human Services agency, have said the excess sum will be factored into 2023 Medicare rates. Those look at this point to be the same or lower — though it is impossible to predict what the exact figures will be months from now, especially with inflation taking a chomp out of Americans’ finances.

Gee, so ~$3.5 billion flies out of the pockets of older adults, many of whom live on fixed incomes and super tight budgets, and federal officials offer a pokey, “promises, promises …” Cynics, of course, will recall the late, great GOP Sen. Everett Dirksen, who opined of federal spending that “A billion here, a billion there, and pretty soon you’re talking real money.”

Not good. In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damage that can be inflicted on them by dangerous and bankrupting drugs. We regular folks are taking an unacceptable, double-barreled shot of nonsense — yet again — from Big Pharma and federal agencies that are supposed to look after our best interests.

Congress must step up its game, exponentially, to tell Americans whether, as critics say occurred, FDA regulators got too cozy with Biogen officials. Did they let their hearts and not the evidence determine whether a weak (at best) drug response to the tragic outcomes of Alzheimer’s really serves the public well? Taxpayers also need lawmakers to dig in and demand proof that the expediting of certain prescription medications by the FDA is a beneficial process — or if it just is good for Big Pharma and its ravenous pursuit of profits.

And good golly, President Biden, Secretary Becerra, FDA chief Dr. Robert Califf — as well as members of Congress — isn’t it past time to get serious about allowing the folks who run Medicare and Medicaid to negotiate with Big Pharma, even on a limited, trial basis, the costs of prescription drugs? The FDA is supposed to be a watchdog chiefly of the quality, safety, and effectiveness of these crucial medications. But who oversees a key component of drugs’ “effectiveness” — their cost and value — and protects us against Big Pharma profiteering?

The Aduhelm case casts a spotlight on how many parts of taxpayer America — whether with Medicare for seniors or Medicaid for the poor, disabled, and chronically ill, or the VA for our military personnel and their families — have giant clout in the market. But they all seem to fall in line like mice behind the FDA piper. With no one then asking: Is this the fair, right price that tens of millions of us should pay for prescription drug?

We have lots of works to do to answer these and many more tough drug policy questions and to answer Americans’ infuriated queries as to how our hard-earned, real money — billions of dollars of it — disappears in a bureaucratic maw.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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