CMS official says Medicaid must cover Aduhelm as industry awaits national coverage decision

Dollar bill with a hole in Washington's face on it and the word "Medicaid" in its place
Medicaid must cover Aduhelm, but the national coverage decision could change that. (zimmytws/GettyImages)

The Centers for Medicare & Medicaid Services is advising state Medicaid programs that they must cover Biogen and Eisai's controversial Alzheimer's drug Aduhelm as an outpatient drug.

Biogen participates in Medicaid's drug rebate program. John Coster, director of pharmacy in CMS' Center for Medicaid and CHIP Services, said during a conference hosted this week by America's Health Insurance Plans that states can set their own medical eligibility criteria for the drug.

"As I've said to states and others who have asked, Aduhelm is currently a covered outpatient drug," Coster said. "The manufacturer is a participating labeler in the program. The states can develop medical necessity criteria around that drug, or any other drug, but it is a covered outpatient drug."

The Food and Drug Administration approved Aduhelm through the accelerated path, a decision that immediately drew derision from critics who argue that the drug hasn't proven that it even works. The approval was followed up by the news that Biogen would price the therapy at $56,000.

RELATED: Blues plans pass on including aducanumab on formulary

Later in the session, Coster echoed his earlier comments, saying, "Currently, the requirements are that if a drug is a covered outpatient drug, it has to be covered subject to a state's medical eligibility criteria."

The last shoe to drop will be CMS' ruling on a national coverage decision. All eyes are on the agency's determination in Medicare as the vast majority of likely Aduhelm patients are Medicare patients.

One analysis estimates that 80% of Medicare beneficiaries would be eligible to take Aduhelm due to the FDA's broad approval. CMS began the process for a national decision in mid-July.

An analyst's note from Cowen notes that CMS is looking to establish a broad policy on similar Alzheimer's drugs with this decision, which could significantly impact other drugmakers. Eli Lilly, which has its own beta amyloid-targeting therapy in the works, has opposed this.

A significant number of Medicare beneficiaries are also dually eligible for Medicaid, so the decision will also impact that program. It's unclear at present how large of an effect that could be.

"We have to see how that evolves over time," Coster said.