Amgen falls on new Medicare policy

[okarol]

Amgen falls on new Medicare policy

July 31, 2007

NEW YORK --Shares of Amgen Inc. fell Tuesday after the agency that runs Medicare outlined a new policy which analysts say will sharply limit reimbursements for Amgen's anemia drug Aranesp.

The Centers for Medicare and Medicaid Services established new rules for erythropoiesis stimulating agents, including Aranesp, on Monday. Analysts focused on a rule stating that treatment with ESAs is only necessary for patients with hemoglobin levels less than 10 grams per deciliter.

The World Health Organization defines anemia as a hemoglobin concentration of less than 13 grams per deciliter for men, and less than 12 grams per deciliter for women who are not pregnant. Hemoglobin is a substance found in red blood cells that carries oxygen.

Amgen's Epogen and Johnson and Johnson's Procrit are also ESAs, designed to treat anemia caused by cancer treatment.

Thomas Weisel Partners analyst M. Ian Somaiya said physicians aim to keep hemoglobin levels between 11 and 12 grams per deciliter, and as a result, the new policy could "significantly reduce Aranesp usage." But he expects the policy to be changed.

"The final changes form a fairly tight band on hemoglobin levels, which we believe are unrealistic," he said. "We therefore expect greater clarity from the CMS on this change. The final resolution may lie with the Food and Drug Administration labeling changes for ESA use in chemotherapy patients, which we expect by year-end."

Morgan Stanley analyst Steven Harr said most patients being treated with ESAs have hemoglobin levels above 10 grams per deciliter. He said private health care companies may create reimbursement policies that are less restrictive than the new Medicare policy, however.

ESAs came under scrutiny in March after studies showed the drugs increased the risk of blood clots, strokes, heart attacks and death in patients with kidney diseases. They also increased the risk of death for cancer patients not receiving chemotherapy.

Amgen shares slid $2.04, or 3.6 percent, to $54.15.

http://www.boston.com/business/technology/biotechnology/articles/2007/07/31/amgen_falls_on_new_medicare_policy/

[BigSky]

Only CMS could read the study and screw up the results and do this. 

Only give Aranesp or Epogen to patients with hemoglobin below 10 g/dl

This seemed to start with the "CHOIR" studies which were actually studies done on people who were non-dialysis patients where a hemoglobin target of 13.5 g/dL was established.  That hemoglobin level they went for is FAR higher than the FDA-approved target range (10-12 g/dL) described in the dosing labels for Aranesp or Epogen. 

[livecam]

The new policy which allows treatment for anemia at HGB levels of 10 or lower makes no sense at all.  What it does is to almost guarantee that patients are going to have even less energy and ability to work than they do already.

People just plain can't function normally on such low hemoglobin levels.  Its like a car engine tuned for sea level that suddenly must operate everyday at 15,000 feet.  Yes it works but just barely and it isn't going to win any races.

It seems that after years of barely adequate coverage for dialysis patients that Medicare is almost trying to pull the rug out from under them. 

Less Epo, Aranesp, and Procrit, lower dialysis reimbursement rates, and a higher percentage of treatment costs being passed on to patients doesn't only not make sense, it is cruel.  People who can't afford to are going to feel much worse as a result of this policy change.

Its not nice to kick people when they are down.