Senators promote Amgen’s claim with Medicare
In a boost for troubled Amgen Inc., the Senate called on federal Medicare regulators to reassess a recent decision to restrict coverage of the company’s top-selling anemia drugs, sending shares of the Thousand Oaks-based biotech giant up nearly 2%.
The Senate’s nonbinding resolution, approved without debate Tuesday, criticized Medicare’s decision in late July to sharply restrict coverage of Amgen’s anti-anemia treatments, Epogen and Aranesp.
“The Centers for Medicare and Medicaid Services should begin an immediate reconsideration” of its decision “as soon as feasible and provide a briefing to Congress,” said the resolution co-sponsored by Sens. Arlen Specter (R-Pa.) and Frank R. Lautenberg (D-N.J.).
The Medicare decision dealt a blow to the biotech giant’s sales and profit and partially led to the layoff and buyout of 12% to 14% of its workforce, which the company announced last month.
In addition, it has prompted a large-scale lobbying effort by Amgen to get the federal agency to alter or reverse its decision.
Amgen has publicly criticized Medicare’s decision as “incompatible with good clinical practice” and is appealing the move.
Analysts called the news positive for Amgen, the world’s top-selling biotech firm.
Christopher Raymond, biotech analyst for investment firm Robert W. Baird, called it an “indicator that Medicare’s policy could be reversed” but said it remained to be seen what, if anything, may come from the news.
To boost its case, Amgen is waging an unusually public fight in Washington.
It has hired top-flight lobbyists with relationships to senior legislators of both major parties and has canvassed Capitol Hill looking for help to put pressure on the agency.
Nonetheless, Amgen faces a steep challenge. In late July, Amgen representatives met with aides to Health and Human Services Secretary Mike Leavitt to personally seek his help.
However, Leavitt, whose department oversees the Medicare agency, concluded that the decision was strongly supported by research and agency scientists, and he was unmoved by the appeal.
Amgen has had better luck convincing influential cancer doctors. In a statement last week, the American Society of Clinical Oncology said the new guidelines interfere with physicians’ ability to treat patients with the blood disorder anemia, saying the restrictive guidelines could ultimately harm those who need help.
The drugs generated nearly $7 billion in sales for Amgen last year, almost half the company’s revenue.
In the coming weeks, the company is expected to announce more details about the layoffs and how many employees at its Thousand Oaks headquarters will be affected.
Amgen stock gained 98 cents Wednesday, closing at $52.32.
