Medicare Shift May Hit Sales of Epogen
Sales of Amgen Inc.’s best-selling drug Epogen would fall if a new Medicare policy, released in draft form Thursday, went into effect, an agency official said.
The proposal called for stricter review of reimbursement claims submitted for Epogen and other changes that would lower Medicare’s payments for the drug, which totaled $1.2 billion in 2002.
An Amgen spokeswoman said the Thousand Oaks company was reviewing the one-page draft and had no comment on its specific provisions.
Epogen treats anemia in dialysis patients and is among the most expensive drugs covered by Medicare. The agency opened a review of its Epogen coverage last fall because it was concerned the drug was overprescribed. Medicare said Epogen payments had more than doubled from $550 million in 1998.
Amgen and its top customers -- the nation’s four largest for-profit dialysis chains -- have contended that Epogen was properly used and have lobbied for policy changes that would increase use of the drug.
Medicare’s proposed changes have to do with the range of blood cell counts, or hematocrits, that Medicare uses to determine a patient’s need for Epogen. Medicare supports the use of Epogen for patients with hematocrits of 33 to 36. The draft policy would expand that range to 33 to 39.
The broader hematocrit range appeared to favor Epogen. But a Medicare official said the strict claims review procedures called for in the proposal would in fact lower overall Epogen use.
Most kidney dialysis patients get their Epogen treatments at dialysis centers, which buy the drug from Amgen or from wholesalers and are reimbursed by private insurance or Medicare. The federal agency approves claims submitted by a dialysis center if the average hematocrit of all patients treated at the center during a three-month period is below 37.5.
The new policy would call for a monthly review of claims on a patient-by-patient basis. A Medicare official said the proposed claims review would be easier to conduct and enforce than the existing procedure, which had allowed big Epogen claims to slip through.
Amgen had lobbied Medicare to institute a six-month average for reviewing claims.
The public has 60 days to comment on the draft; a final coverage policy will be published after that, the agency said.
“This is not good for Epogen,” said Geoffrey Porges, an analyst at Sanford Bernstein & Co. He said a policy change could halt Epogen’s modest single-digit sales growth.
The proposal comes at a bad time for Amgen, which faces lower Medicare reimbursement on Epogen and other key drugs in 2005 as a result of the Medicare Modernization Act, the law giving seniors full prescription drug coverage.
Epogen accounted for nearly 30% of Amgen’s $8.4 billion in revenue in 2003. It has racked up $17 billion in sales since it was launched in 1989.
Amgen shares fell 57 cents to $53.32 on Nasdaq. Medicare posted the draft policy on its website after the market closed.
