The federal agency in charge of Medicare dealt a blow to the drug industry this week by restricting the use of popular anemia drugs, considered by many to be over-prescribed.
Under pressure from patient-advocacy groups, medical societies and lawmakers, the Centers for Medicare and Medicaid Services (CMS) released a "national coverage decision" on its payment policy for anemia drugs used to treat cancer patients.
Until now, physicians could prescribe any dosage amount of anemia drug, namely Amgen's Epogen and Aranesp, and receive reimbursement through Medicare.
Critics said the policy allowed drug makers to give improper incentives to physicians to over-prescribe, and that overuse of the medications has caused further health problems in cancer patients.
The decision, issued Monday, was less stringent than what the agency originally planned but tough enough to annoy the pharmaceutical giant Amgen Inc.
"The coverage restrictions placed on the FDA-approved indication have no scientific basis and are incompatible with good clinical practice," said Dr. Roger Perlmutter, vice president of global research and development at Amgen.
"We are concerned that inappropriately limiting coverage for [anti-anemia drugs] will both increase blood transfusions and severely compromise the high quality of cancer care delivered by physicians."
Epogen and Aranesp and Johnson & Johnson's Procrit are used as alternatives to blood transfusions, but overuse of these drugs carries serious risks, research has found.
The new monitoring policy is significant for patients as well as the financial stability of Medicare, which is projected to become insolvent by 2018. Medicare spends about $5.4 billion a year on anemia treatment for cancer patients.
It spends considerably more on the drugs for patients with kidney disease. For Epogen alone, annual Medicare spending for such patients from 1991 to 2004 grew from $245 million to $2 billion, an increase of 716 percent. About 330,000 Medicare beneficiaries are receiving dialysis.
Medicare will no longer pay for anemia treatment when a patient's hemoglobin level reaches more than 10 grams per deciliter. The original proposal set the hemoglobin level at 9 grams.
Under a new stipulation that attempts to restrict the use of the costly drugs, Medicare will no longer cover the treatment for anemia caused by cancer, as opposed to chemotherapy.
Epogen and Aranesp accounted for more than half of Amgen's sales last year. Sales for Aranesp, Amgen's biggest selling drug, hit $4 billion. Since the Medicare coverage restrictions were issued Monday, Amgen stock has fallen about 14 percent.
"If implemented, the coverage decision will be quite significant on biotech companies," said Eric Schmidt, a biotechnology analyst for the equity research firm Cowen and Co. in Boston. "A lot of these patients have continued to take these therapies beyond the new threshold."
Amgen and Johnson & Johnson face more bad news. The Food and Drug Administration will convene a panel on Sept. 11 to decide whether Epogen and Aranesp are safe for patients with anemia caused by kidney failure. The policy released this week pertains only to patients with cancer.
The FDA has required new warnings on the drugs' labels about the risks.
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