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PHARMA: Reprieve for Amgen looking doubtful

In a story titled somewhat cryptically Medicare chief stands by anemia move (do they mean he’s trying to become anemic?) Reuters reports that CMS is not backing down from its decision to radically cut payments for anti-anemia drugs for chemotherapy patients. In English this means that Amgen’s Arenesp (& Epogen, though that’s not officially for cancer patients) and J&J’s Procit (which is Epogen re-marketed by J&J) are not going to recover their lost sales from last year.  Those sales began to be lost when studies revealed that the fairly rampant use of those drugs was overuse, and also that they were causing some severe side-effects.

Of course for reasons that we all know (e.g. they have little to do with clinical endpoints and more to do with financial ones), community oncologists have flipped out. I do like the response from Dr. Barry Straube, the chief medical officer at CMS. He said:

Our staff looked at over 800 evidenced-based articles published in the literature," he said. "I doubt seriously whether most clinicians read all 800."

Of course the real impact of this was not on patients per se, but on Amgen’s stock price, which has not had the best of years. The little rally late last year was on hopes that CMS would change its mind. I’m afraid that that gravy train looks like it’s over.

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  1. What do we do about the anemia drug controversy?
    Most doctors and patients would agree the drugs are very helpful for patients when used to correct “severe” anemia, which can be debilitating and even life-threatening. The drugs reduce the need for somewhat risky blood transfusions and can give patients more energy and improve their quality of life.
    ”These are drugs that were presumed to be entirely safe, given for supportive care and to improve quality of life,” not to actually treat cancer, said Dr. Eric Winer, director of breast oncology center at the Dana-Farber Cancer Institute in Boston. ”So any concern that they could shorten someone’s life are taken quite seriously.”
    There is little evidence that the drugs make much difference for patients with “moderate” anemia. Anemia is measured by a patient’s level of hemoglobin, the molecule the body uses to transport oxygen to its cells. Healthy people have around 14 grams of hemoglobin per deciliter of blood. Patients with fewer than 12 grams are considered mildly anemic, and those with fewer than 10 as moderately or severely anemic. The labels on the drugs approved by the FDA encourage doctors to aim for a hemoglobin level of 10 to 12.
    Critics of the drugs say their increased use has been driven by profit. According to Dr. John Glaspy, director of UCLA’s Outpatient Oncology Clinic, one complicating factor is that oncologists make significant revenue buying cancer drugs from manufacturers and charging patients a higher price for receiving the drugs in their offices. That profit motive could influence some doctors’ decisions.
    Len Lichtenfeld, deputy chief medical officer for the American Cancer Society, told UPI last year that “probably more than a billion dollars is spent on erythropoietin each year, which makes it one of the most expensive cancer drugs.” A six-month course of treatment can cost more than $10,000 per patient.
    After this issue had started to be reported, U.S. Oncology took an 8-10 million dollar hit in its first-quarter SEC report last year, including reduced pre-tax income due to lower use of anemia drugs. They also were handicapped by CMS stopping the Medicare Demonstration Project which paid chemotherapy providers $130 per report, per infusional-chemotherapy recipient, on a patient’s level of nausea, vomiting, pain and fatigue, something that Congress found out that they were supplying free of charge anyway.
    A continuance of the Medicare Demonstration Project would have exacerbated existing economic and clinical problems instead of resolving them by increasing the temptations for physicians to overuse injectable drugs and promise to aggravate the economic problems Congress attempted to fix with the new Medicare law.
    A New York Times article reported last year that Federal laws bar drug companies from paying doctors to prescribe medicines that are given in pill form and purchased by patients from pharmacies. However, companies can rebate part of the price that doctors pay for drugs, like the anemia medicines, which they dispense in their offices as part of treatment. Doctors receive the rebates after they buy the drugs from the companies, but they also receive reimbursement from Medicare or private insurers for the drugs, often at a markup over the doctors’ purchase price.
    Although the new Medicare bill tried to curtail this kind of drug concession, private insurers still go along with it. What needs to be done is to remove the profit incentive from the choice of drug treatments. Let’s take physicians out of the retail pharmacy business and force them be doctors again!

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