Congressional lawmakers Wednesday warned that they were considering changing how the government reimbursed doctors and dialysis centers that treat 2.5 million cancer and anemia patients each year, a move that could be a blow to Thousand Oaks biotech giant Amgen Inc.
At an often-tense two-hour hearing, lawmakers grilled a panel of doctors and federal regulators about growing concerns over the costs and safety of anemia drugs, the single biggest medication expense for the federal Medicare program.
The majority of the hearing centered on a proposal to change the way the federal government pays for dialysis treatment. Because the government pays for most dialysis, any change could significantly affect the pharmaceutical and dialysis industries, especially Amgen, whose anemia drugs account for half of its $12.4-billion annual revenue and nearly 60% of its $3.7-billion profit.
Last month, research studies in the New England Journal of Medicine found that patients who received higher doses of anemia drugs died or suffered heart attacks and strokes more often than those who received lower doses.
The government reimburses for dialysis services and drugs separately, which critics contend provides doctors with an incentive to prescribe higher doses of medication to increase profits.
The idea under consideration, backed by powerful lawmakers such as Rep. Bill Thomas (R-Bakersfield), chairman of the House Ways and Means Committee, is to force dialysis centers to bill a single fee for dialysis treatment and drugs.
Several experts who testified Wednesday said bundling the charges was a good idea.
Ajay Singh, associate professor of medicine at Harvard Medical School, said adopting "a bundled reimbursement schedule will likely remove the incentive for higher epoetin use" and possibly reduce the incentive for doctors to continue increasing anemia drug doses. Epoetin is the primary substance in anemia drugs.
In a report released Tuesday in anticipation of Wednesday's hearing, the Government Accountability Office, Congress' independent research arm, also recommended that dialysis treatments be bundled.
Amgen wasn't invited to speak at the hearing. Josh Ofman, Amgen's vice president of global coverage and reimbursements, said Wednesday that the company was concerned that changes in payments for anemia drugs without more research could harm already vulnerable patients.
Amgen's anemia line includes Epogen and Aranesp.
Anemia is a condition in which people don't produce enough red blood cells, or hemoglobin, increasing their risk of infections, stroke and death.
A healthy adult has a hemoglobin level around 15 grams per deciliter. The Food and Drug Administration recommends that doctors prescribe a drug dosage to anemic patients so they have a hemoglobin level of 10 to 12 grams per deciliter.
Physicians say providing doses in excess of those recommendations is common and has grown in recent years, especially with patients who are on dialysis. A recent study published in the journal Health Affairs found that the average Epogen dose quadrupled from 1991 to 2003.
Because there is no clear proof that higher doses of anemia drugs produce better results, some doctors and lawmakers have increasingly raised concerns about the issue. In 2003, Congress asked the Centers for Medicare and Medicaid Services, which oversees the Medicare program, to investigate the consequences of altering its payment arrangement to prevent doctors from exceeding the FDA's recommendations.
Lawmakers want the Medicare agency to explore how the government could ensure that dialysis centers and doctors wouldn't turn away the sickest patients under a bundled payment system. The agency is supposed to conduct a pilot program to see whether it can come up with a system under which doctors would be paid more to treat sicker patients, but it is behind schedule.