Washington Editor

WASHINGTON - Congressional members made clear their desire to lower government expenses related to various forms of the anti-anemia drug epoetin alfa in the context of questioning why it's reimbursed at doses beyond that suggested in its FDA label for end-stage renal disease (ESRD), a practice that isn't safe, some charge.

"We have a payment policy that is possibly killing people," said House Ways and Means Committee Chairman Bill Thomas (R-Calif.), addressing his chief concern about the reimbursement of epoetin drugs by the Centers for Medicare & Medicaid Services (CMS). "We're going to continue to look at this area for two fundamental reasons: I'm very much concerned about the health of these patients, and I'm very much concerned about the enormous dollar amounts."

The drugs, mostly Amgen Inc.'s Epogen (epoetin alfa) and to a lesser extent Aranesp (darbepoetin alfa), represent CMS' largest drug expense. Last year's spending on them in the dialysis setting reached $2 billion.

At Wednesday's committee hearing on the matter, Thomas' final as its leader, acting CMS Administrator Leslie Norwalk noted that reimbursement levels should maintain quality in both the interests of patients' health and the Medicare program's financial well-being. "Payment reform is critical to improving ESRD patient care," she said.

But Norwalk also stressed that treatment decisions are best left to physicians' clinical judgment, and that requires dosing flexibility to get patients to achieve and maintain recommended hemoglobin concentration levels between 11 g/dL and 12 g/dL. CMS reimburses providers for higher doses that can boost hemoglobin up to 13 g/dL, in contrast to FDA-approved labels on those drugs that target hemoglobin under 12 g/dL, a disconnect attributed to patient variability in achieving the recommended range.

"That narrow a range, 11 to 12, is difficult," explained Barry Straube, CMS' chief medical officer. Therefore, payment systems should not penalize physicians who adjust dosing up and down to deal with the common hemoglobin level fluctuation in those patients.

Officials from Thousand Oaks, Calif.-based Amgen underscored such thinking, noting that because hemoglobin maintenance is difficult, physicians are not necessarily acting inappropriately when patients' hemoglobin levels temporarily exceed the FDA label target range.

"The payment policy is very clear in what it says," said Joshua Ofman, Amgen's vice president of global coverage and reimbursement. "Providers should target hemoglobin of 10 to 12, which is consistent with the FDA label."

But should hemoglobin hit 13 and a physician doesn't reduce the dose, then the doctor is subject to a payment reduction, he added. That, said Rob Brenner, Amgen's executive director of medical affairs and nephrology, "appropriately reflects the way that anemia is managed."

However, critics charge that increased dosing levels reflect the reality that physicians are reimbursed at a higher rate for higher administrations of the drugs, a recipe for overuse.

"Current CMS policy and industry-sponsored clinical practice guidelines support both high-target hemocrit and high EPO doses," testified Dennis Cotter, the president of the Medical Technology and Practice Patterns Institute in Bethesda, Md. That assumes, he added, that high hemocrit levels improve outcomes, "an assumption that is contrary to clinical trial results."

Consequently, in parallel with the debate on the value of variable dosing, there is a push from Congress to more efficiently pay for ESRD patients and the drugs they use, primarily Epogen.

Just ahead of the committee hearing, the Government Accountability Office released a report recommending that the drug's reimbursement be bundled with other dialysis services that are administered hand in hand with the drugs to promote efficiency.

At present, CMS divides ESRD items and services into two groups for payment purposes, one comprising nursing, supplies, equipment and some lab tests and the other encompassing drugs and newer lab tests. Increasing payments for the latter have long subsidized essentially flat payments for the former.

"Some might say it's our only form of socialized medicine," said Rep. Pete Stark (D-Calif.), the ranking member on the Ways and Means Health Subcommittee. "We should be getting a better deal."

David Walker, the GAO's comptroller general, testified that the current payment method "does not control" incentives that drive overuse.

Echoing that theme, Cotter called it "an income stream" for physicians, but if ESRD reimbursement was viewed as a cost, "it would motivate providers to become much more" cost-effective.

Walker sounded a similar note, saying bundled payments "tend to be more efficient" than paying separately for drugs and dialysis services, he said, adding that "providers cannot prosper by providing extra services."

Walker added that Congress ought to implement a bundling payment system soon rather than wait on a delayed feasibility study still being conducted by CMS, which Norwalk promised to deliver by early summer. Thomas, who said he's "loathe" to legislate payment systems, nevertheless warned Norwalk that "Congress will move if you don't," suggesting that the newly reconfigured body would act quickly next year without waiting for CMS to finish its study.

Amgen's Ofman and Brenner warned against rushing into a bundled payment system before CMS' work is done, though, cautioning that if it were implemented poorly, it could result in harm to patients and cost Medicare more money.

Other suggestions to promote savings for CMS included encouraging subcutaneous injections of Epogen, which adds some patient discomfort but costs less because lower drug doses are needed, and introducing competition into the space, such as encouraging further use of Aranesp or even Procrit (epoetin alfa, from Johnson & Johnson), which is approved in chronic kidney disease patients but not for those on dialysis. The latter suggestion also contemplates another anemia-fighting drug, CERA (continuous erythropoietin receptor activator, F. Hoffmann-La Roche Ltd.), whose planned U.S. introduction is being challenged by Amgen in a patent infringement suit.

On Wednesday, shares in Amgen (NASDAQ:AMGN) gained 83 cents to close at $69.89.