WASHINGTON -- Rep. Pete Stark, D-Calif., chairman of theWays and Means health subcommittee, challenged Amgen Inc.'sright to receive "gross" profits from Medicare reimbursementsfor its Epogen erythropoietin at a hearing Thursday on nationalhealth insurance reform.

Stark sent a letter to the General Accounting Office onTuesday requesting that it investigate options for loweringgovernment costs for EPO and other single-source drugs,according to the lawmaker's office.

Stark said the reimbursement rate for the anti-anemia drugwas set too high. He said it costs 40 cents to produce 1,000units of the drug, "but Medicare is buying 1,000 units for $11 -- a 2,750 percent mark up." He called for imposition of a"windfall profit tax" on Amgen, an amendment to the OrphanDrug Act, or for Medicare to renegotiate the price of EPO withAmgen.

Amgen spokesman Mark Brand responded that "the whole issueof price goes back to a couple of foundation points. The patientbenefit has been extremely significant in terms of quality oflife; there has been no price increase since launch; the (Amgen)safety net program ensures that there is no denial of access(to patients who cannot afford EPO); and if you look atcomparative prices for a 4,000-unit vial in the U.S., WesternEurope or Japan, the price of Epogen in the U.S. is much lower."

Brand also said that the profits from EPO are reinvested inresearch and development. Last year, Amgen's $62.5 millionR&D budget was second in the biotechnology industry behindGenentech Inc.'s $73 million, he said.

Amgen stock (NASDAQ:AMGN) closed at $55.75, up 50 cents onThursday.

-- Steve Usdin BioWorld Washington Bureau

(c) 1997 American Health Consultants. All rights reserved.