Big Changes in ‘07?

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The New Year is upon us and pundits and prognosticators around the nation are busy doing their best Nostradamus impersonations hoping to be the one who correctly predicts the most influential events of 2007.

As this issue of Renal Business Today went to press, one of the biggest issues that could affect the renal community was beginning to unfold. On Dec. 6, 2006, the House Ways & Means Committee held a hearing, its final under Republican leadership, to discuss how Medicare pays for anemia drugs in the dialysis clinic—most notably Amgen’s Epogen, which Medicare spent $2 billion on in 2005.

The hearing centered on a Government Accountability Office (GAO) report released ahead of the hearing that discussed the use of anemia drugs and Medicare’s spending on dialysis patients. The GAO’s main recommendation was that “the Congress should consider establishing a bundled payment system for all [end-stage renal disease] services.”

The report implied that the current system of anemia drug reimbursement includes a profit motive for doctors to use Epogen, and that bundling anemia drug reimbursement with dialysis payments could remove that incentive.

In its submitted testimony for the hearing, Amgen said increased Epogen spending is the result of growth in the dialysis patient population, an improvement in meeting quality standards and a sicker dialysis patient population with higher Epogen requirements.

The current system reimburses Epogen at the average sales price with an additional 6 percent premium. The GAO contends that “The ASP method relies on market forces to moderate manufacturer’s prices; however, Epogen is the product of a single manufacturer and has no competitor products.”

Roche, as most people are well aware, will likely launch its anemia drug Mircera at-risk this year despite the upcoming September patent infringement case with Amgen in Boston. Regardless of the impending competition though, Congress has taken notice with the anemia payment issue. And coupled with the two recent New England Journal of Medicine studies that suggested higher doses of anemia drugs in non-dialysis renal patients were linked with cardiovascular risk, anemia drug practices are sure to come under even more scrutiny this year.

Amgen said Congress should wait for the results of CMS’s bundling demonstration project before implementing a new payment system, but Congress seems to have signaled its intent for big changes in 2007. “Medicare’s priorities should be promoting patient safety and getting the best deal for taxpayers and beneficiaries. The GAO report confirms that current reimbursement policy for ESRD accomplishes neither of these goals,” said Ways and Means Health Subcommittee Ranking Member Pete Stark (D-CA). “In the next Congress, I will work to refine Medicare policies to protect the interest of at-risk beneficiaries.”

Things could get very interesting.

Keith Chartier Editor
kchartier@vpico.com

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