* Drugs include Amgen's Epogen, Aranesp; J&J's Procrit
* CMS final ruling due in mid-June
* Amgen shares rise 1 percent
(Adds analyst comment, background, share price, byline)
By Deena Beasley
LOS ANGELES, March 16 U.S. Medicare officials
do not plan at this time to change coverage terms for anemia
drugs used to treat kidney patients.
The agency, which is slated to issue a final decision on
the matter in June, also said it has found no clear proof that
the drugs provide clinical benefits other than increasing
Endorsement of current reimbursement guidelines would
benefit shares of Amgen Inc (AMGN.O), which takes in billions
from sales of its flagship anemia drugs for treatment of kidney
patients. The company's shares were up 1 percent at $53.15 in
after hours trading on Wednesday.
"This still leaves the door open for a future and final
ruling but at the end of the day, we think that a worse case
scenario was clearly avoided," JP Morgan analyst Geoff Meacham
said in a research note.
Under a draft decision announced on Wednesday, the U.S.
Centers for Medicare and Medicaid Services said it would not
issue a national coverage determination at this time.
The agency said it would seek comments on the announcement,
and would respond in a final decision memorandum in June.
Some Wall Street analysts are concerned that the government
healthcare plan might lower the threshold for target hemoglobin
rates, thereby reducing usage of Amgen's Epogen, which is
approved for usage in kidney patients undergoing dialysis.
A second-generation Amgen drug, Aranesp, as well as
Procrit, which is sold by Johnson & Johnson (JNJ.N), are used
to treat anemia in kidney patients who are not yet sick enough
to need dialysis and for cancer patients undergoing
Known as erythropoiesis stimulating agents, or ESAs, the
anemia medicines are used by patients with chronic kidney
disease at various stages to help reduce fatigue caused by the
disease or blood transfusions.
Sales of the drugs have declined steeply in recent years
amid safety concerns, but Amgen's Aranesp and Epogen along with
J&J's Procrit are still expected to generate $7 billion in 2011
revenue, according to data from Thomson Reuters.
Although CMS currently pays for the drugs on a
region-by-region basis, it has no comprehensive, nationwide
policy on the issue. While CMS can't make any recommendations
on the drugs themselves -- that's the job of the Food and Drug
Administration -- any Medicare payment changes could affect
Private health insurers also tend to eye Medicare decisions
when setting their own coverage policies.
While Medicare traditionally covers just elderly and
disabled Americans, kidney disease patients are an exception.
The program also covers all those with end stage renal
disease under a decades-old law. As of 2009, Medicare covered
572,569 kidney patients, according to CMS.
FDA is also weighing whether to change approved use of ESAs
for kidney patients, but its own outside advisers have urged no
action. Both CMS and FDA have already taken steps to address
use of ESAs in cancer patients.
(Additional reporting by Susan Heavey; Editing by Steve
Orlofsky, Bernard Orr)