Medicare proposes anemia drug coverage limits

By Lisa Richwine

WASHINGTON (Reuters) - The U.S. Medicare health insurance program proposed limiting payments for Amgen Inc. and Johnson & Johnson anemia drugs on Monday in response to safety concerns.

Coverage of the epoetins or Epo class of anemia drugs would be restricted for patients with certain types of cancer and related conditions, the Centers for Medicare & Medicaid Services (CMS) said in a statement.

WBB Securities analyst Steve Brozak said the Medicare cuts could "have a pretty significant impact" on the companies' earnings, but he declined to give a dollar figure.

Epo drugs have been under scrutiny in recent months after studies showed a higher risk of death in cancer patients not on chemotherapy. The U.S. Food and Drug Administration ordered stronger warnings on the medicines, and an FDA advisory panel last week said use should be further restricted.

Amgen sells the prescription drugs under the names Aranesp and Epogen, while Johnson & Johnson markets a competitor called Procrit. The medicines are also known erythropoiesis stimulating agents or ESA.

CMS proposed the drugs were "not reasonable and necessary for beneficiaries with certain clinical conditions, either because of a deleterious effect of the ESA on their underlying disease, or because the underlying disease increases their risk of adverse effects related to ESA use."

Some of the conditions that would not be covered include anemia in cancer patients not related to chemotherapy, anemia from myeloid cancers, or use of the drugs to prevent chemotherapy-induced anemia, CMS said.

Medicare still would pay for Epo use in breast, lung, skin, prostate and other cancers if specific conditions on patient hemoglobin levels, dosing and treatment duration and other factors were met.

Medicare is the U.S. health insurance program that covers more than 43 million elderly and disabled Americans.

The EPO drugs are approved to treat anemia caused by chemotherapy in cancer patients and in people with kidney failure, but doctors have prescribed them more widely. Combined sales of the medicines topped $10 billion last year.

Aranesp and Epogen account for roughly half of Amgen's profit. Procrit is less important to J&J, a health-care products conglomerate.

Johnson & Johnson spokeswoman Stephanie Fagan said the company was analyzing the CMS proposal and would submit comments. Amgen also was reviewing the announcement, company spokeswoman Trish Hawkins said.

CMS said it would take public comments until June 13 before making a final decision on the coverage proposal, which was posted ">here

(additional reporting by Lisa Baertlein in Los Angeles)