HMOs take softer stance on anemia drugs
By Kim Dixon
WASHINGTON, Oct 26 (Reuters) - Private health plans, which often look to Medicare to guide reimbursement for pricey treatments, are taking a less-restrictive position than the government in paying for controversial anemia drugs.
Medicare, the federal health insurance program for 43 million elderly and disabled, is under fire from some cancer doctors for its recent decision to reduce payment for drugs. Millions of people take Amgen Inc's (AMGN.O) Aranesp or Johnson & Johnson's (JNJ.N) Procrit to fight anemia from chemotherapy.
Tighter government reimbursement for the drugs, which earn the companies billions annually, came after several studies found higher doses of the drugs boost risk of heart attack, stroke and death.
Sales of the drugs have slumped already over the safety concerns, with U.S. Aranesp sales down 17 pct so far this year, and pressure from private payers could dampen sales even more.
Health insurers often base their reimbursement policies on Medicare, according to experts. But in this case, they are largely siding with the cancer doctor groups, which favor a more aggressive treatment approach, company officials said.
Medicare's stance puts commercial payers in a bind: If they cut payments for drugs used by millions to save millions, they risk igniting the wrath of patients, who are backed by their doctors.
Lee Newcomer, senior vice president for oncology at UnitedHealth Group (UNH.N), the biggest insurer by revenue, said "we're not planning to change our policy" after Medicare's decision.
"Quite frankly, a few things bothered me about the decision," Newcomer said, including the opposition from cancer doctor groups.
Aetna Inc (AET.N) earlier this month said it would endorse a broader treatment range, while a spokesman for WellPoint Inc (WLP.N), with 36 million customers, said the Medicare change will not trigger a new review of the agents.
The drugs are erythropoietin-stimulating agents, also known as ESAs or Epo drugs. Aranesp is Amgen's best-selling drug, with $4.1 billion in 2006 sales. Last year's Procrit sales were $3.18 billion, though use of both has fallen sharply this year amid safety concerns.
"UNUSUAL SITUATION"
"It's an unusual situation where there is a huge patient population and a life-or-death clinical intervention," Sean Tunis, former chief medical officer at the U.S. Centers for Medicare and Medicaid Services (CMS), said.
Private payers may be taking the less-restrictive stance because of a feared backlash from employers concerned about the ire of workers and doctors, according to a former industry insider.
"On the commercial side, you have to look at the cast of characters driving the decision-making process," said Robert Seidman, former chief pharmacy officer at insurer WellPoint Inc. "I think what the commercial payers are doing is looking to CMS and then looking for a safe place."
Despite the stance of private payers, Amgen said this week it is seeing up to a 40 percent drop in use of the drugs among private payers, because they are uncomfortable using one set of guidelines for patients on Medicare and another for private-pay patients.
Seidman predicted the private insurers will likely further tweak their policies to restrict payment, though not in as drastic a fashion as Medicare.
The debate revolves around whether or not there is enough evidence to use the drugs when a patient's hemoglobin is within a certain range. Boosting oxygen-carrying hemoglobin in the blood helps fight anemia.
The new Medicare policy says initial treatment can begin only when a patient's hemoglobin falls below 10 grams per deciliter.
The drugs' makers and cancer groups largely support allowing doctors to be reimbursed for treating patients within a range up to 12 grams per deciliter if they think it is appropriate.
The American Society of Clinical Oncology and other groups are fervently lobbying Medicare to reverse its stance -- a prospect which analysts call very uncertain.
Barry Straube, the chief medical officer at CMS, said earlier this week the data is not there to justify paying for the range of doses sought by the drug makers. And he said given studies suggesting a higher risk of death and other serious effects at high doses, it is not worth the risk.
Because of the drugs' cost -- it is the biggest prescription drug cost in Medicare's program -- critics charge that Medicare is putting budgetary concerns over patient care.
"If you really have a safety concern about a drug, and it's one that tens of thousands of Medicare beneficiaries are exposed to, you are going to pay more attention to it," Tunis, the former CMS official, said.
(Additional reporting by Lisa Baertlein)
((Editing by Brian Moss; Reuters Messaging: kim.dixon.reuters.com@reuters.net; kim.dixon@reuters.com, +1 202 354 5848)) Keywords: MEDICARE HMOS/
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