Anemia Drug Profit Scheme Screeches to a Halt - Part I

Washington, DCOn May 9, 2007, the New York Times reported that drug makers Johnson & Johnson and Amgen are paying "hundreds of millions of dollars to doctors every year in return for giving their patients anemia medicines."

While federal regulations prohibit drug makers from paying doctors who prescribe medications in pill form purchased at a pharmacy, companies can offer rebates to doctors who purchase drugs that are administered in the doctor's office.

The Times said that neither Amgen nor J&J has disclosed the total amount of the payments, but documents given to the Times "show that at just one practice in the Pacific Northwest, a group of six cancer doctors received $2.7 million from Amgen for prescribing $9 million worth of its drugs last year."

According to Science Daily on May 10, 2007, as many as 450,000 patients in the US are currently receiving anemia medications, "which can cost $1,000 per treatment."

The drugs are Erythropoiesis Stimulating Agents, or ESAs, man-made substitutes for a hormone that is normally produced in the kidneys and prevents anemia by stimulating bone marrow cells to boost hemoglobin levels by increasing the number of red blood cells. The proportion of red cells to whole blood should ideally remain at between 33% and 36%.

The drugs are FDA approved for the limited use with patients who are anemic and undergoing dialysis due to chronic kidney disease, cancer patients who are receiving chemotherapy and patients who are scheduled to have major surgery to reduce the need for blood transfusions.

According to the FDA-approved labeling, patients should have a hemoglobin level of 10-12 grams per deciliter of blood, and ESAs are to be used only if a level falls below 10 grams.

Over the past year, several investigations have revealed that the drugs are being administered off-label to patients who are not undergoing dialysis or chemotherapy and in higher doses than approved by the FDA. In fact, about 50% of dialysis patients receiving the drugs have hemoglobin levels above what the FDA considers safe, and about 20% develop dangerously high levels that can lead to heart attacks and strokes, according to the November 17, 2006, medical journal Lancet.

Aranesp is the brand name for darbepoetin and epoetin is marketed as Epogen and Procrit, the brand names for epoetin. Amgen manufactures all three drugs, but Procrit is marketed by a Johnson & Johnson subsidiary.

With worldwide sales of more than $9 billion in 2006, half of Amgen's total revenues were the result of Epogen and Aranesp, with combined sales of $6.6 billion. And with $3.2 billion in sales, Procrit was J&J's second best-selling drug last year, Forbes reported on March 21, 2007.

The two companies that dominate the dialysis industry in the US are Fresenius Medical Care, with roughly 1,500 centers nationwide, and DaVita, with more than 1,200 clinics. The dialysis centers are also boosting profits by administering the drugs intravenously instead of using the much cheaper method of injection.

On October 24, 2006, the Boston Globe reported that clinics would use 30% less ESAs if they were injected because they require a lower dose and stay in the system longer and that administering the drugs intravenously "may needlessly cost the federal government as much as $537 million annually while generating additional profits for its manufacturer and clinics."

In addition, on April 17, 2007, Newsday reported that the large for-profit chains like DaVita and Fresenius are negotiating volume discounts that allow them to buy ESAs at a lower price than the reimbursement rate from Medicare, "making the drug a profit center."

But its not just the money wasted that experts are concerned about. In November 2006, the Correction of Hemoglobin and Outcomes in Renal Insufficiency (CHOIR) study in the New England Journal of Medicine evaluated the benefits and harm with the off-label treatment of kidney patients who were not undergoing dialysis, with harm defined as effects that included death, heart attack, and hospitalizations for heart failure and stroke.

The study sought to determine whether targeting a hemoglobin of 13.5 grams versus 11.3 grams was associated with a higher survival rate and lower cardiovascular complications by comparing patients with an average hemoglobin level of 12.6 grams to those who had an average of 11.3 grams.

The lead author, Dr Ajay Singh, clinical chief of the Renal Division and director of dialysis services at the Brigham and Women's Hospital and an associate professor at Harvard Medical School, testified at a December 6, 2006, hearing before the House Ways and Means Committee and told lawmakers that patients in the higher hemoglobin group had a 34% higher risk of death and cardiovascular complications compared to patients in the lower level group.

The study found there were 52 deaths in the higher group versus 36 in the lower hemoglobin group, or a 48% higher risk and a 41% higher risk of hospitalizations for heart failure and more cardiovascular adverse events.

But most significantly, the study found no benefits for patients who received the drugs. "Therefore," Dr Singh testified, "the conclusion was there was both increased risk and no substantive incremental quality of life benefit in raising the hemoglobin among patients with chronic kidney disease not on dialysis."

In fact, he told the panel, the study was terminated early by the Data Safety Monitoring Board due to the increased risk for adverse events in the higher hemoglobin group when there was no likelihood of showing any benefit.

In March 2007, the FDA ordered Amgen and J&J to add black boxes to ESA labels warning about an increased risk of numerous adverse events and issued a public health advisory warning health care providers to administer the lowest possible dosage necessary to treat anemia.

The FDA also warned of an increased rate of tumor growth in patients with advanced head and neck cancer receiving radiation therapy and metastatic breast cancer patients receiving chemotherapy, when ESAs were given to maintain levels of more than 12.

There was also a higher rate of death reported, the agency said, but no fewer blood transfusions when ESAs were given to cancer patients who were not receiving chemotherapy.

Most of the profits made in the US came from taxpayers because the Medicare program pays for over 90% of services provided to dialysis patients with End Stage Renal Disease, at an estimated cost of roughly $2 billion a year, according to a report by the House Ways and Means Committee which oversees spending by public health care programs.

Lawmakers blame top administrators of the Medicare program for developing policies that allowed the over-charging scheme to take root.

At the December hearing, the soon-to-be new chairman of the Committee, Rep Pete Stark (D-CA), drilled acting CMS administrator Leslie Norwalk about the "Epo Monitoring Policy Group" that was supposedly created to advise the agency about Medicare policies related to ESAs.

"Now what troubles me," he told her, "is that of the 24 members -- I am looking at the list here of maybe 22 -- 18 of them disclosed financial associations with Amgen or Johnson & Johnson."

"When you got two-thirds of your supposedly independent advisors -- if I may use term loosely," he said to Norwalk, "on the take from the people that we are paying $2 billion a year to, does not that raise the issue that maybe you are not getting the straight skinny?"

"You have got DaVita -- that is self-explanatory;" he noted, "the Kidney Care Partners, a lobbying group for all of the dialysis guys; the National Kidney Foundation; 19 -- almost $20 million in corporate donations from the platinum friends, Amgen, DaVita."

He also pointed out the fact that one advisor was from the American Kidney Fund and that Amgen funds their clinical fellowship program.

Norwalk left herself wide open when she made the comment, "I think it is important -- and one of the reasons you have seen our monitoring policy, that it be put out publicly, it is important to get comment from across the board."
"Oh, come on," Mr Stark said.

"You and I are not doctors," he told her, "but you are a very good lawyer."
"You would tear these guys apart on the witness stand in two seconds," he said, "if you found out how much money they were getting from Amgen."

On May 8, 2007, the FDA released a report by FDA scientists that said no evidence indicated that ESAs either improved quality of life in patients or extended their survival, while several studies indicate that the drugs can shorten lives when used at high doses.

Also see: Anemia Drug Profit Scheme Screeches to a Halt - Part II