EPO and market competition
Doctors Reap Millions for Anemia Drugs
By Alex Berenson and Andrew Pollack
The New York Times
May 9, 2007
Two of the world’s largest drug companies are paying hundreds of millions of dollars to doctors every year in return for giving their patients anemia medicines, which regulators now say may be unsafe at commonly used doses.
The payments are legal, but very few people outside of the doctors who receive them are aware of their size. Critics, including prominent cancer and kidney doctors, say the payments give physicians an incentive to prescribe the medicines at levels that might increase patients’ risks of heart attacks or strokes.
Industry analysts estimate that such payments — to cancer doctors and the other big users of the drugs, kidney dialysis centers — total hundreds of millions of dollars a year and are an important source of profit for doctors and the centers. The payments have risen over the last several years, as the makers of the drugs, Amgen and Johnson & Johnson, compete for market share and try to expand the overall business.
The rebates are related to the amount of drugs that doctors buy, and physicians that agree to use one company’s drugs exclusively typically receive higher rebates.
Neither Amgen nor Johnson & Johnson has disclosed the total amount of the payments. But documents given to The New York 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.
The medicines — Aranesp and Epogen, from Amgen; and Procrit, from Johnson & Johnson — are among the world’s top-selling drugs, with combined sales of $10 billion last year. In this country, they represent the single biggest drug expense for Medicare and are given to about a million patients each year to treat anemia caused by kidney disease or cancer chemotherapy.
Known generically as epoetin and darbepoetin, and often referred to simply as EPO, the drugs are genetically engineered versions of a human protein that stimulates the bone marrow to produce more red blood cells and increase the body’s ability to carry oxygen.
Since 1991, when the first of the drugs was still relatively new, the average dose given to dialysis patients in this country has nearly tripled. About 50 percent of dialysis patients now receive enough of the drugs to raise their red blood cell counts above the level considered risky by the F.D.A.
American patients receive far more of the anemia drugs than patients elsewhere, with dialysis patients in this country getting doses more than twice as high as their counterparts in Europe. Cancer care shows a similar pattern. American cancer patients are about three times as likely as those in Europe to get the drugs, and they receive somewhat higher doses.
Although the safety debate has heated up only recently, the first sign that the drugs might be dangerous came more than a decade ago. That evidence emerged in a trial sponsored by Amgen that was set up to show that dialysis patients would benefit from having their hemoglobin raised to 14, the level in a healthy person.
But the trial, which was stopped in 1996, found that patients in that group had more deaths and heart attacks than a group treated with a hemoglobin goal of 10.
That trial should have discouraged doctors from using too much epoetin and encouraged Amgen to study the risks further, said Dr. Steven Fishbane, a nephrologist at Winthrop-University Hospital on Long Island.
Instead, use of epoetin continued to soar. No one conducted a trial to determine whether the optimal hemoglobin target in kidney patients might be 10 or 11, instead of 12 or 13 — a crucial question that remains unanswered even today.
Dr. Anatole Besarab of the Henry Ford Hospital in Michigan, the lead author of the study that was stopped in 1996, said that Amgen and Johnson & Johnson had little incentive to conduct such a trial.
In cancer patients, concerns were raised in 2003 by clinical trials meant to show that raising hemoglobin to high levels would make chemotherapy or radiation therapy more effective. Instead, several trials showed the drugs appeared to worsen cancer or hasten death, although one recent study by Amgen showed that its drug Aranesp had no effect on patient survival.
Dr. Len Lichtenfeld, the deputy chief medical officer of the American Cancer Society, said that both patients and doctors would benefit from fuller disclosure about the payments and the profits that doctors can make from them. “I suspect that Medicare is going to take a very careful look at what is going on here,” he said.
Federal laws bar drug companies from paying doctors to prescribe medicines that are given in pill form and purchased by patients from pharmacies. But companies can rebate part of the price that doctors pay for drugs, like the anemia medicines, which they dispense in their offices as part of treatment. The anemia drugs are injected or given intravenously in physicians’ offices or dialysis centers. Doctors receive the rebates after they buy the drugs from the companies. But they also receive reimbursement from Medicare or private insurers for the drugs, often at a markup over the doctors’ purchase price.
Medicare has changed its payment structure since 2003 to reduce the markup, but private insurers still often pay more. Combined with those insurance reimbursements, the rebates enable many doctors to profit substantially on the medicines they buy and then give to patients.
http://www.nytimes.com/2007/05/09/business/09anemia.html?hp
Comment:
By Don McCanne, MD
In financing health care, the United States depends more on market forces while other nations utilize greater government oversight. The EPO story demonstrates that even physicians, when offered a legal, lucrative business deal, will modify their practice patterns to increase profit, even though those market incentives may work to the detriment of their patients’ health. It is easy to ignore outcomes and talk about “healthier hemoglobins” when the financial rewards for doing so are great.
Other nations depending on government oversight use EPO in more appropriate doses that benefit the health of their patients.
Although this is an ugly, shameful story, there is good news here.
Medicare, a government insurance program, has recognized the perversities and has altered the payment structure. And they are not finished. At a time when most policymakers are calling for an expansion of coverage through private health plans, this experience provides yet one more important piece of evidence that private insurers should be dismissed as administrators of our health care funds. As this article states, “Medicare has changed its payment structure since 2003 to reduce the markup, but private insurers still often pay more.”
Value is often defined as greater quality at lower cost. The private insurers have perpetuated the myth that private plans provide greater value through the marketplace, even though the health policy literature has established that they increase costs while ignoring the real parameters of quality. The EPO saga has demonstrated, once again, that Medicare is a leader in value purchasing in health care.
Medicare currently purchases health care for about one-eighth of our population. Just imagine the health care value we could all have if we dumped the private insurers and established a single, improved Medicare for all of us.