1. Two of these drugs may also be used in Chronic Renal Insufficiency (CRI) aka CKD before dialysis. Amgen and Ortho BIotech compete heavily in this market place, and while it is not nearly the $$ size of the Chemo Induced Anemia market it does resemble the CIA market because the two products promoted are Aranesp and Procrit just as in Oncology. Epogen is reserved, and has a monopoly, on the CKD patient population on dialysis.

2. As to rebates: I’ve sold all three of these drugs, and I consider that these manufacturers are similar to Defense Contractors. While the Air Force will choose one Contractor over the others to build a new bomber using taxpayer money, CMS will use taxpayer money to pay for any one of these three drugs if their use is coded correctly by the MD’s office (or the Pharmacy if purchased under Part D). Both manufacturers still MUST compete for business against each other (Procrit vs. Aranesp in CIA and CKD pre dialysis). MOST of the money coming back to MD’s is in the form of up front rebates that allow the drug to be purchased at or near the ASP+6% rate as paid by CMS according to the 2003 Medicare Modernization Act. MD’s must still find some way to collect the 20% co-pay from patients because the ASP+6% rate is paid only at 80%. Rebates (money paid after the drug is purchased, and usually calculated net of the discounts already offered), are a smaller part of the incentive to choose one drug over another, but important to the manufacturer’s to keep customers buying. If all the money is up front in the form of a discount, there is no incentive for an MD’s office NOT to whipsaw one contract against the other.

3. Roche’s MIRCERA drug, if approved will compete against all three of the drugs on the market, first in CKD, and later if indicated in CIA. I firmly believe however that Oncologists will use the new drug in their practice because at least 20% of cancer patients can be coded and their drugs reimbursed because of declining renal function due to their cancer, their chemotherapy, or their advancing age.

4. Two products muddy the water in the CIA market. Amgen has a virtual lock on the White Blood Cell Growth factor market with Neupogen and Neulasta. Berlex (part of Bayer) has Leukine, but it is a small player. The real controversy in this market has been Amgen’s arm-twisting by “bundling” Aranesp purchases to Neulasta purchases. By far, Oncologists want to use Neulasta, but at $2,500 or more per injection, it puts a real strain on the MD’s cash flow as well as the patients. Amgen makes discounts and rebates available on Neulasta only if Aranesp purchases far outweigh Procrit purchases in the Oncologists office. J&J sued Amgen over this issue in 2006. I’ll be retired before the suit and appeals are finished on this one!

5. The clinical evidence is VERY strong that these drugs should not be used off label (as in Anemia of Malignancy where patients are Anemic due to their cancer/tumor but receiving no Chemotherapy and/or Radiation). Evidence is also strong that CKD patients should not have their hemoglobin (Hb)exceed 12g/dL. The problem comes when patient’s Hb rises above 12 for a short period of time before the MD can make a correction in the dose of the drug. Red Blood Cells take a long time being produced in the body, so “excursion” beyond Hb of 12 are common; as are excursions below 10 or 11 Hb when a patient is hospitalized/misses a dose/has an infection/their disease gets worse. FDA’s new Warnings section addresses the upper level of 12 Hb very firmly.

6. If FDA slaps to many restrictions on the use of these drugs, where will MD’s and patients go for relief of this grevious condition? Transfusion and supplemental Iron are the only other choices available, and both carry significant concerns and do not address the Anemia as well as to the Epo drugs. I have seen the positive results of these drugs on the quality of life of almost ALL patients who are dosed correctly. Many would have little quality of life due to the crushing fatigue of Anemia if it were not for the appropriate use of these medications.

7. For the time being, the companies MUST compete for their share of the business. This competition will include discounts to make the drugs affordable to the MD’s office in the face of declining reimbursement by the biggest payer (Medicare and the taxpayers). Rebates will continue to be both the carrot and stick for the companies to keep their customers buying the drug. Rebates can be used in one of two ways: to offset the costs associated with patient care that are NOT reimbursed (ie: bad debt, patient counseling, losses on other expensive drugs), or they can be used for the “downpayment on a new Lexus”. I have personally seen the Income Statements of practices whose sole source of tangible profit are the rebates on just a few of the big drugs that they purchase. They lose money seeing patients, admitting patients to the hospital, billing patients and the government, and on and on.

It is a crazy system and unique in the practice of medicine. If you take home three points from this message there are: these drugs work and work well when dosed correctly, the companies MUST compete for business, and the MD’s need the discounts and rebates to stay in business.