That’s the word from Jim Reddoch, a biotech analyst at Friedman Billings Ramsey, after Medicare wrote doctor groups that it remains unconvinced its recent decision to scale back reimbursement for Amgen’s Aranesp was inappropriate. The letter from the Centers for Medicare and Medicaid Services was written in response to protests filed by the American Society of Clinical Oncology, the American Society of Hematology and US Oncology, a healthcare network.

“The groups claimed CMS misinterpreted the existing data supporting Aranesp in patients with hemoglobin levels above 10 grams per deciliter,” Reddoch writes in an investor note. “In CMS’ response this morning, CMS is unconvinced it needs to reconsider, saying no new evidence has been brought to light, nor is there evidence that CMS misinterpreted the existing data. In its letter, CMS does not sound like it is on the verge of changing its stance. A legal expert of ours said it read like cover for litigation, in that it makes CMS look constructive, deliberative, and not ‘arbitrary and capricious.’

“We do not expect CMS to change its stance. After this letter and our Washington consultants’ interpretations of it, we think it is less likely that CMS will change its coverage policy on Aranesp. First, CMS believes the initial safety and efficacy data presented in the letter was insufficient to prove that CMS misinterpreted the existing data. Additionally, we think (investors have) overestimated the political pressure; we view it as window dressing so far. Lastly, CMS was in a position to buckle under political pressure between the draft and the final; it did not.

“Also, biotech investors forget that there is probably equal pressure from the (managed-care and insurance) lobby to keep the (coverage decision) as it is. The wild card: Medicare has a new head, Keery Weems, who may have different priorities than Leslie Norwalk, the prior head. It is possible that private payors (which are 60 percent of Aranesp’s reimbursement) will follow CMS’ lead since they have just as much incentive to cut costs as the government; this would prompt a significant reduction in already-reduced Aranesp estimates.” Translation: lower sales.

CMS gave advocates 30 days to deliver proof to support a different conclusion than reached by the agency in its review of more than 800 publications and 2,600 comment letters, Reuters reports.