All new intravenous and injectable drugs for patients with end-stage renal disease should be allowed two years of transitional payments from Medicare Part B before being lumped in with other drugs reimbursed under the ESRD payment bundle, Amgen Inc. argues in Aug. 25 comments to the Centers for Medicare and Medicaid Services.

More specifically, CMS should not limit the transitional payments to only those drugs that would not fall into one of the 11 “functional” categories of treatments currently included in the bundle, as it has proposed, the company adds.

The comments respond to CMS’ recently released plan to pay separately for some, but not all, new IV and injectable ESRD drugs for two years ([A#14150629001]). During the transition period, new drugs would be reimbursed based on the Part B drug payment methodology of 106% of the drug’s average sales price. After the agency gains experience in the cost of the drugs, they would be included in the bundle with other drugs used in a patient's treatment, creating incentives for providers to limit costs and utilization.

The idea is part of the ESRD Prospective Payment System proposed rule for renal dialysis services furnished to Medicare beneficiaries in 2016, published in the Federal Register July 1.

“While Amgen appreciates the agency’s recognition that additional payment is required for new drugs, we are concerned about the proposed use of functional categories to limit the ability for certain new drugs to qualify for the additional payment,” the company explains, “particularly since these functional areas frequently represent clinical conditions with significant unmet clinical needs, where innovative solutions are still desperately needed to improve patient care.”

The 11 functional categories now bundled include: access management, anemia management, bone and mineral metabolism, cellular management, antiemetics, anti-infectives, antipruritics, anxiolytics, excess fluid management, fluid and electrolyte management (including volume expanders), and pain management.

“To ensure that the transitional drug add-on payment adjustment provides an effective incentive for improvement in care for beneficiaries on dialysis,” Amgen states, “we recommend that CMS make the payment adjustment available for all new drugs that are not generic or biosimilar formulations of existing products included in the ESRD [payment system], not just for those that do not fit into an existing functional category.”

Amgen Developing IV Alternative To Sensipar

The company’s approach could benefit its new IV calcimimetic drug candidate. Amgen submitted an NDA for etelcalcetide to treat secondary hyperparathyroidism in patients with chronic kidney disease on dialysis on Aug. 25 ([A#14150825002]).

If approved, etelcalcetide would be the first calcimimetic that can be administered intravenously at the end of a dialysis session. This would be a benefit, according to Amgen, because physicians and payers could be assured patients are receiving the product and getting the benefits.

It would also be an alternative to Amgen’s oral calcimimetic, Sensipar (cinacalcet), which is associated with a high pill burden, adverse events like nausea and vomiting and poor compliance rates. Sensipar generated US sales of $796m in 2014 and $261m in the second quarter of 2015. However, it may be facing generic competition in the next few years; its last patent expires in 2018.

Injectable and infused drugs have been included in the Medicare ESRD bundle since 2011 in part to control overutilization of erythropoiesis-stimulating agents like Amgen’s Epogen (epoetin alfa) and Aranesp (darbepoetin alfa). Bundled payments are intended to promote more efficient use of products and services, since physicians are given a single payment to cover all the products and medical services for an episode of care, thus helping to control costs.

After dropping sharply with the change in reimbursement, US sales for Epogen have stabilized of late, due at least partly to price increases. Sales for the drug reached $2bn in 2014 and were $491m in the second quarter of 2015. Aranesp’s US sales totaled $796m in 2014 and were $223m in the second quarter of this year. Oral-only drugs are exempt from the bundle until 2025.

Medicare Policy Stifling innovation

Medicare reimbursement for ESRD drugs has had a chilling effect on innovation and should be aimed instead at helping to spur development of treatment advances, Amgen maintains.

“Although Amgen has continued to invest in development of new therapies for patients with ESRD, we note there has been little innovation in this field in recent years, with only five novel therapies approved in the last decade,” the company says, citing AMAG Pharmaceuticals Inc.’s Feraheme (ferumoxytol), Affymax Inc.’s now-withdrawn Omontys (peginesatide), Vifor Pharma Ltd.’s Velphoro (sucroferric oxyhydroxide), Keryx Biopharmaceuticals Inc.’s Auryxia (ferric citrate) and Rockwell Medical Inc.’s Triferic (ferric pyrophosphate citrate).

“It is worth noting that some advancements in nephrology have occurred in specific clinical areas, and these are generally areas that have reimbursement outside of the ESRD” payment system, Amgen points out. “This suggests a lack of mechanism to reward innovation in the bundle (e.g., with additional payments to the bundle or pass-through payments until appropriate rates can be set) has resulted in some stagnation in innovation for the vulnerable ESRD population.”

All New ESRD IV Drugs Should Get Break From Medicare Payment Bundle – Amgen

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