Medicare chief stands by anemia move

By Kim Dixon and Lisa Richwine

WASHINGTON (Reuters) - A senior Medicare official said the case for restricting payments for anemia drugs sold by Amgen Inc (AMGN.O: Quote, Profile, Research, Stock Buzz) and Johnson & Johnson (JNJ.N: Quote, Profile, Research, Stock Buzz) has become stronger since the agency made its controversial decision.

The U.S. Centers for Medicare and Medicaid Services (CMS) is reviewing its decision to restrict payment in certain cancer patients following a storm of criticism from cancer doctors and the drugmakers to restrict payment for the drugs.

Mounting evidence, including two studies casting more doubt on the drugs' safety, backs the original policy, Dr. Barry Straube, the chief medical officer at CMS, told the Reuters Regulation Summit on Friday.

"I think that our national coverage decision has been shown, with even more evidence coming out since we made it, to have been the right thing to do," Straube said.

The drugs are one of the biggest prescription costs for Medicare, the U.S. insurance plan for about 43 million elderly and disabled. So-called erythropoietin-stimulating agents, Amgen's Aranesp earned about $3.6 billion in 2007 sales, and J&J's Procrit had 1.7 billion in 2007 sales.

CMS issued its payment restrictions in 2007 after four large studies raised safety concerns and the Food and Drug Administration added its strongest warning to the drugs' labels, based on studies that suggested a higher risk of death and other adverse events.

A J&J spokeswoman said "there are other studies CMS should take into account," and that the drugs are safe when used according to the label. Amgen was not available for comment.

FDA MEETING KEY  Continued...