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ORTHO TO INTRODUCE PROCRIT (EPO) IN FEBRUARY FOR NON-DIALYSIS AND AIDS-RELATED ANEMIAS; AMGEN WILL BE SUPPLIER, INDEPENDENT AUDITOR WILL MONITOR SALES

Executive Summary

Ortho plans to begin shipping Procrit (epoetin alfa) in four to six weeks for use in predialysis chronic renal failure (CRF) patients and AIDS patients with AZT-induced anemia, the Johnson & Johnson subsidiary announced Jan. 2. Procrit was among FDA's eleventh-hour 1990 approvals on Dec. 31. Data for the AIDS indication were filed in February 1989 The approval allows Ortho to begin marketing the recombinant erythropoietin product licensed from Amgen, which began marketing its product Epogen for kidney patients on dialysis in June 1989. J&J currently markets EPO in Europe through its Cilag subsidiary for chronic renal failure under the tradename Eprex. According to a 1985 agreement between Amgen and J&J, the companies were to split the CRF market in the U.S. into dialysis and non-dialysis sectors. However, Amgen refused to name Ortho as a distributor until ordered to do so by a Chicago arbitration judge in April ("The Pink Sheet" April 16, T&G-4). Ortho is seeking monetary damages for sales lost in the non-dialysis market since June 1989. The companies are awaiting a decision from the arbitration judge on whether damages will be awarded. The non-dialysis population has been estimated at close to 100,000. Kidney patients on dialysis number approximately 110,000. Amgen says it has penetrated almost 100% of the dialysis market, with sales of $ 287 mil. in the first 18 months of marketing. Amgen will supply the drug to Ortho for both indications. In a Jan. 2 press release, Amgen said that it "will manufacture all Epoetin alfa distributed by Ortho in the U.S." Whether or not that supply agreement will extend to future indications obtained by Ortho is still under negotiation, the J&J subsidiary said. According to their licensing agreement, Ortho must pay Amgen 5% of its net sales in the U.S. After Ortho recovers its R&D costs, it will be required to pay Amgen 10% of net sales. The marketing of Procrit and Epogen will be monitored by an independent auditor to make sure that Epogen is only sold to dialysis-related centers and Procrit to physicians involved in non-dialysis chronic renal failure treatment or AIDS therapy. The price of Procrit will be the same as for Epogen, $ 10 per 1,000 units. The cost of Procrit therapy to AIDS patients will be $ 6,000-$ 8,500 annually. The annual cost of therapy to non- dialysis renal failure patients on average will be lower, starting at $ 3,000. The average annual cost of Epogen therapy for dialysis patients is currently $ 5,600. One of the only differences between the two products is the number of vials per package. Procrit will be marketed in packages of six single use vials of 2,000, 3,000, 4,000 or 10,000 units. Epogen is distributed in the same size vials in packages of 10. Procrit labeling for the chronic renal failure is the same as Epogen's. "Procrit is indicated in the treatment of anemia associated with chronic renal failure, including patients on dialysis (end-stage renal disease) and patients not on dialysis." Although dialysis patients are included in the labeling, Ortho says it will only market for non-dialysis uses. Procrit's second indication is for "the treatment of anemia related to therapy with zidovudine (AZT) in HIV-infected patients." Amgen's Epogen labeling will also include the AIDS indication. The Procrit PLA contained data on 297 AIDS patients suffering from severe anemia related to AZT therapy. In 118 of the patients from placebo-controlled studies, EPO treatment reduced the number of transfusions required by 40% over a three-month period. Noting that fewer adverse reactions were observed in AIDS patients than CRF patients, labeling states: "In contrast to CRF patients, Procrit therapy has not been linked to exacerbation of hypertension, seizures, and thrombotic events in HIV-infected patients." For both indications, Procrit will be used to "elevate or maintain the red blood cell level (as manifested by the hematocrit or hemoglobin determinations) and to decrease the need for transfusions in these patients." Labeling states that Procrit is not indicated for the treatment of anemia in HIV-infected patients "due to other factors such as iron or folate deficiencies, hemolysis or gastrointestinal bleeding." The starting dose for AIDS patients is 100 U/kg as an intravenous or subcutaneous injection three times weekly, slightly higher than the 50-100 U/kg recommended for chronic renal failure patients. Labeling notes that patients receiving AZT with endogenous EPO levels of less than 500 mU/ml "are unlikely to respond to therapy with Procrit." Whereas a maintenance dose of 75 U/kg t.i.w. is recommended for CRF patients, the maintenance dose for AIDS patients "should be titrated to maintain the response based on factors such as variations in AZT dose and the presence of intercurrent infectious or inflammatory episodes." Procrit has been available to AIDS patients under a Treatment IND since June 1989. To date, Ortho has provided 2,500 AIDS patients with the drug free of charge. There are 25,000 AIDS patients in the U.S. receiving AZT, and Ortho estimates that 60%- 80% of those could benefit from EPO therapy. Ortho is instituting a financial assistance plan for Procrit. Under the program, the cost of Procrit treatment is capped at $ 8,500 annually for all patients, Ortho said. In addition, patients with incomes less than $ 25,000 per year, who are uninsured or not covered on an outpatient basis can receive further assistance by enrolling in Ortho's program. A toll-free number has been set up to assist physicians in determining patient eligibility for the program.
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