Merck Emend Coverage Decision Will Not Affect Aloxi, MGI Says

The Centers for Medicare & Medicaid Services' initiation of a national coverage determination process for Merck' anti-emetic Emend will have no impact on MGI Pharma's Aloxi , MGI CEO Lonnie Moulder said during a July 14 conference call.

The "relevance" of the national coverage determination process "to Aloxi somewhat escapes us," Moulder said.

CMS announced an "internally generated" national coverage decision process for the substance P antagonist Emend (aprepitant) on July 6 (¹ (Also see "Merck Emend Medicare National Coverage Decision Expected By April 2005" - Pink Sheet, 7 Jul, 2004.)).

MGI expects Emend will continue to be used as add-on therapy to 5-HT3 antagonists like Aloxi (palonosetron), Moulder said. The pivotal studies of the Merck drug were based on combination use, he noted.

The CMS national coverage determination notice, however, asks whether Emend is a "full replacement" for other covered agents.

Aloxi continues to perform very well in its first year on the market, with MGI raising its sales projection to $140 mil.-$150 mil. for the full year.

The product is covered under Medicare Part B in the outpatient setting and has "pass through" payment status for in-patient use under the Medicare Hospital Outpatient Prospective Payment System.

Most initial use of Aloxi has been in the outpatient setting, but hospital use has been picking up rapidly, MGI said.

The company noted that it has submitted its first "average sales price" calculations for Aloxi to begin setting a baseline for Part B reimbursement in 2005. In response to a question from an analyst, MGI said that $140 per vial is a "reasonable" estimate of the current average net selling price.

- Michael McCaughan