Oncology Reimbursement Changes Could Close Small Practices, Amgen Says

Amgen remains confident its oncology portfolio is on track to deliver growth despite changes in reimbursement in the market, Associate Director-Investor Relations Laura Biswas said.

The exec addressed the reimbursement changes for physician-administered drugs, which are now paid based on average sale price rather than average wholesale price, during a March 29 Smith Barney Citigroup Healthcare Conference in Washington, D.C.

"Our products have positioned us well for the new reimbursement environment," Biswas said.

Amgen expects the large physician practices - where the bulk of Aranesp (darbepoetin) sales are generated - to "survive and adapt," Biswas said.

"The smaller, less efficient practices are likely to suffer more, and there is potential that we may see some shift of the patients to the hospital setting or perhaps some of the larger clinics."

While Amgen believes other reimbursement adjustments by the Centers for Medicare & Medicaid Services have offset some of the negative impact from the change to ASP-based reimbursement, the company appears to be anticipating a market shakeout.

"We do also agree the administration fees and demo project have eased some of that transition, and we are waiting to see this play out in the market."

Amgen is engaged in its own projects to maintain patient access to treatment. Specifically, the company said it is providing $18 mil. in grants to several independent non-profit foundations to assist patients with co-pays.

Uncertainty in the Medicare Part B market has been one of the biggest challenges facing Amgen this year. The company reiterated high single digit to mid-teen revenue growth projections for 2005.

- Jessica Merrill