AMGEN BRACES FOR U.S. CUT.Byline: Ben Sullivan Daily News Staff Writer It came as no surprise to officials at Amgen this weekend when President Clinton recommended cutting the Medicare reimbursement rate for Epogen, Amgen's powerful anti-anemia drug. The inspector general of the U.S. Department of Health and Human Services Noun 1. Department of Health and Human Services - the United States federal department that administers all federal programs dealing with health and welfare; created in 1979 Health and Human Services, HHS had recommended the 10 percent rate reduction last year, and because it is in line with the president's goal of cutting the cost of Medicare, Clinton's support was considered a foregone conclusion. What is less certain is the effect such a rate cut could have on Amgen's bottom line. ``We don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. exactly,'' Amgen Chairman Gordon Binder Gordon Binder is currently managing director of Coastview Capital, LLC, and previously was chairman of Amgen[1]. He joined Amgen in 1982, and previously had executive roles at the United Geophysical Corporation and the System Development Corporation. admitted in an interview last week. ``It will just have to play out.'' Epogen stimulates the growth of red blood cells Red blood cells Cells that carry hemoglobin (the molecule that transports oxygen) and help remove wastes from tissues throughout the body. Mentioned in: Bone Marrow Transplantation red blood cells and is used mainly to treat anemia in dialysis patients. The drug accounted for $1.6 billion in 1997 sales, or roughly half of Amgen's total revenues, and most of that came from Medicare. Under the Clinton plan, the government would reimburse dialysis centers $9 per 1,000 units of the drug, compared to the $10 it now pays. (Amgen sells the drug to dialysis centers for between $7.50 and $9.50 per 1,000 units.) In a worst-case scenario worst-case scenario n → Schlimmstfallszenario nt , the dialysis centers would then pass on the cuts to Amgen, either by purchasing less of the drug or demanding lower prices. Amgen is doing all it can to prevent either of those from happening. ``People have to understand that this is a only recommendation,'' Amgen spokesman David Kaye David V. Hope (born 14 October 1964), known professionaly as David Kaye, is a Canadian actor who is better known and revered for his work as a voice actor. Career said Wednesday. Even if it is enacted, he said, ``the direct impact is going to be on our dialysis center customers, not on us.'' To avoid lower revenues, Kaye said, Amgen is lobbying the Health Care Finance Administration, which funds Medicare, to keep the rates steady. And the company is in talks with the dialysis centers to come up with ways Amgen can make it worth their while to continue purchasing Epogen at current rates and levels. ``When you sell a product, it's not just the product itself you're dealing with,'' Kaye said. ``We don't just sell Epogen. We're a part of the community. We provide education services (to patients), product support, a whole variety of services.'' By bolstering such value-added services to the dialysis centers, he said, Amgen can help improve the marketability of Epogen. Elise Wang, an Wang, An (1920–90) electrical engineer, applied physicist; born in Shanghai, China. He emigrated to the United States in 1945. In 1948 he invented magnetic core memory, a key element in computer technology. analyst at PaineWebber in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , agrees. ``They have very good relationships with their customers, the dialysis centers,'' Wang said. ``There probably are ways Amgen can produce added value Added value in financial analysis of shares is to be distinguished from value added. Used as a measure of shareholder value, calculated using the formula:
In addition, Wang and Kaye say there is hope the government eventually will ease the requirements that patients must meet to qualify for subsidized Epogen. That itself could offset the losses from reimbursement rate cuts, and even lead to entirely new moneys, they said. ``Amgen has always handled themselves very professionally with the government and with dialysis centers,'' Wang said. ``And you can't forget, their product's an important one.'' |
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