AMGEN SHARES RISE 6%; MEDICARE CHANGES BOOST DRUG MAKER.

Byline: Ben Sullivan Daily News Staff Writer

Shares in Amgen Inc. got a shot in the arm Thursday after the federal government eased Medicare funding guidelines for one of the company's two blockbuster drugs.

The news sent Amgen shares up $3.38, or more than 6 percent, to close at $58.38. At one point, the stock was up $5.63, or 10.2 percent.

``This is very important for them,'' PaineWebber analyst Elise Wang said of the new guidelines. ``Whether it ultimately translates into (earnings) dollars we don't know, but you definitely have to think it will accelerate sales growth.''

The change in government reimbursement rules for the drug Epogen, which stimulates the growth of red blood cells in people with anemia and which accounted for roughly half of Amgen's $2 billion in revenues last year, went into effect Tuesday, the Clinton administration said.

Last fall, the funding agency that oversees Medicare had tightened the guidelines for when it will reimburse kidney dialysis centers for use of the drug. Patients with kidney disease are one of the largest groups of Epogen users.

Under the stricter conditions, the government would pay for Epogen only if a patient's red blood cell count fell below a certain level during a 90-day period. Amgen, patients and the dialysis centers argued that the bar had been set too low, effectively denying the drug to individuals who needed it.

The government agreed - at least in part - and Tuesday implemented two changes. Now if a doctor says Epogen is medically justified, Medicare will pay for the drug even if the patient's red cell count is greater than the cut-off point. If a doctor does not indicate there is a medical justification, Medicare still will reimburse for the drug but at a lower rate.

``This is going to affect a large pool of patients,'' Wang said, though it will take a quarter or so before the changes show up on Amgen's books.

Still at issue is whether the government will cut its reimbursement rate for Epogen. Currently Medicare reimburses dialysis centers $10 per 1,000 units of the drug. But the centers get the drug from Amgen for less than that, usually for between $7.30 and $9.54 per 1,000 units.

At the recommendation of the Inspector General of the U.S. Department of Health and Human Services, President Clinton proposed in January cutting the reimbursement rate to $9, though no final decision has been made.

Speculation that such a cut is in the works has hurt Amgen's share price in past months.