For more than 20 years, Amgen has enjoyed the benefits of a monopoly on treating anemia in end-stage renal disease patients on dialysis. Almost all dialysis patients are also severely anemic and receive regular intravenous injections of Amgen’s Epogen. Andrew Pollack, writing for the New York Times, reports Amgen sold about US$40 billion worth of Epogen over the past 23 years.
“Anemia drugs built Amgen into the world’s biggest biotechnology company,” writes Pollack. “In the early 1980s, as a small start-up, Amgen won a race to isolate the gene for erythropoietin, or Epo, a protein produced in the kidneys that causes the body to produce oxygen-carrying red blood cells. Amgen then spliced the human Epo gene into hamster ovary cells, which were grown in culture and could churn out large quantities of the protein to use as a drug.”
Amgen’s sole European patent on Epogen expired several years ago and the company and its drug has serious competition there. But in the US, Amgen was granted multiple patents on its single “invention,” resulting in a series of staggered patents, some of which don’t expire until 2015—much longer than the 20 years of exclusivity specified in US patent law.
The vast majority of US dialysis patients are on Medicare (I’ve been on dialysis since February 2000 and reamin privately insured). Before last year, the country’s two largest dialysis service providers—Fresenius and DaVita—could use Epogen as a profit center because Medicate would reimburse them for Epogen expenses at a rate higher than that which they paid Amgen for the drug. As a result, last year Medicare instituted a new reimbursement program—the “Dialysis Bundle”—whereby it pays a flat fee for dialysis services, including Epogen.
On 24 June 2011, the US Food and Drug Administration (FDA) announced that there is “no risk-free dosage level” of Epogen and similar erythroipoiesis stimulating agents (ESAs) and that these drugs should be used only to reduce the need for blood transfusions.
Yesterday, the FDA approved Affymax’s Omontys for treating anemia in dialysis patients. Omontys works the same way Epogen does in the body and will carry the same FDA “black box” warning. Some studies have indicated that some patients who take Omontys experienced a higher rate of cardiovascular problems.
John A. Orwin, Affymax chief executive, told Pollack that “... while the list price for Omontys might not be that different from that of Epogen, Affymax intended to make its product less expensive in its contract negotiations with dialysis providers….” And that’s precisely why most US patients will never see Omontys. As Pollock reports, DaVita has agreed to use Amgen’s drugs, including Epogen, “for at least 90 percent of its needs through the end of 2018.” Fresenius agreed to a three-year nonexclusive contract with Amgen.