Aranesp once looked like Amgen Inc.’s supernova, predicted to turn into another blockbuster product for the Thousand Oaks biotech giant, much like its predecessor anti-anemia drug Epogen.
These days, Aranesp might be more like a black hole. The product is under attack in a federal lawsuit and safety concerns continue to shrink its market.
New York Attorney General Andrew Cuomo and his counterparts in more than two dozen other states filed a federal lawsuit Oct. 30 accusing Amgen of providing doctors with improper incentives to prescribe the drug, including trips, consulting jobs and free extra quantities of Aranesp that resulted in higher Medicare reimbursements.
Later that day, Amgen announced results from a study that found Aranesp users who had diabetes or chronic kidney disease not requiring dialysis had about double the risk of stroke as those who received a placebo.
Sales to patients with chronic kidney disease about $600 million of Aranesp’s $3.1 billion in sales last year, analysts estimate. Annual sales had been as high as $4.1 billion in 2006 before outside safety studies led regulators to require the company to increase warnings on the drug’s label.
Aranesp originally was approved for anemia related to cancer treatment, a market once dominated by Procrit. Amgen expanded its use to treat anemia related to kidney disease, Epogen’s prime market, and also hoped to prove its usefulness in alleviating anemia related to heart disease and other conditions.
Wall Street shrugged its shoulders at the latest pieces of bad news, sending the stock down only 2 percent to $52.43 in the first trading day after the announcements. That’s because analysts had long ago factored lower Aranesp sales into their projections and don’t see any immediate impact from the federal lawsuit. Shares were back above $54 late last week.
“It’s not really that material, to be honest,” said Aaron Reames, an analyst at Wachovia Securities Inc. “In any case, this is a case that wouldn’t be in settlement for years to come, and is unlikely to have any short-term impact on Amgen’s prospects.”
The lawsuit alleges that Amgen exceeded Food and Drug Administration requirements on filling Aranesp vials, and doctors overbilled Medicare as a result. The FDA requires overfilling vials a little to ensure that patients get a full dose, because syringes don’t suck out all the liquid in a vial. But the suit alleges Amgen exceeded the overfill requirements, allowing doctors to sell extra doses. The complaint of the attorneys general said that New York state’s Medicaid program alone paid at least $1.8 million in reimbursements for the excess overfill between April 2004 and July 2009.
Amgen denies any wrongdoing.
“Amgen has a solid compliance program and code of conduct called Do the Right Thing, and we expect that all of our employees follow it at all times,” the company said in a statement.
