Review of EPOGEN Reimbursement

EXECUTIVE SUMMARY:

This final report provides the Health Care Financing Administration (HCFA) with information as to whether changes are needed in the Medicare reimbursement methodology and rate for the drug, EPOGEN (EPO), used to treat end stage renal disease patients. We have found that changes are needed and have recommended that, in the short run, HCFA consider reducing the reimbursement rate not to exceed $10.10 per 1,000 units administered which would result in savings of $27.5 million to the Medicare program and $6.9 million to the beneficiaries. For a long-term solution, we have recommended that HCFA enter into negotiations with Amgen, the drug manufacturer, to lower the rate and also consider rebates to the Medicare program based on the volume of EPO usage.

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