A Big Kidney meeting gets under way in Orlando this week and one Wall Street analyst foresees trouble for Amgen. After surveying 179 docs on their use of Epogen and the extent to which Medicare reimbursement is a factor in treating patients with End-Stage Renal Disease, Marc Schoenebaum of Bear Stearns thinks Epogen volume could drop 8 percent.

That’s because there may changes to current hemoglobin-level guidelines in chronic kidney disease that were developed by the NKF’s Kidney Disease Outcomes Quality Initiative. The upper hemoglobin target may be reduced from 13 to 12. You may recall there’s been controversy over allegations that Medicare financial incentives led to over use.

In an investor note this morning, Schoenebaum writes that almost all of surveyed docs were aware of study data showing Epogen may not offer an advantage but could poses a cardiovascular risk and subsequent Black Box warnings. Most also responded that Medicare reimbursement doesn’t effect usage.

Still, he wrote, “the impact of potential reimb. changes was very likely under-reported. If Medicare lowers upper end of reimbursable Hb level from 13 to 12, our survey says volumes
could fall at least 8 percent, (this assumes all 34 percent of patients with Hb levels over 12 receive the average dose reduction of 23 percent).

And so he cut his earnings estimate by 2 percent and lower his price target on the stock by a $1, to $72.

A round-up piece in Medscape about the controversy;
The National Kidney Foundation initiative;
You can read more about the Big Kidney meeting here.

[tags]Amgen, Epogen, Medicare[/tags]