Translating Epoetin Research Into Practice: The ...

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Arlen Specter (R-PA), chair of the subcommittee over- seeing the CMS budget, pointedly encouraged the CMS to reverse its position and raise the ninety-day ...
At the Intersection of Health, Health Care and Policy Cite this article as: Dennis Cotter, Mae Thamer, Krishnan Narasimhan, Yi Zhang and Kim Bullock Translating Epoetin Research Into Practice: The Role Of Government And The Use Of Scientific Evidence Health Affairs, 25, no.5 (2006):1249-1259 doi: 10.1377/hlthaff.25.5.1249

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Health Affairs is published monthly by Project HOPE at 7500 Old Georgetown Road, Suite 600, Bethesda, MD 20814-6133. Copyright © 2006 by Project HOPE - The People-to-People Health Foundation. As provided by United States copyright law (Title 17, U.S. Code), no part of Health Affairs may be reproduced, displayed, or transmitted in any form or by any means, electronic or mechanical, including photocopying or by information storage or retrieval systems, without prior written permission from the Publisher. All rights reserved.

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Translating Epoetin Research Into Practice: The Role Of Government And The Use Of Scientific Evidence Untested research findings have been translated too quickly into policy that encourages large epoetin doses. by Dennis Cotter, Mae Thamer, Krishnan Narasimhan, Yi Zhang, and Kim Bullock ABSTRACT: Spending for epoetin is Medicare’s single largest drug expenditure. We chronicle the evolution of epoetin policy based on a lack of well-designed post–Food and Drug Administration approval studies demonstrating clinical benefit; congressional/federal agency reliance on clinical practice guidelines that might have misinterpreted evidence supporting causality; and the premature translation of research into practice and policy. Were the right choices made? Epoetin showcases the risk and benefit conundrum created when evidentiary standards are relaxed. Our review concludes with broad-based policy recommendations for the newly implemented Medicare Part D program. [Health Affairs 25, no. 5 (2006): 1249–1259; 10.1377/hlthaff.25.5.1249]

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h e c o n g r e s s i o na l b u d g e t o f f i c e e s t i m at e s that the recent implementation of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA), Part D, will require a budget of $558 billion from 2004 to 2013. This investment demands coverage and reimbursement polices that maximize benefit and minimize risks and costs, particularly among those who suffer from chronic illnesses. Implementation of Part D requires scrutiny of expensive therapies and necessitates evidence-based decisions, based on methodologically sound scientific studies. The process by which fair and equitable benefit coverage is formulated is the subject of much debate. In the past, the Centers for Medicare and Medicaid Services’ (CMS’s) decision making often has been influenced by clinical practice guidelines that can be flawed by study design and biased from fiDennis Cotter ([email protected]) is president of the Medical Technology and Practice Patterns Institute Inc. (MTPPI) in Bethesda, Maryland. Mae Thamer is a senior associate there. Krishnan Narasimhan is an assistant professor in the Georgetown University Department of Family Medicine, in Washington, D.C. Yi Zhang is a senior Analyst at the MTPPI. Kim Bullock is primary care health policy fellowship director in the Georgetown University Department of Family Medicine.

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nancial interests. Recombinant human erythropoietin (rHuEPO, or epoetin) is the only pharmacotherapy, among a limited number of injectible drugs, now covered by Medicare that has consistently relied on clinical practice guidelines as justification for its policy. Spending for epoetin therapy is now the single largest Medicare drug expenditure ($1.75 billion in 2005) and is the second-largest source of dialysis facility income (approximately 22 percent).1 The largest source is a predetermined payment (exclusive of injectibles) for each dialysis treatment; that rate has changed minimally in the past twenty years, and the real dollar value has actually declined by about 65 percent. Liberalization of the coverage benefit for epoetin therapy over the years has created a financial incentive for its increased use. The epoetin experience, therefore, serves as a compelling example of the consequences of payment policy changes. Our general contention for presenting this case study is that treatment of chronic conditions such as anemia consumes a disproportionate share of the health care budget and should be validated by proven clinical benefit. For epoetin, no scientific studies support the attainment of hematocrits higher than the original Food and Drug Administration (FDA)–approved target hematocrit; studies of treatments at higher target hematocrits have shown either no benefit or detrimental effects to patients. Given this predicament, actions by the manufacturer, providers, and the federal government (Congress, the FDA, and the CMS) merit attention. They offer a unique look at the underpinnings of the science base supporting clinical effectiveness claims, policy formation, and the consequences of these actions to determine if the right choices were made.

Congressional/Federal Decisions n

CMS policy changes. Once epoetin was approved by the FDA, the primary mechanisms to influence its use were the coverage and reimbursement policies of health insurers. Since the FDA’s first approval of epoetin in June 1989, the CMS has changed the coverage and reimbursement policies for this drug in a series of controversial policy decisions. For almost two decades the greatest controversy has surrounded the anemia management treatment goal—that is, the target hematocrit, a measure of red blood cell mass that determines dosage requirements and thus costs. Initially, in 1989, the CMS accepted the FDA’s recommended target range of 30–33 percent as its cutoff for reimbursement (Exhibit 1). In 1994 the CMS adjusted its epoetin coverage policy to reflect the FDA-approved labeled indication that broadened the upper limit from a target hematocrit range of 30–33 percent to one of 30–36 percent. Epoetin spending soared from $246 million in 1991 to $735 million in 1997.2 In an attempt to contain epoetin spending, the CMS enacted a rule in August 1997 that clinics would not be paid for the last month’s dosage of epoetin if a patient’s hematocrit went over 36.5 percent for a three-month average. The agency also eliminated physicians’ ability to make exceptions to its hematocrit guidelines. During the next few months, the average patient hematocrit stopped rising, and government

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EXHIBIT 1 Highlights Of Epoetin Policy Changes, 1989–2006 Coverage policies

Reimbursement policies

In 1989 the FDA set the initial target hematocrit range The CMS first used a capitated payment scheme (fixed at $40 per dose for doses up to 10,000 units and at 30–33 percent (maximum 36 percent) $70 per dose for doses over 10,000 units) for the In 1994 the FDA expanded the range to 30–36 first eighteen months of coverage that encouraged percent, based largely on arguments regarding the low doses (July 1989–January 1991) variability and fluctuation of patient (hematocrit) response to epoetin (June 1994–present) In 1989 CMS policy was based on the FDA’s 30–33 percent target In 1997 the CMS broadened coverage to a rolling ninety-day average hematocrit of 36.5 percent; in 1998 it was further broadened to 37.5 percent

The CMS switched to a volume-driven “fee-for-service” national payment rate (in 1991, $11 per 1,000 units; in 1994, $10 per 1,000 units; in 2005 $9.96 per 1,000 units) that encouraged high doses (January 1991–March 2006)

In the new CMS policy, should the dose exceed In April 2006, the CMS’s new policy would permit 500,000 IU per month, the claim will be denied (April hematocrit values to rise to any level. However, 2006–present) should they exceed 39 percent, the amount of epoetin administered must be reduced by at least 25 percent in the subsequent month SOURCES: Compiled by the Medical Technology and Practice Patterns Institute (MTPPI) based on numerous coverage and payment instructions by the Centers for Medicare and Medicaid Services (CMS) to its intermediaries and contractors. Most prominent are Health Care Financing Administration (HCFA), “Part 1-Chapter 27: Reimbursement for ESRD Services and Transplant Services,” Medicare Provider Reimbursement Manual, Pub. no. 15-1-27 (Baltimore: HCFA, July 1989); DHHS/HCFA Program Memorandum AB-97-2, March 1997 (coverage limit—90-day rolling average of hematocrit is 36.5 percent); Program Memorandum AB-98-34, July 1998 (coverage limit—90-day rolling average of hematocrit is 37.5 percent); and CMS Manual System, Pub. no. 100-04, Medicare Claims Processing CMS Transmittal 751, Date: November 10, 2005, Change Request 4135, Subject: National Monitoring Policy for EPO and Aranesp for End Stage Renal Disease (ESRD) Patients Treated in Renal Dialysis Facilities. NOTES: FDA is Food and Drug Administration. IU is international unit.

spending for epoetin leveled off. Two months later the manufacturer, Amgen, requested that the CMS consider a more flexible reimbursement guideline by again raising the upper end of the reimbursement ceiling, citing both physiological and secular factors.3 A Senate committee (1998), in support of the manufacturer, requested that the CMS defend its new ninety-day rolling average of 36.5 percent, which the committee deemed to be too low. In defense of its policy, the CMS cited evidence that indicated potential harm to patients with cardiac conditions on epoetin therapy at higher hematocrit levels.4 Nevertheless, Sen. Arlen Specter (R-PA), chair of the subcommittee overseeing the CMS budget, pointedly encouraged the CMS to reverse its position and raise the ninety-day rolling average target hematocrit cutoff to 37.5 percent.5 Allowance for medical justification for higher hematocrits also was reinstated in the regulations. Most recently, in April 2006, the CMS instituted yet another broader epoetin payment policy, allowing hematocrit to rise to 39 percent and above. If the hematocrit exceeds 39 percent, however, the provider must reduce the epoetin dosage by 25 percent in the month when the “first” hematocrit is above this level. If the dosage is not reduced and there is no medical documentation to support the higher dosage, the CMS will reduce that month’s payment by 25 percent. The

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maximum allowable epoetin level is 500,000 international units (IUs) per month.6 Given this new policy, it is anticipated that providers will respond to the new financial incentive with more aggressive use of epoetin to treat anemia, particularly given the perceptions that no harm is associated with larger doses and that higher hematocrit levels improve clinical benefits.7 Implementation of this rule prompted Congress to question CMS authority in (1) “undermining confidence” in the Department of Health and Human Services’ (HHS’s) decision-making processes; and (2) creating a “special policy based on different information than the FDA label,” raising concerns of inappropriate Medicare spending and patient safety.8 n Lower payments, higher dosages. In addition to congressional oversight regarding the appropriate target hematocrit, epoetin has the unusual precedent of having the U.S. Congress step in to set Medicare payment amounts.9 Because Medicare covers more than 90 percent of end-stage renal disease (ESRD) patients through its entitlement program, Congress expressed concern about epoetin spending and intervened. Motivated by a 1990 Office of Inspector General (OIG) report that the original $40 per dose reimbursement allowed facilities to profit by administering dosages lower than the amount of epoetin purchased, Congress changed Medicare reimbursement policy from fixed to volume-driven drug payment, shifting incentives away from research related to optimized dosing and toward research related to justification of higher hematocrit levels. Concern about rising costs caused Congress to implement a payment reduction of $1 per 1,000 units in 1994 and to consider yet another reduction in 1999, with little impact. Investment research analysts who follow epoetin market developments noted, “A similar 10% cut in 1994 did not affect Amgen’s pricing on Epogen. In fact, the dialysis centers compensated for the lower reimbursement by using more Epogen.”10 Consequently, the higher the amount of epoetin administered, the higher the Medicare payment was, resulting in a rapid increase in dosage levels. Between 1991 and 2003, the average dose of epoetin increased more than 300 percent. Resolution of the controversy surrounding the target hematocrit and its relationship to optimal epoetin dosage has important implications, for both the putative beneficial and adverse outcomes of epoetin therapy and prodigious costs to Medicare. Generally, when a new covered benefit exposes Medicare to financial liability, the CMS conducts a formal national coverage determination (NCD) evaluation. However, virtually all of the early assessments of epoetin were centered on the payment amounts and methods and not on the clinical benefits. Given the considerable departure from an FDA-recommended low epoetin-dosing regimen, by July 2001, 42 percent of ESRD dialysis patients exceeded the FDA-recommended target hematocrit range. To date, no formal assessment of the appropriate dosing levels has been conducted, nor has a payment policy been implemented to encourage optimal dosing, and, according to the CMS, this has led to overuse of epoetin.11

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Clinical Practice Guidelines And Medicare Epoetin Policy Reliance on clinical practice guidelines in the formation of policy is the subject of much debate. Frequently, the CMS and its contractors make coverage and reimbursement decisions based on assessment of the best available evidence, often soliciting such information from the public. Policy formation can be influenced by guideline recommendations that are flawed by inclusion of poorly designed studies in the science base, misapplication of established assessment methodologies, or bias resulting from financial interests. All of these evidentiary problems are found in the evolution of Medicare’s epoetin therapy policy. Amgen sponsored the Kidney Disease Outcomes Quality Initiative (KDOQI) of the National Kidney Foundation (NKF), an assessment process that purported to be an evidence-based approach to evaluating the medical literature.12 However, a rigorous review of the evidence used to support KDOQI’s 2000 “Guideline 4: Target Hemoglobin/Hematocrit for Epoetin” recommendations yielded major deficiencies. Notably, the priority scores (that is, the weights) for cited studies were never published, and the evaluation techniques did not elicit “linkages in the causal pathway between intervention and outcome.”13 Specifically, KDOQI 2000 used a few randomized clinical trials (RCTs), expert opinion, and numerous industry-sponsored observational studies based on Medicare claims and other administrative data that suggest, for any given snapshot of the treated population, that patients who achieved higher hematocrits tended to have better clinical outcomes. Thus, both researchers and guideline developers have interpreted the evidence of an association between treating anemia with higher epoetin doses and improved clinical outcomes as an indicator of causality. Results from RCTs, in contrast to observational studies, have consistently shown that patients assigned to higher hematocrit target levels do not show discernible improvements in survival, hospitalization, or cardiac outcomes. In fact, they could be prone to adverse cardiovascular events that include myocardial infarction, vascular access thrombosis, increased use of antihypertensive medications, and cerebrovascular events.14 Despite the fact that “raising people with hematocrits already in the mid-30s higher would take three times as much EPO and have very small benefits at best[,] …Amgen continues to fund studies that seek to link higher hematocrits to better outcomes for dialysis patients.”15 Studies cited in KDOQI implicitly used hematocrit as an intermediate or surrogate endpoint. Use of surrogate measures is widespread and long-standing, given the potential to reduce sample size, time, and costs. There are numerous examples in the literature of failed surrogates.16 Only a few biomarkers (for example, blood pressure and cholesterol as cardiovascular biomarkers) are well enough established to serve as surrogate endpoints.17 Using surrogate endpoints, researchers can draw incorrect conclusions, because surrogates might have no effect on the actual endpoint, or, in a second scenario, treatments can affect outcomes through unanticipated causal pathways that are unrelated to the surrogate endpoint.

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In their review of surrogate endpoints, Peter Gotzsche and colleagues observed that “use of erythropoietin…is expensive…[and is] often justified…by hemoglobin level and not the patients’ clinical state.”18 The CMS’s own policy “places greater emphasis on health outcomes actually experienced by patients, such as quality of life, functional status, duration of disability, morbidity, and mortality, and less emphasis on outcomes that patients do not directly experience, such as intermediate outcomes, surrogate outcomes, and laboratory or radiographic responses.”19 Despite this requirement, and possible evidence to the contrary, the CMS continues to use a target hematocrit, both as a benchmark for guiding Medicare payments and as a performance measure for profiling the quality of care given by dialysis providers.20 Among other clinical benefits cited, the purported survival benefits associated with epoetin culminated in the KDOQI recommendation of a target hematocrit range of 33–36 percent, higher than the FDA-recommended range.21 Moreover, in numerous policy instructions, the CMS has cited KDOQI’s target hematocrit recommendations as the basis, in part, for its epoetin Medicare policy.22

Monitoring Epoetin Therapy After FDA Approval A rational approach to prescribing a dose is essential to attain the requisite understanding of optimal dose and, subsequently, reasonable cost. In an early attempt to demonstrate prudent dosing, Dominik Uehlinger argued that “with such high rHuEPO doses nearly all patients are in the flat part of the dose response curve.”23 With lower dosing and incremental increases, faster hematocrit steadystate can be achieved. Beginning with higher dosing to target an appropriate value can lead to excess epoetin with no increase in efficacy. Given that clinical trials targeting higher hematocrit levels have demonstrated adverse outcomes, proponents now argue that higher targets are necessary to accommodate hematocrit variability, a phenomenon attributed to a variety of treatment and comorbid conditions. This very thesis has been used both to broaden the FDA label and to set the upper limit of Medicare coverage. Studies have been conducted to document hematocrit fluctuations. But such studies control neither for the dose nor for the cited complicating factors. Unless the “variability” argument is supported by studies that have controls for these factors, it is very difficult to assess the need for such latitude.24 Ideally, to fully assess the clinical benefit and appropriate dosing of a new drug, mandated FDA postapproval drug studies should elucidate both physiological and clinical responses, under “real-world” conditions, for different dosage regimens. Although the completed Phase IV study for epoetin never was reported publicly, the manufacturer presented FDA staff with new information, revealing that “50% of dialysis patients still have hematocrits below 30 percent,” and requested an expansion of the target hematocrit range, from 30–33 percent to 30–36 percent, to correct this condition.25 In June 1994 the FDA approved Amgen’s re-

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“The CMS has tacitly implemented a policy that does not appear to confer additional proven benefit to its beneficiaries.” quest. The information upon which this decision was based also never has been made public.26 Likewise, safety issues surrounding epoetin, particularly the increased risk of hypertension and other forms of cardiovascular disease that a completed Phase IV study should have addressed, remain unanswered.27 Seventeen years after approval, valid evidence linking specific processes of care (for example, epoetin, iron, and nutritional status) to clinical outcomes still is needed to improve decision making about anemia management.

Cost And Quality Implications Of Epoetin Coverage Policy When the provider treats epoetin as a cost instead of a revenue source, the differential is noteworthy. For example, virtually all Medicare hemodialysis patients receive larger intravenous doses, targeted to the 33–36 percent hematocrit range, in contrast to Department of Veterans Affairs (VA) hemodialysis patients, who receive smaller subcutaneous doses targeted to the 30–33 percent hematocrit range. Denise Hynes and colleagues showed that if Medicare patients switched to subcutaneous dosing, a 32 percent decrease in epoetin requirements would result.28 The potential Medicare cost savings, if the CMS had retained the initial lower FDAmandated hematocrit target, are even more dramatic given that a three-percentage-point increase in hematocrit value such as occurred when the hematocrit target was changed from 30–33 percent to 33–36 percent could require up to a 50 percent increase in dosage. Surprisingly, despite the high cost of epoetin, few studies have examined quality and costs. In one such study, Marcell Tonelli found that hematocrits higher than 36 percent were associated with an unfavorable cost-effectiveness ratio.29 Quality-of-life benefits associated with epoetin use are equivocal. According to the Cochrane analysis of epoetin therapy, “EPO is widely reported to improve quality of life.” Quality-of-life data were problematic because nonvalidated scales were used, events to be analyzed were not specified, and only positive results were presented. Reporting of quality-of-life improvement often was based upon improvement of individual items of quality of life rather than a more global assessment. An analysis by the Agency for Healthcare Research and Quality (AHRQ) revealed the same poor scientific evidence to support quality-of-life improvements based on epoetin use.30 The controversy surrounding epoetin is not about the ability of the drug to achieve higher target hematocrits. Rather, at issue is the regulatory decision process used, or misused, to support achieving higher target hematocrits, which do not appear to improve quality of life or survival when reported studies are properly scrutinized. By increasing the target hematocrit to a ninety-day rolling aver-

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age of 37.5 percent and, most recently, to 39 percent and higher, the CMS has tacitly implemented a policy that does not appear to confer additional proven benefit to its beneficiaries.

Lessons Learned From The Epoetin Experience The processes used to establish a valid science base, to formulate clinical practice guideline recommendations, and to devise Medicare payment rules have substantial policy importance for decision making related to approval of, use of, and payment for Medicare Part D drugs. n The research base. To advance the knowledge base, well-designed and completed follow-up studies elucidating both physiological and clinical responses at different dosage levels would help resolve any contradictions between conclusions drawn from observational studies, which often pervade the literature, and those drawn from clinical trials. Ideally, such studies should use the actual outcomes of interest, such as mortality, morbidity, and quality of life, in contrast to using surrogate endpoints such as blood pressure and hematocrit, to form a sound scientific basis for decision making. The CMS should continue to be wary of basing policy on surrogate endpoints unless they can be validated. One way to ensure validity is to embrace one of the options under consideration by the Institute of Medicine (IOM): namely, government-funded, independent sponsorship of postmarketing trials.31 Appropriate analysis of Medicare claims data provides an economical way to conduct such trials.32 Such methods could provide additional valid evidence by linking specific processes of care to clinical outcomes, and the results also could complement the FDA’s postmarketing surveillance responsibilities. Despite heightened efforts to impose scientific rigor, the science base for many technologies, including epoetin, continues to be based on flawed analyses, dependence on surrogate outcomes, and misinterpretation of observational study results. A causal relationship between treatment response and clinical outcomes should not be inferred from associational studies. It is imperative that the content and analysis of the science base, for clinical practice guidelines and for future Medicare drug coverage decisions, adhere to established hierarchy of evidence criteria that focus primarily on RCTs, systematic reviews, and meta-analyses, while regarding observational studies with great caution and examining professional opinion for potential bias.33 Methods for developing clinical practice guidelines require transparency because of the considerable opportunity for bias and because ensuing recommendations, if adopted by payers, could have a strong impact on national health spending. Transparency also is essential to prevent both future controversies regarding withholding drug-risk information and failure to disclose financial ties between researchers and drug companies.34 n Industry sponsorship. As research is translated into practice, financial bias and conflict of interest are of increasing concern. When industry depends heavily

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“We propose exclusive public funding for guideline development for drugs used to treat chronic conditions covered by Medicare Part D.” on a single product and a single income source, as in the case of epoetin, and there is a substantial clinical or public health interest at stake, issues of transparency and accountability must be vetted fully to assure public trust in the policy formation process. Industry sponsorship of research has been associated with pro-industry conclusions, as well as restrictions on publication and data sharing.35 According to Jerome Kassirer, given the recent heightened scrutiny, pharmaceutical companies have switched their tactics. They now try to influence guideline recommendations through guideline committee members with financial connections to them and by supporting the organization in other ways.36 In a recent study, 59 percent of experts writing practice guidelines had financial ties to the drug company manufacturing the product they were recommending.37 Because of these compromising developments, we propose exclusive public funding for guideline development for drugs used to treat chronic conditions covered by Medicare Part D. n Optimal level of translation of research into practice. Future assessments of new technologies must be vetted with sufficient rigor before translation of research begins. In our example, epoetin clinical trial results increasingly have contradicted the positive correlation between increased hematocrit and mortality observed in a plethora of observational studies and on which epoetin policy is largely based. Untested research findings have been translated too quickly into policy that encourages large epoetin doses, especially considering that there is no valid evidence to support Medicare’s target hematocrit range. A more prudent approach would be for Medicare Part D reimbursement policies to reflect FDA-recommended dosage amounts, until well-designed studies demonstrate that changes are indicated.

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e r e t h e r i g h t c h o i c e s m a d e ? The case of epoetin highlights the risk and benefit conundrum resulting from reliance on incomplete postmarketing oversight, inappropriate links between surrogate outcomes and clinical benefits, poorly developed guidelines, and relaxation of federal evidentiary standards. Financial incentives created by Medicare policy decisions further distort the orderly development of a well-grounded science base, which is the bedrock of coverage and reimbursement decisions. Those in the community should demand more rigor and accountability from technology proponents and decisionmakers, before important and expensive health care policy decisions are made and implemented at patients’ and taxpayers’ expense. The authors thank Health Affairs’ editorial staff and several anonymous reviewers for their inspired comments. The views expressed here are not necessarily shared by the institutional affiliations of the authors. Funding for development of this paper was provided exclusively by the Medical Technology and Practice Patterns Institute.

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NOTES 1. 2. 3. 4. 5. 6. 7.

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10. 11.

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15. 16. 17. 18. 19. 20.

Department of Health and Human Services, Office of Inspector General, “Medicare Reimbursement for Existing End-Stage Renal Disease Drugs,” OEI-03-04-00120 (Washington: DHHS, OIG, May 2004). U.S. Renal Data System, USRDS 2005 Annual Data Report (Bethesda, Md.: National Institutes of Health, National Institute of Diabetes and Digestive and Kidney Diseases, 2005). Letter from Judi Teske, Amgen Inc., to Charles R. Booth, Health Care Financing Administration (now CMS), 2 July 1997. Letter from NancyAnn Min DeParle, administrator, HCFA, to Sen. Arlen Specter, 13 March 1989. M. Goozner, “The Making and Selling of a Star Drug,” Chicago Tribune, 24 May 1999. The FDA-approved epoetin label states that the maximum amount of epoetin that can be safely administered has not been determined. Certain types of providers dominate the dialysis market; between 1995 and 2005, the market share of freestanding and for-profit facilities increased from 74 percent to 86 percent, and from 65 percent to 78 percent, respectively. In 2005, 60 percent of all dialysis facilities were affiliated with the two largest publicly traded chains: Fresenius and DaVita. Letter from Rep. Bill Thomas, chairman, House Committee on Ways and Means, to Mark McClellan, administrator, Centers for Medicare and Medicaid Services, 25 April 2006. Senate Hearing before the Committee on Appropriations, Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations, Fiscal Year 1999, 105th Cong., 2d sess. H.R. 4274/S. 2440, 10 March 1998, 59–86. M. Ho, S.A. Chiang, and D.C. Chi, “Healthcare Biotechnology Industry Overview” (New York: Goldman Sachs Investment Research, 20 January 1999), 48. Clinical trials have shown that a 3 percent increase in hematocrit value may require as much as a 50 percent increase in epoetin dose. A. Besarab et al., “The Effects of Normal as Compared with Low Hematocrit Values in Patients with Cardiac Disease Who Are Receiving Hemodialysis and Epoetin,” New England Journal of Medicine 339, no. 9 (1998): 584–590. The CMS disseminated a letter soliciting “scientific information from the ESRD community in order to develop a permanent evidence-based policy for EPO monitoring…removing some of the financial incentive that currently promotes overutilization of the drug.” Open Letter from Sean Tunis, chief medical officer, CMS, 22 September 2003. E.P. Steinberg et al., “Methods Used to Evaluate the Quality of Evidence Underlying the National Kidney Foundation–Dialysis Outcomes Quality Initiative Clinical Practice Guidelines: Description, Findings, and Implications,” American Journal of Kidney Diseases 36, no. 1 (2000): 1–11. S.H. Woolf, “An Organized Analytic Framework for Practice Guideline Development,” in Methodology Perspectives, Pub. no. 95-0009, ed. K.A. McCormick et al. (Rockville, Md.: Agency for Healthcare Research and Policy, 1994), 105–113. Besarab et al., “The Effects of Normal as Compared with Low Hematocrit Values”; P.S. Parfrey et al., “Double-Blind Comparison of Full and Partial Anemia Correction in Incident Hemodialysis Patients without Symptomatic Heart Disease,” Journal of the American Society of Nephrolology 16, no. 7 (2005): 2180–2189; A. Laupacis, “A Randomized Double-Blind Study of Recombinant Human Erythropoietin in Anaemic Hemodialysis Patients,” Transplantation Proceedings 23, no. 2 (1991): 1825–1826; and R.N. Foley et al., “Effect of Hemoglobin Levels in Hemodialysis Patients with Asymptomatic Cardiomyopathy,” Kidney International 58, no. 3 (1999): 1325–1335. Goozner, “The Making and Selling of a Star Drug.” See, for example, K.C. Johnston, “What Are Surrogate Outcome Measures and Why Do They Fail in Clinical Research?” Neuroepidemiology 18, no. 4 (1999): 167–173. R. Temple, “Are Surrogate Markers Adequate to Assess Cardiovascular Disease Drugs?” Journal of the American Medical Association 282, no. 8 (1999): 790–795. P.C. Gotzsche et al., “Beware of Surrogate Outcome Measures,” International Journal of Technology Assessment in Health Care 12, no. 2 (1996): 238–246. See, for example, CMS, “Decision Memo for Abarelix for the Treatment of Prostate Cancer,” 15 March 2005, http://www.cms.hhs.gov/mcd/viewdecisionmemo.asp?id=129 (accessed 8 June 2006). D.J. Cotter et al., “Hematocrit Was Not Validated as a Surrogate End Point for Survival among EpoetinTreated Hemodialysis Patients,” Journal of Clinical Epidemiology 57, no. 10 (2004): 1086–1095; and P.R. Frederick et al., “Developing Dialysis Facility–Specific Performance Measures for Public Reporting,” Health Care

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Financing Review 23, no. 4 (2002): 37–50. 21. “NKF-DOQI Clinical Practice Guidelines for the Treatment of Anemia of Chronic Renal Failure: National Kidney Foundation–Dialysis Outcomes Quality Initiative,” and “NKF-K/DOQI for Anemia of Chronic Kidney Disease: Update 2000,” American Journal of Kidney Diseases 30, no. 4, Supp. 3 (1997): S192–S240; and 37, no. 1 Supp. (2001): S182–S238. 22. CMS, “Modification of Medicare Policy for Erythropoietin (EPO),” Program Memorandum Intermediaries/Carriers, Transmittal AB-98-34. 23. D.E. Uehlinger, F.A. Gotch, and L.B. Sheiner, “A Pharmacodynamic Model of Erythropoietin Therapy for Uremic Anemia,” Clinical Pharmacology and Therapeutics 51, no. 1 (1992): 76–89. 24. “Guideline for Industry Dose-Response Information to Support Drug Registration, ICH-E4,” Federal Register 59 (9 November 1994): 55972. 25. The situation is not unique to epoetin. In 1997 Congress passed the FDA Modernization Act with a new section 506B (21 U.S.C. 356b) that provided additional authority for monitoring the progress of postmarketing studies but no enforcement power. Two-thirds of the 1,231 studies that companies promised have not started. 26. Letter from Robert Church, senior counsel, Amgen Inc., to Dennis Cotter, Medical Technology and Practice Patterns Institute, 10 September 2002; and letter from Robert H. Brauer, vice president of law and associate general counsel, Amgen Inc., to Cotter, 12 December 2001. 27. N.D. Vaziri, “Cardiovascular Effects of Erythropoietin and Anemia Correction,” Current Opinion in Nephrology and Hypertension 10, no. 5 (2001): 633–637. 28. D.M. Hynes et al., “Potential Cost Savings of Erythropoietin Administration in End-Stage Renal Disease,” American Journal of Medicine 112, no. 3 (2002): 169–175. 29. M. Tonelli et al., “The Cost-Effectiveness of Maintaining Higher Hemoglobin Targets with Erythropoietin in Hemodialysis Patients,” Kidney International 64, no. 1 (2003): 295–304. 30. G.F. Strippoli et al., “Haemoglobin and Haematocrit Targets for the Anaemia of Chronic Renal Disease,” Cochrane Database of Systematic Reviews 2003, Issue 1, http://www.cochrane.org/reviews/en/ab003967.html (accessed 8 June 2006); and AHRQ, “Use of Epoetin for Anemia in Chronic Renal Failure” (Rockville, Md.: AHRQ, August 2001). 31. C. Werble, “Drug Safety Reform: Did FDA Buy Time or Trouble?” RPM Report: Regulation, Policy, Market Access 1, no. 5 (2006): 1–7. 32. Analysis of administrative data must grapple with the confounding effects of unobserved events. See Medical Technology and Practice Patterns Institute, “An Opportunity to Improve Quality of Care in the Medicare Program using Enhanced Administrative Data,” http://www.mtppi.org/frameset.asp?Pg=/physio .asp&MI (accessed 31 May 2006). 33. R.L. Kane, “Creating Practice Guidelines: The Dangers of Over-reliance on Expert Judgment,” Journal of Law, Medicine, and Ethics 23, no. 1 (1995): 62–64. 34. T. Hampton, “Biomedical Journals Probe Peer Review,” Journal of the American Medical Association 294, no. 18 (2005): 2287–2288. 35. J.E. Bekelman, Y. Li, and C.P. Gross, “Scope and Impact of Financial Conflicts of Interest in Biomedical Research: A Systematic Review,” Journal of the American Medical Association 289, no. 4 (2003): 454–465. 36. J.P. Kassirer, On the Take: How Medicine’s Complicity with Big Business Can Endanger Your Health (New York: Oxford University Press, 2004). 37. N.K. Choudhry, H.T. Stelfox, and A.S. Detsky, “Relationships between Authors of Clinical Practice Guidelines and the Pharmaceutical Industry,” Journal of the American Medical Association 287, no. 5 (2002): 612–617.

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