Amgen in Epogen supply deal with DaVita

AP News
Posted: Nov 18, 2011 6:00 PM
Amgen in Epogen supply deal with DaVita

Biotechnology company Amgen Inc. said Friday it reached an agreement to supply its anemia drug Epogen to dialysis center operator DaVita Inc. for the next seven years.

Amgen said it will supply enough Epogen to cover at least 90 percent of DaVita's requirements for the U.S. and Puerto Rico. The agreement starts Jan. 1 and will end Dec. 31, 2018. Denver-based DaVita runs almost 1,800 outpatient dialysis centers nationwide. The new deal replaces a one-year supply contract for 2011. While Amgen said the agreement provides for discount pricing and rebates for Epogen, it could still bolster sales of a drug that has been hurt by safety concerns and other restrictions.

Additional terms of the agreement weren't disclosed.

Epogen boosts oxygen-carrying red blood cells, reducing the need for painful blood transfusions. However, sales were hurt in 2009 when a study suggested Epogen and drugs like it can double the risk of stroke. Doctors had previously assumed that higher doses would help prevent heart attack, stroke and other cardiovascular problems. In June 2011, the Food and Drug Administration said doctors should use lower doses of the drugs when treating patients with failing kidneys because of increased risk of stroke, blood clots and death.

Medicare and Medicaid have also proposed new limits on reimbursement on the drugs. Amgen, based in Thousand Oaks, Calif., said the safety warnings and those proposed limits could reduce use of the drugs by 20 to 25 percent.

In the most recent quarter ended in September, Epogen sales declined 27 percent to $476 million amid an updated safety warning and the restrictions on Medicare reimbursement.

Shares of Amgen fell 34 cents to $55.57 on Friday, and the stock was unchanged in aftermarket trading.