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Medicare to add coverage of Enbrel for some patients

By Luke Timmerman
Seattle Times business reporter

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The coverage, tucked in the new Medicare law that covers drugs for seniors, includes some expensive biotech drugs that patients can inject themselves like Enbrel and a rival, Abbott Laboratories' Humira.

Medicare generally has not covered self-administered drugs, but it has covered drugs if they were given in a hospital or doctor's office.

Starting in 2006, Medicare will temporarily cover self-administered biotech drugs for a limited number of patients with rheumatoid arthritis. It will not cover Enbrel for the other diseases the drug has U.S. Food and Drug Administration approval for, said Amgen spokeswoman Andrea Rothschild.

Immunex, the Seattle biotech company that created Enbrel and sold it to Amgen a year ago, lobbied the government for years to pay for the drug. It was a sore spot in the competition with Johnson & Johnson's Remicade, which is given intravenously in a doctor's office and has long been covered by Medicare.

Medicare coverage isn't expected to greatly boost Enbrel sales, Rothschild said. Most Enbrel patients are under 65 and covered by private insurance, and some seniors buy private health insurance to pay for Enbrel, she said.

"We're not expecting a big revenue upside because we're already covered by the big payers, but this will give us more access to patients," Rothschild said.

This year, Amgen has said it expects to collect $1.2 billion to $1.4 billion from Enbrel sales, and the company's 2004 financial forecast is due out next week. The Thousand Oaks, Calif.-based company said a year ago, when it paid $10 billion in stock and cash to take over Immunex, that it believes the drug will hit $3 billion in sales in 2005.

Regardless of Medicare coverage, Amgen has been on a roll with Enbrel since it took control a year ago. Amgen fixed its biggest problem — the shortage — when it opened a factory in Rhode Island on time.

It won FDA approval to market the drug for treatment of ankylosing spondylitis, a spinal inflammatory disease. It can also claim Enbrel slows joint damage of patients with psoriatic arthritis. Last quarter, Amgen said it had 115,000 patients on Enbrel.

Next year, Amgen expects Enbrel to win FDA approval in a large new market — psoriasis. It also plans to ask the FDA to approve once-a-week Enbrel shots, an edge over the current twice-a-week schedule.

Frank DiLorenzo, a biotech analyst with Standard & Poor's in New York who doesn't own Amgen stock, said the Medicare coverage doesn't appear to be a windfall, but Enbrel is performing.

"Amgen didn't buy the firm on the cheap, but in hindsight, it has turned out well for them," DiLorenzo said.

Luke Timmerman: 206-515-5644 or ltimmerman@seattletimes.com

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