Amgen, Inc., manufacturer of ESAs Epogen and Aranesp which help to treat chemotherapy-induced anemia in cancer patients by reducing the need for risky blood transfusions, has begun to lay off workers as part of its company restructuring in the wake of all the scrutiny that its top drugs have been under in 2007 after studies have shown that their over prescribing has led to heart attacks, strokes, blood clots, and premature death. Amgen, which employs over 20,000 workers worldwide, announced in August that it would have to cut 12-14% of its total workforce—roughly 2,600 jobs. Involuntary layoffs have begun in several locations: 675 of the 8,200 workers in Thousand Oaks, CA; 50 of the 1,100 workers in Bothell and Seattle, WA; and 23 of the 1,250 workers in Longmont and Boulder, CO. In addition to involuntary layoffs, roughly 700 workers worldwide accepted voluntary buyouts. Severance packages for laid off workers include cash (a minimum amount of 24 weeks of pay), company-paid health insurance through the end of 2008, and career transition services which offer workshops, a job bank and job fairs. A number of companies have expressed interest to Amgen in hiring laid off workers who have a certain level of expertise in their field.

The Thousand Oaks, CA location is Amgen’s headquarters and it, along with offices in Rhode Island, bore the brunt of the 1,500 layoffs.

In Washington, not only have workers started getting laid off, but plans for facility expansion have been postponed; just last year plans for expansion were underway, which could have doubled the workforce in WA, but the company has felt grave effects of the scrutiny over the ESAs.

Ventura County Star: “Layoffs at Amgen Begin”

Seattle Post-Intelligencer: “Amgen Lays Off 50 in Seattle, Bothell”

The Denver Post: “Amgen Lays Off 23 Colo. Workers”

According to Reuters, CMS (the Centers for Medicare and Medicaid Services) sent a letter to doctors and others who were trying to pressure it into reviewing its newly revised strict reimbursement guidelines for Amgen’s Aranesp and Epogen and Johnson & Johnson’s Procrit used to treat chemotherapy-induced anemia in cancer patients, which stated firmly that in the absence of scientific evidence to the contrary, it felt that its new reimbursement guidelines for ESAs are in the best interest of the patients and founded upon the results of clinical studies. Amgen, along with a coalition of doctors, organizations and health centers, contends that the new reimbursement guidelines compromise the quality of care that doctors can offer their patients. Arguing that CMS’s guidelines have no scientific basis, opponents claim that the guidelines could in fact hurt patients by making hemoglobin levels to drop to dangerously low levels before allowing treatment coverage. CMS denies the claims made by the opposition and says that unless it gets some questions answered within the next 30 days, its reimbursement guidelines will remain as they are. Two specific questions that CMS wants answered are: (1) is it a requirement that chemotherapy patients’ hemoglobin levels are above 10g/dL? and (2) is ESA treatment a superior alternative to blood transfusions in order to maintain the 10g/dL level?

As it stands now, CMS will only cover ESA treatment for cancer patients who suffer from chemotherapy-induced anemia when those patients’ hemoglobin (red blood cell) level is below 10g/dL because studies have shown that treatment at higher hemoglobin levels can increase the patients’ chances of suffering heart attacks, stroke, and premature death. Until new evidence is introduced to CMS, these guidelines will remain in place not only for cancer patients but also for those undergoing kidney dialysis treatment, of which it maintains similar reimbursement guidelines for ESA treatments.

Opponents to the CMS guidelines include doctors, the American Society for Clincial Oncology (ASCO), the American Society of Hematology, US Oncology (cancer treatment center company), and other for-profit cancer and kidney treatment centers.

Reuters: “Medicare Seeks Evidence to Support Anemia Change”

Boston.com: “Medicare Unlikely to Reverse Cuts in Anemia Drug Payments”

Los Angeles Times: “Medicare to Keep Limits on Anemia Drugs”

“Medicare to Stand by Limits on Anemia Drugs Unless ‘New Evidence’ Is Submitted”

CNBC: “Medicare: We Want Proof On Anemia Drugs”

On September 11, 2007 the U.S. Food and Drug Administration heard from an advisory panel of 19 on the question of whether or not to limit the hemoglobin (red blood cell) level of kidney-failure patients (both those who are and who are not undergoing dialysis) to not exceed 11 grams per deciliter [g/dL]. In a 14 to 5 split, the panel voted against setting a specific target level of 11 g/dL, stating that it was uncomfortable with setting a specific target in the absence of evidence proving that a level of 11 g/dL was safer than 12 g/dL. The panel explained that it was more in favor of leaving it up to the doctor’s discretion about how to treat each individual patient, and felt more comfortable with advising the FDA that a range of 10-12 g/dL was more appropriate since doctors could treat patients up to 12 g/dL (even though 9 out of 19 panelists were in favor of an 11-11.5 g/dL maximum).

The panel’s implied target range is exactly the range that Amgen and Johnson & Johnson had hoped for. The two drug companies manufacture and market ESAs to treat kidney disease and cancer patients suffering from anemia. Amgen’s Epogen is used to treat most of the 350,000 U.S. kidney disease patients undergoing dialysis, while it’s Aranesp along with J&J’s Procrit are used to treat cancer patients as well as most of the 250,000 kidney disease patients who are not undergoing dialysis. For patients undergoing treatment with these ESAs, proper hemoglobin levels are vital to maintaining their health. Studies—for example the Normal Hematocrit Cardiac Trial and the Correction of Hemoglobin and Outcomes in Renal Insufficiency (CHOIR)—have shown that improper ESA dosages can increase hemoglobin levels in excess of 13 g/dL which has lead to death, heart attacks, strokes, heart failure and blood clots in patients. However, if prescribed properly, the ESAs can help patients maintain suitable hemoglobin levels which eliminate the need for risky and inconvenient blood transfusions. From these studies, the FDA has determined that 11 g/dL would be a proper hemoglobin level. Panelists, however, are reluctant to set an 11 g/dL target level because of testimony that it heard explaining that setting too high a limit could cause some patients to go under treated, which could result in their suffering from debilitating anemia or more blood transfusions.

Amgen and J&J are working together with the FDA to reach a consensus on which hemoglobin level (or range) is appropriate to place on new warning labels. The health risks that have come to light in the past few months have prompted the FDA to make changes on warning labels and, in determining which level should appear on the label, the FDA called this panel. Even though the FDA is not required to follow the advice of its panels, it generally does so. This could mean that a 10-12 g/dL range could be adopted by the FDA for its warning labels, which could affect both the way that doctors prescribe the ESAs as well as how the U.S. Medicare Insurance program reimburses the drugs. The Centers for Medicare & Medicaid Services has recently revised its reimbursement guidelines, which some private insurers are likely to follow. A change to the levels on warning labels could affect these guidelines.

Click the following links to read the full version of articles that contributed to this posting:

Associated Press (in Forbes): “FDA Panel: Widen Target for Anemia Drugs”

The Boston Globe: “Panel Says Anemia Drug Doses OK As Is”

Reuters: “Amgen Defends Anemia Drugs Before U.S. Panel”

AHC Media LLC: “FDA Panel Vote on Anemia Drugs Gets Mixed Reviews”

“Amgen and Ortho Biotech Breathe Collective Sigh of Relief After FDA Panel Vote”

“FDA Panel Votes Against Anemia Drug Restrictions”

Reuters: “US Panel Rejects Anemia Drug Limit in Non-Dialysis”

“FDA Hemoglobin Target for Amgen, J&J Anemia Drugs Too Narrow”

Reuters: “US Advisers Against Anemia Drug Restrictions”

The New York Times: “F.D.A. Advisory Panel Opposes Curb on Anemia Drugs”

The Wall Street Journal: “FDA Panel Vote Is a Win for Amgen, J&J”

The following are related articles:

“Amgen Bulls Running Wild”

Los Angeles Business Journal: “Panel Says Anemia Drug Dosage OK”

Many news sources have published articles regarding Amgen’s recent announcement that it will undergo restructuring due to declining sales of two of its blockbuster drugs, anemia drugs Aranesp and Epogen. Included in the restructuring is, first, a 12% to 14% cut in the company’s workforce of 20,000, which is a loss of 2,200 to 2,600 employees. Next, capital expenditures will be reduced by about $1.9 million between 2007 and 2008. Further, certain operations facilities will be closed down while others will be reduced in size for efficiency purposes. Also, the adjusted earnings per share guidance has been lowered to between $4.13 and $4.23 per share from previously estimated $4.28 per share. Restructuring pre tax charges are estimated between $600 million and $700 million for 2007 and 2008, but the restructuring plans implemented by Amgen are estimated to save the company between $1 billion and $1.3 billion next year.

Amgen, founded in 1980, has seen a steady increase in sales and profits since Epogen was introduced into the market in 1989. This plan for restructuring is the first one of its kind that Amgen has experienced in its 27-year history as a biotechnology company. The company has grown to employ 20,000 employees worldwide, with 11 of its facilities located in some of the biggest cities in the U.S., including San Francisco, CA; Cambridge, MA; and Seattle, WA. The restructuring plans come in the wake of “payment limits by insurers and safety warnings from U.S. regulators.” FDA approved labels for Amgen’s drugs have undergone changes including the inclusion of a “black box” warning. These warnings coupled with numerous studies into the safety of the drugs have adversely affected Amgen’s anemia drug sales, which have, in turn, caused the company’s restructuring.

Click on the following links to read the full version of the articles which have contributed to this post:

Associated Press (in Forbes): “Amgen to Cut Up to 2,600 Jobs”

Bloomberg: “Amgen Will Cut 2,200 to 2,600 Jobs, Saving $1 Billion”

The New York Times: “Amgen to Cut Jobs, a First for the Biotech Giant”

The Benton Crier: “Amgen to cut up to 2,600 jobs”

Associated Content: “Biotech Firm Amgen Announces Layoffs”

Trust Will Help Users Of Procrit, Aranesp, & Epogen Determine And Resolve Claims

Civil Action attorney, Jan Schlichtmann, announced at the 3-18-07 Mass Torts Conference in Las Vegas the formation of a new Trust - The ESA Settlement Trust - a Trust for people who may have been injured by the use of the anemia drugs Procrit, Aranesp, and Epogen. 

For more information go to the Procrit/Anemia Drug Project link listed on the Navigation Bar to the left or click here. 

The ESA Settlement Trust can be found by clicking here. If you are an attorney and want to know more about how you can join with your colleagues in this innovative new project to help people who may have been harmed by this developing mass tort please click here.