Amgen boosts prices to offset Aranesp sales

Amgen is hiking prices to make up for the shrinking sales volume of its anemia drug Aranesp. Bloomberg reports that Amgen raised the price tag on Aranesp itself by 4.4 percent, but also marked up the white-blood-cell-boosting meds Neulasta and Neupogen by 2.9 percent.

The price hikes aren't earth-shatteringly high, but they underscore Amgen's need to offset Aranesp's rapid decline. Sales of the drug dropped by 15 percent in 2009, and they're expected to suffer further as Medicare institutes new payment rules for dialysis services. 

In the past, dialysis centers could bill separately for treatment with Aranesp (or other drugs) and for the dialysis service itself, but now, Medicare will make "bundled" payments. So, dialysis providers will be paid the same amount irrespective of whether they use Aranesp. Market observers expect providers to skip at least some Aranesp treatments to keep margins high.

"We think Amgen's pricing power will help offset any decline in the proportion of Aranesp sales derived from the U.S. dialysis market where Medicare bundling rules are being adopted," Cowen & Co. analyst Eric Schmidt said in a note to investors, according to Bloomberg.

- read the Bloomberg story