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Health Affairs BlogPHARMA: Chairman’s Parting Salvo On ESRD – Health Affairs Blog

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PHARMA: Chairman’s Parting Salvo On ESRD

Wed, 06 Dec 2006 23:11:39 +0000

Rep. Bill Thomas (R-CA) has roared like a lion through much of his tenure as chairman of the House Ways and Means Committee. But he went out like a lamb this week in what was likely to be his last hearing as chair, notwithstanding that the subject was the vexatious problem of Medicare payment for end stage renal disease. Thomas has been on the warpath about ESRD payment in recent months, as a series of studies have detailed overuse and overpayment for Epogen, used to treat anemia in renal patients. The 35-year old ESRD program, a pioneering experiment in prospective payment for Medicare, has been a perennial source of policy challenges and has been increasingly under MedPAC’s microscope. The current imbroglio adds complexity to the problems facing Congress by raising questions about what happens inside the black box of biopharmaceutical pricing.

Medicare spends more on Epo – about $2 billion a year – than any other drug. News reports and studies in this journal, the New England Journal of Medicine, and by the GAO have described skewed payment incentives, increases in use, and dangers associated with overuse. CMS has badly missed legislated deadlines in reporting on the Epo problem and launching demonstrations to test improved ESRD payment. Last April, Thomas took former administrator Mark McClellan to task for these lapses, demanding answers and action.

But he was gentle as a baby doctor in renewing his suit today with McClellan’s successor Leslie Norwalk. In fact, his farewell hearing was suffused with valedictory sweetness and light, as senior committee Democrats Charles Rangel and Pete Stark – who are in accord with the departing chairman on ESRD payment reform – wished their blessings on him. As a crowning touch, the California Republican’s 65th birthday happened to fall on the day of the hearing – Dec. 6 – which earned him not only further well wishes from his colleagues but a welcome from Norwalk as a new beneficiary of the program he has done so much to re-shape during his career.