The Big Picture: The Economics of ESA Safety

The introduction of the first erythropoiesis-stimulating agent (ESA) nearly 20 years ago changed the way anemia is treated and managed.

he introduction of the first erythropoiesis-stimulating agent (ESA) nearly 20 years ago changed the way anemia is treated and managed. As the number of patients prescribed this class of drug has increased over the years, ESAs have become something of a thorn in pharmacy directors’ sides from a budget perspective (especially when it comes time to explain budget variances to hospital finance departments). The introduction and subsequent increase in use of ESAs were accompanied by decreased use of packed red blood cells (PRBCs), the established treatment, leading to a major cost shift for pharmacy departments. The transition to ESAs has taught pharmacists and managers to look beyond individual departmental budgets and consider the overall impact a particular treatment has on both the finances and clinical outcomes associated with that treatment. Pharmacy departments need to be willing to work with other departments in order to understand the costs and effects of shifting product utilization.

Fast Action on Safety Concerns

Earlier this year, questions were raised about the safety of ESAs. The FDA, in collaboration with the ESA manufacturers,

updated the safety information for these products, and the drugs received aBlack Box warning. In ESA treatment, the goal is

to try identifying the lowest dose of an ESA that will gradually increase the patient’s hemoglobin concentration to the

lowest level sufficient to avoid the need for a red blood cell transfusion. Clinical studies identified an increased risk of

death and serious cardiovascular events when these drugs were being administered to target hemoglobin of greater

than 12 g/dL. TheCenters for Medicare and Medicaid Services(CMS) and theFDAhave continued to review clinical information regarding ESA safety and effective target hemoglobin levels, some of which was submitted by the ESA manufacturers and organizations such as theAmerican Society of Clinical Oncology. CMS published its final National

Coverage for the Use of Erythropoiesis Stimulating Agents in Cancer and Related Neoplastic Conditions, also called the National Coverage Determination (NCD), with an effective date of July 30, 2007. Pharmacists should familiarize themselves with this NCD.

The final NCD in Cancer and Related Neoplastic Conditions provides coverage with restrictions for the treatment of anemia secondary to myelosuppressive anticancer chemotherapy in certain cancer conditions, such as solid tumors, multiple myeloma, lymphoma, and lymphocytic leukemia. Restrictions include limiting the initiation of ESA therapy to cases when the patient’s hemoglobin level is less than 10 g/dL; limiting the ESA treatment duration to a maximum of eight weeks after a chemotherapy session ends (if the patient’s hemoglobin response is less than 1 g/dl or hematocrit rises less than 3% compared to pretreatment baseline); limiting the starting dose to the FDA-recommended starting dose; and limiting dose escalation levels. Additional information can be found on the CMS website.

Intra-Departmental Costs and Responsibilities

It is necessary for hospital billing/finance departments, pharmacy departments, nursing staff, and even physicians to become familiar with the new guidelines regarding target hemoglobin levels to treat by the various coverage indications, established by each payer with which hospitals negotiate contracts. There is no national standard being followed by all payers, private or government. Because of this uncertainty, many hospitals are wrestling with challenging decisions regarding applying different treatment regimens to different patients, determined by the payers with which they have contracts.

It has been recognized for some time that ESAs eliminate the need to infuse PRBCs in patients who have anemia (oncology- or renal-associated or hospital-induced). The ESAs have also played an important role in bloodless surgery programs, which many hospitals market to attract new patients, and in treating patients such as Jehovah’s Witnesses, who cannot receive treatment with blood-derived products. Against this background of the usefulness and versatility of ESAs, one issue that has not received as much attention as perhaps warranted is that the increased use of ESAs has resulted in a shift in costs from the lab/blood bank over the years to the pharmacy department. In light of this change, pharmacy directors need to work closely with their facility’s blood bank to accurately measure change in financial and clinical impact. At the hospital where I was Administrator of Pharmacy Services and Chairman of the Pharmacy & Therapeutics committee (P&T), the Blood and Transfusion Subcommittee reported directly to P&T. The two groups developed a collegial relationship that enabled them to collaborate to resolve issues related to ESAs and other treatments (eg, factor products, albumin, IVIG, treatment of elevated INRs, development of a blood/transfusion order form, etc), including the financial impact shifts in treatment preferences had on both groups. Ensuring optimal clinical outcomes in patients was paramount in determining treatment choices, and metrics were measured to chart progress in meeting this goal. The American Association of Blood Banks (AABB; has looked favorably on reporting structures such as this. During an era in which there continue to be blood shortages and stricter screening parameters for donors—a study published recently in Transfusion indicates that only about one-third of the US population is eligible to donate blood—ESAuse will likely continue to increase and demonstrate value in treating various types of anemia.

Other Considerations

Several factors have contributed to increased use of ESAs over PRBC transfusion for anemia. Patients have no transfusion reactions to ESAs, like they can sometimes have to recurrent transfusions with blood products. Some patients experience febrile and/or allergic reactions when blood products are administered, which can require additional pharmacotherapy intervention withacetaminophen and/or diphenhydramine. In fact, blood banks track transfusion reactions and events as a metric for the AABB andThe Joint Commission. The Joint Commission website lists additional information on transfusion events and reactions. Transfusion with PRBCs also carries a risk of a patient receiving the wrong blood type, which, in some cases, can be life threatening.

The Bottom Line

Pharmacy departments and blood banks must make rigorous financial-analysis and return-on-investment (ROI) calculations comparing ESA use to PRBC as part of the revenue cycle enhancement process. This analysis should compare the cost of each treatment (ESAs vs. PRBC), cost of supplies (syringe and needle vs. infusion set and needle), labor for each treatment, patient throughput consideration, and reimbursement by each type of payer for each treatment. Patient throughput is an important, but often overlooked, issue. It can take up to four hours to transfuse a unit of PRBC. By substituting ESAs, not only can treatment chair time be freed up in a busy infusion center for another patient, but overall patient satisfaction and quality of life can also be improved, an important metric being looked at in some pay-for-performance models by various payers.

Pharmacy departments can take a lead role in the revenue cycle enhancement process by familiarizing themselves with each payer’s reimbursement parameters based on the indication for use of ESAs and PRBC, and screening hemoglobin or hematocrit prior to treating a patient. Remaining aware of payer guidelines and treatment reimbursement policies can go a long way toward assuring payment and avoiding a denial from a payer. As has been mentioned previously, CMS has established different parameters than many private payers regarding the use of ESAs. That is why it is important to know hospital’s payers, their established indications for ESA use, and parameters for use and reimbursement. It is possible that the hemoglobin treatment parameters established by CMS may lead to an increase in PRBC utilization and an increased demand on blood banks. If a patient does not achieve an appropriate clinical response, even when hemoglobin of 10 g/dL is achieved, the patient can still be treated with PRBCs.

Pharmacy is not an expense center in the outpatient setting. One can determine the profit margin for each dose of a drug or blood product by remaining aware of and following payers’ reimbursement guidelines. It may be necessary to set up a separate charge description master (CDM), with the corresponding billing descriptions established by CMS, and revenue codes in the outpatient setting in order to track payments and denials, as part of an overall revenue cycle enhancement program. The pharmacy department must constantly measure the performance of payer contracts and consult with payer representatives when issues with payment arise.

The use of ESAs can be measured using the balanced scorecard model, addressing both the clinical and financial impact on patient care. ESAs contribute to the improvement of quality of care in treating anemia and the financial performance of the hospital. The pharmacy department, blood bank, and hospital budget and finance departments should work together to analyze and better understand the clinical and financial characteristics of various treatments for anemia, the cost-shifting effects of altering treatment usage patterns (ie, increasing ESA use and decreasing PRBC use), and the impact each treatment option may have on patient throughput. Pharmacists should also become more familiar with the policies of their hospital’s payers, particularly the treatment guidelines and other factors that in large part determine whether the facility will be reimbursed for a particular treatment. Healthcare providers must continue to monitor the clinical and reimbursement issues surrounding ESAs. Pharmacy can take a lead role in this process by engaging other departments in the discussion.

Fred J. Pane, RPh, is Sr. Director of Pharmacy Affairs and New Business Development for Premier Inc, a hospital performance improvement alliance with 1,700 participating not-for-profit hospitals and health systems serving communities nationwide.