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PHARMA: Chairman’s Parting Salvo On ESRD

December 6th, 2006

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.

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3 Responses to “PHARMA: Chairman’s Parting Salvo On ESRD”

  1. mgoozner Says:

    Fair enough. I don’t attend enough Ways and Means Committee meetings. That may change in the new year.

  2. Rob Cunningham Says:

    Absolutely a fair comment. John Reichard also characterized Thomas’s farewell performance as vituperative in CQ HealthBeat. John and I covered Thomas together for years at Medicine & Health, when he was chair of the W & M health subcommittee, and his outbursts have been a regular source of interest for years in the health press. At the hearing in question, though, I found it difficult to take his attitude too seriously. Is Mr. Thomas outraged that CMS has been led astray by Amgen, as Dennis Cotter has written? But is he not one of the architects of a Medicare drug benefit that gave the pharmaceutical industry what it wanted in the pricing department? And if CMS can’t meet its deadlines on ESRD reform, might it not have something to do with the enormous burden that implementation of the selfsame Part D, in all its labyrinthine complexity, has placed on the agency? Is the chairman really outraged?
    Perhaps. But in any case, I thought he went out of his way to be nice to Leslie Norwalk, whatever his reasons; and that Norwalk, Stark, and Rangel made a point of being nice to him. For once, it didn’t seem like Thomas’s famous truculence was the story, and that was a welcome change of pace. It was an ironic little twist at the end of a long, grim saga, and worth a little tongue-in-cheek chuckle.

  3. mgoozner Says:

    Did you attend the same hearing I did? Bill Thomas vowed to use his time in “retirement” pro bono to lobby his former colleagues in Congress to change Medicare reimbursement policy for EPO if Norwalk and CMS didn’t. He was visibly shaking with anger as he read her the riot act on the agency’s failure to act. If you want to read my take on that hearing, go to

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