WASHINGTON (CN) – The Federal Trade Commission on Monday filed a consent order challenging Fresenius Medical Care’s proposed exclusive license to supply the intravenous iron drug Venofer to U.S. dialysis clinics, saying the move would allow the company to boost the cost of its Medicare payments.
Fresenius, the largest provider of end-state renal dialysis services in the United States, wants to buy an exclusive sublicense from Luitpold Pharmaceuticals, a wholly owned subsidiary of Daiichi Sankyo Co. of Japan. But the FTC says that were that to happen, “the competitive market will no longer determine the price that Fresenius’ clinics will pay for intravenous iron. That amount will instead become an internal transfer price reported by Fresenius to the Center for Medicare & Medicaid Services.”
Medicare pays “hundreds of millions of dollars” each year for intravenous iron products used in kidney dialysis, the FTC said in announcing its consent order. The order “will prevent Fresenius from reporting intra-company transfer prices higher than certain levels specified in the order. Those levels are derived from current market prices,” the FTC said.