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Jun 25, 2007
 |  BioCentury  |  Regulation

Shortness of breath

Sepracor Inc. may be about to lose more than a quarter of the market for its Xopenex levalbuterol as the result of a technicality in the Medicare law - and the Centers for Medicare & Medicare Services is reportedly hunting for other products that fall into the same crack.

Last week, SEPR said CMS confirmed its plan to pay for the asthma drug at the same rate as generic albuterol. The new policy, which goes into effect July 1, eliminates the reimbursement code for Xopenex under Medicare Part B and forces the product into a new code that lumps Xopenex together with generic albuterol products. Xopenex, which was approved in 1999, consists of the therapeutically active isomer of albuterol delivered via an inhaler.

SEPR (Marlborough, Mass.) declined to discuss the decision but said in a statement it does not know how the new policy will affect use of Xopenex or revenues from the drug. Xopenex sales were $555 million in 2006, nearly half of total revenues of $1.2 billion last year.

In SEC filings, the company has estimated 25-30% of Xopenex inhalation solution units sold are subject to reimbursement under Part B.

The new reimbursement rate for Xopenex and generic albuterol is $0.525 per unit (0.5 mg for Xopenex, 1 mg for albuterol). The new rate translates into $1.31 per 1.25 mg dose of Xopenex, which SEPR said is the dose most commonly used by Part B beneficiaries.

For the second quarter, the rate was $1.535 per unit for Xopenex and...

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