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Chemotherapy Drug Concession

gdpawel's picture
gdpawel
Posts: 537
Joined: May 2001

Drug Concession Profits are Hugh for Cancer Doctors

Cancer doctors have the financial incentive to select certain forms of chemotherapy over others because they receive higher reimbursement.

Medical Oncologists are pocketing hundreds of millions of dollars each year by selling drugs to patients, a practice that almost no other doctors follow. These cancer specialists can make huge sums from the difference between what they pay for the drugs and what they charge insurers and government programs.

Typically, doctors give patients prescriptions for drugs that are then filled at pharmacies. But Medical Oncologists buy the chemotherapy drugs themselves, often at prices discounted by drug manufacturers trying to sell more of their products and then administer them intravenously to patients in their offices.

The practice creates a potential conflict of interest for these doctors, who must help cancer patients decide whether to undergo chemotherapy or continue if it is not proving to be effective and which drugs to use. The money these doctors make from selling medicine is contributing to the nation's high health care bills and adding to the waste and inefficiency in the health care system.

Over the course of the 1990's, Medical Oncologists have been able to rely on the sale of chemotherapy drugs as an important source of revenue. They are now among the best-paid doctors. In 2001, the median compensation for an oncologist in a large practice was $274,000, surpassing obstetricians and general surgeons, according to data from the Medical Group Management Association. All the evidence suggests that doctors do respond to money.

These cancer specialists have successfully resisted most government efforts to take this drug concession away. Medicare, which does not cover most prescription drugs, does pay doctors about $6.5 billion a year for drugs they personally administer, largely cancer drugs.

According to the General Accounting Office, doctors on average, were able to get discounts as high a 86% on some drugs. Medical Oncologists in private practice typically make two-thirds of their practice revenue from chemotherapy concession.

Joseph P. Newhouse, a health policy professor at Harvard, has been asked by the government to look into how the Medicare reimbursement system may affect how Medical Oncologists prescribe chemotherapy. The drug concession may lead some doctors to recommend chemotherapy when patients may not benefit. A 2001 NIH study found that a third of patients received chemotherapy in the last six months of their lives, even when their cancers were considered unresponsive to chemotherapy. Those findings strongly suggested overuse of chemotherapy at the end of life.

The government is also looking into how the drug concession is affecting prescribing patterns. Medical Oncologists began selling drugs directly more than a decade ago, after they persuaded insurers that it would be less expensive to administer the drugs in their offices than in hospitals. This was part of a trend of doctors' being paid much more to perform services and treatments in their offices than in hospitals.

Some oncologists acknowledge that the current system creates a perverse incentive. The potential for conflicts of interest is troubling. In several prominent cases, drug companies have been accused of using discounts to influence doctors. For example, Pharmacia is accused of having induced physicians to purchase its drugs, rather than competitors' drugs, by persuading them that the wider "spread" on the defendant's drugs would allow the physicians to receive more money and make more of a profit, at the expense of the Medicaid program and Medicare beneficiaries. Medical Oncologists would be motivated to give too much care or the wrong kind.

This kind of chemotherapy concession may not last. Health plans are all starting to take a much harder look. Some insurers are getting Medical Oncologists to forgo profits from chemotherapy drugs, by paying the doctors more for administering them. Other insurers plan to give Medical Oncologists a choice: either they can allow health plans to buy the drugs at a lower price and pay the doctors for administering chemotherapy or they can accept a lower payment for the drugs if they continue to buy them.

gdpawel's picture
gdpawel
Posts: 537
Joined: May 2001

Some irrate oncologists are angry and hope to turn patients into lobbyists, warning patients that they may face a return to hospitalization. And yes, some of them are threatening to refuse treating Medicare patients altogether. These kinds of threats are abhoring! Even Medicare officials have denounced some of these oncologists as alarmist and untrue.

Some of them are telling their patients that because of the new reimbursement system, patients might have to "switch to older medications". That may not be a bad idea! Presently used chemotherapy drugs have a high rate of failure, according to Januray 10, 2002 issue of the New England Journal of Medicine. Oncologists at a single institution may obtain a 40% - 50% response rate in a tightly controlled study, but when these same chemotherapy drugs are administered in a real world setting, the response rates decline to only 17% - 27%.

Real world setting after real world setting has been showing that presently used chemotherapy drugs have failed to show clinical advantage over standard (older, less toxic drugs) regimens. According to a multicentre Southwest Oncology Group study, there is no significant difference in survival, response rates or quality of life between standared (cheaper) regimen and dose-intense (more expensive) treatment arms.

The results of years of clinical trials on patient populations are considered enough indication on how an individual will respond. The percentage of patients that must respond to a drug before it is approved varies from as low as 20% to as high as 80%, depending on the type of cancer. Thereafter it is used routinely for all patients with the same form of cancer, though unfortunately a drug that helps one person does not necessarily mean that it will help all people with the same diagnosis.

One of the commonest methods to test a new drug is not against an already effective treatment but against a placebo. However, what matters most to patients is not whether a company's drug is better than nothing, but whether it is better than established treatments. European regulators already require drug makers to compare new drugs with older ones (comparative drug testing), while the FDA simply asks that drug makers compare new drugs with placebos. When you look at the results, there is almost never a difference between active treatments.

Oncologists long avoided cuts forced on other specialists because the government allowed them to bill Medicare for cancer drugs in amounts that often far exceeded their actual costs. The system was widely criticized and the General Accounting Office found that doctors were able to get discounts as high as 86% on some drugs.

Even the American Society of Clinical Oncologists say, "we did not like the old system, even the perception that it set up inappropriate incentives we did not support." Some studies suggest that American oncologists overuse cancer drugs, particularly in the last months of patients' lives after the patients have failed to respond to treatment. Advocates for cancer patients say that Medicare's reimbursement system encouraged overtreatment.

The January 1, 2001 issue of the Journal of Clinical Oncology revealed that in 1999 the average annual income of oncologists in private practice was $253,000. By comparison, oncologists in academic medicine earned "only" $142,000. Where does the bulk of a private oncologist's income come from? The Journal of the National Cancer Institute (JNCI) commented that "private-practice oncologists typically derive two-thirds of their income from selling chemotherapy" (JNCI 2001;93:491).

The new law was simply concerned about the undisputable fact that the "structure" of the old reimbursement system was indefensible. It rewarded oncologists for administering chemotherapy. It did not reward oncologists for spending a half hour explaingin to the patient why she/he is more likely to be harmed by chemotherapy than to be helped by it.

The new system still has major flaws, in that it continues to provide incentives to administer chemotherapy, in the same way that surgeons have a financial incentive to recommend surgery. Additionally, it is a certainty that there will be large differences between the profit margins of administering different drugs, providing continuing incentives to base drug selection on profit margin. However, the new system is clearly an improvement from the standpoint of cancer patients, taxpayers, and advocates of basing drug selection on individual tumor biology, rather than on a least common denominator approach which invites conflict-of-interest medical decision-making."

gdpawel's picture
gdpawel
Posts: 537
Joined: May 2001

Neil Love, M.D. reports in a survey of breast cancer oncologists based in academic medical centers and community based, private practice oncologists. The academic center-based oncologists do not derive personal profit from the administration of infusion chemotherapy, the community-based oncologists do derive personal profit from infusion chemotherapy, while deriving no profit from prescribing oral-dosed chemotherapy.

The results of the survey show that for first line chemotherapy of metastatic breast cancer, 84-88% of the academic center-based oncologists prescribed an oral dose drug (capecitabine), while only 13% perscribed infusion drugs, and none of them prescribed the expensive, highly remunerative drug docetaxel.

In contrast, among the community-based oncologists, only 18% prescribed the oral dose drug (capecitabine), while 75% prescribed infusion drugs, and 29% prescribed the expensive, highly remunerative drug docetaxel. The existence of this profit motive in drug selection has been one of the major factors working against the individualization of cancer chemotherapy based on testing the cancer biology.

This is not to imply that the academic center-based oncologists are without their fair share of collective guilt. They were misguided in not recognizing that they were trying to mate notoriously heterogeneous diseases into one-size-fits-all treatments. They devoted 100% of their clinical trials resources into trying to identify the best treatment for the average patient, in the face of evidence that this approach was non-productive. However, such unsuccessful experiments will never be viewed as such by the thousands of people whose careers are supported by these experiments.

Henderson, et al, entered 3,100 breast cancer patients in a prospective, randomized study to compare cyclophosphamide/doxorubicin alone versus cyclophosphamide/doxorubicin plus Taxol (in the adjuvant, pre-metastatic setting). The results were microscopically positive, at best, and cannot begin to justify the enormous financial and human resources expended (while making no effort at all to test and improve methods to individualize treatment).

But these results changed the face of the adjuvant chemotherapy of breast cancer. Cyclophosphamide+Doxorubicin+Taxol became standard of care. Taxol recently went off patent. Now the thrust is to identify on-patent therapy which is microscopically better in clinical trials of one-size-fits-all treatment. Already, the community-based oncologists are migrating to Cyclophosphamide+Doxorubicin+Docetaxel (expensive/remunerative) so what was the purpose of doing that 3,100 patient prospective, randomized Henderson study?

http://patternsofcare.com/2005/1/editor.htm

gdpawel's picture
gdpawel
Posts: 537
Joined: May 2001

How Medicare's Payment Cuts For Cancer Chemotherapy Drugs Changed Patterns Of Treatment

The Jacobson, Earle, Price and Newhouse study - How Medicare Payment Cuts For Cancer Chemotherapy Drugs Changed Patterns Of Treatment - published in Health Affairs adds to the survey done by Dr. Neil Love, entitled "Patterns of Care."

In the Jacobson, Earle, Price and Newhouse study, physicians switched from dispensing the drugs that experienced the largest cuts in profitability, carboplatin and paclitaxel, to other high-margin drugs, like docetaxel.

One of the results of Dr. Love's survey shows that for first line chemotherapy of metastatic breast cancer, 84-88% of the academic center-based oncologists (who do not derive personal profit from infusion chemotherapy) prescribed an oral dose drug (capecitabine), while only 13% prescribed infusion drugs, and none of them prescribed the expensive, highly remunerative drug docetaxel.

In contrast, among the community-based oncologists (who do derive personal profit from infusion chemotherapy), only 18% prescribed the oral dose drug (capecitabine), while 75% prescribed infusion drugs, and 29% prescribed the expensive, highly remunerative drug docetaxel. (Patterns of Care: 2005,Vol 2,Issue 1).

While Newhouse and Earle's previous Michigan/Harvard study - Does reimbursement influence chemotherapy treatment for cancer patients? - showed results before the new Medicare reform, Love's "Patterns of Care" study showed results that the Medicare reforms were still not working. This new study adds another "smoking gun" about the chemotherapy concession issue.

I believe that all these studies showed results that the Medicare reforms are still not working. It is still an impossible conflict of interest. And the existence of this profit motive in drug selection has been one of the major factors working against the individualization of cancer chemotherapy based on testing the cancer biology. It is way over time to take medical oncologists out of the retail pharmacy business and make them be doctors again.

http://ojhe.org/index.php/ojhe/article/viewArticle/50

http://content.healthaffairs.org/cgi/content/full/hlthaff.2009.0563v1

stayingcalm's picture
stayingcalm
Posts: 656
Joined: Feb 2007

My oncologist has been treating me for months without pay because he knows I can't afford it. When he calls in my Tarceva he uses a coupon whenever he can, so it costs me nothing. My pulmonologist also uses coupons - my last Advair cost me nothing. I'm sure some doctors are just out to make a buck, I know mine certainly aren't!

congoody
Posts: 74
Joined: Jan 2010

My docs do their best to get me samples help me out whenever possible - who is this person reffering to? -no one in my experience...connie.

cobra1122's picture
cobra1122
Posts: 244
Joined: Jul 2009

While I realize that there are people everywhere out to make a quick and large buck,I am thankful for the Doctors that have treated me. if it werent for their knowledge and dedication to keeping me alive, well I wouldnt be here. They did everything they could think of and used every way they could to get me what I needed even when I could not pay for it. I have been given the chance to live and yes, we went bankrupt, losed our house, and have bill collectors calling all thhe time. It wasnt the Doctors fault, it was a result of my illinesses and not being rich..
There are many factors that go into someones treatment, and the type of treatment, and while there are those who profit from others illnesses, there are many more who dedicate and donate to help others get well and get the treatments they need.
I wish I could blame someone else forj my health, my finanical status, and my being on Hospice. Point to someone and show that they are profitting from me being sick and not getting better. There are, but some profit because of the time and dedication they have put into helping people such as myself. Drug Companies could do more to make drugs more affordable, Hospitals could reduce their cost for many things in treating people , Doctors could reduce their charges for patient care. But then what would the quality be like, where would the cutting of cost end, at the drug store where you get the script, or maybe at the Mcdonalds where the Pharmacist eats.

Yes, there are reforms needed in healthcare cost, and there are people who need to be held accoutable for the cost they charge and more money put out for research. But I think that these things are being address, and that the Majority of Medical providers are working toward the best interest of their patients. Some have hiigh opiinions of themselves and are arogant, but they still provide the service that we need. As a whole it is everyone in the US that allowed things to get this way, and to blame one group especially for being so callus is wrong.
The Large Majority of doctors are doing the right thing, some we dont agreed with, some we dont like thier attitude, but to lump doctors basicly into one lump group is wrong.
my sickness brought me to where I am, My Doctors have helped me out live every prognosis given. If they make a profit from me, they have earned it. I am on Hospice now and guess what they dont make a profit of me, they have went well beyond what they need to and have been more than helpful to my family as well as myself.
so please, dont throw the people who have done so much for me into the same mix as a few (i realize it maybe hundreds) bad seeds. There are thousands of honest, dedicated, and compassionate Doctors and healthcare providers out there who are just trying to help and make a living.

Dan (cobra1122)

gdpawel's picture
gdpawel
Posts: 537
Joined: May 2001

I would imagine that some are influenced by the whole state of affairs, possibly without even entirely admitting it. Social science research shows that people can be biased by self-interest without being aware of it. There are so many ways for humans to rationalize their behavior

gdpawel's picture
gdpawel
Posts: 537
Joined: May 2001

If anyone took any of these chemotherapy drugs between January 1, 1991 to December 31, 2004, you may receive reimbursement if you made a percentage co-payment or full payment for the following drugs:

Blenoxane
Cytoxan
Etopophos
Paraplatin
Rubex
Taxol
Vepesid

Over the course of the 1990's, oncologists have been able to rely on the "sale" of chemotherapy drugs as an important source of revenue. Some oncologists acknowledge that the system created a perverse incentive. According to Dr. Edward L. Braud, from the Association of Community Cancer Centers, whose members treat more than half of the nation's cancer patients, the potential for conflicts of interest was troubling.

Several prominent cases, drug companies have been accused of using discounts to influence doctors. In a Minnesota lawsuit, Pharmacia was accused of having induced physicians to purchase its drugs, rather than competitiors' drugs, by persuading them that the wider "spread" on the defendant's drugs would allow the physicians to receive more money and make more of a profit, at the expense of the Medicaid program and Medicare beneficiaries.

Federal laws bar drug companies from paying doctors to prescribe medicines that are given in pill form and purchased by patients from pharmacies. But companies can rebate part of the price that doctors pay for drugs, which they dispense in their offices as part of treatment. Doctors receive the rebates after they buy the drugs from the companies. But they also receive reimbursement from Medicare or private insurers for the drugs, often at a markup over the doctors' purchase price.

Such inflated payments not only placed additional strain on the finances of the Medicare program, but also directly affected beneficiaries by inflating their required 20% copay. In addition, analysts have suggested that the varying spreads for different types of physician-administered medications create a conflict of interest which could affect the treatment decisions of some health care providers.

http://www.bmsawpsettlement.com/

congoody
Posts: 74
Joined: Jan 2010

Do you have cancer?
This is a website for supportive sharing.
Your problem,which you rant about ad nauseam, is shared with us to accomplish what exactly?
Clearly you are angry with physicians and pharmaceutical companies and I think after all your posts your position is clear.
When is enough enough for you?
You have written. You have had your say. You can stop now.

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