Cancer drug profits - Shorts - Brief Article

Townsend Letter for Doctors and Patients,  June, 2003  by Jule Klotter

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Over a decade ago, US insurers began permitting oncologists to sell and administer chemotherapy drugs from their offices. While this policy has cut hospital costs, it has seen a huge rise in the amount that patients and insurers pay for the drugs themselves. An article in The New York Times (25 January 2003) says that oncologists in private practice gain most of their income by buying drugs at huge discounts (as much as 86% on some drugs) and charging patients and insurers the market price. A single dose of leucovorin, for example, may cost a doctor less than $3 to buy, but he gets reimbursed $17.50 for it. Oncologists justify this "chemotherapy concession" as a way to pay for the office facilities and staff needed to administer the drugs.

Insurers are also concerned about a conflict-of-interest that arises when doctors profit directly from the drugs they prescribe. A 2001 study led by Dr. Ezekiel J. Emanuel of the National Institutes of Health indicated overuse of chemotherapy drugs during the last months of life. Oncologists say they are merely responding to patients' wishes.

Some private insurers, as well as the federal government, are looking for ways to reduce drug profits. In some cases, insurers agree to pay oncologists more for administering the drugs if the doctors agree to stop profiting from the drugs themselves. Other insurers are looking into buying chemotherapy drugs at discount prices from manufacturers, who will then ship the drugs to doctors' offices.

Abelson, Reed. Drug Sales Bring Huge Profits, and Scrutiny, to Cancer Doctors. The New York Times. 25 January 2003.

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