And why not? After all, docs are entitled to determine how to get paid by Medicare. And why shouldn't drugmakers show them the way? So they did.
Industry documents that have emerged in a federal civil lawsuit in Boston show that big drugmakers sometimes calculated to the penny the profits that doctors could make from their drugs, The New York Times reports. And sales reps shared those profit estimates with doctors and their staffs, the documents show.
In one PowerPoint presentation from 2000, a Bristol-Myers Squibb executive told employees that oncologists’ biggest concern was “Reimbursement Today, Reimbursement Tomorrow, Reimbursement!†The documents were filed in a lawsuit in federal court in Boston by patients and insurers who claim they were overcharged for cancer meds.
As the price of cancer drugs skyrocketed during the 1990s, docs suddenly found huge income streams. A Bristol-Myers document from 2001 shows that oncologists made about 65 percent of their revenue, and a similar percentage of their net income, on drug profits. Could the promise of large profits have influenced prescribing habits? Many docs always insist it's not possible.
But Bob Geller, an oncologist who now works for the biotech, tells the paper that "it’s clear that physicians stopped making decisions based on what made scientific or clinical sense in lieu of what made better business sense.â€
4 Comments
Ed,
Unfortunately, this doesn't speak well of physicians or pharma companies. Although, from a pure business perspective and in most industries, helping one's customer increase their own revenue is considered a best practice. Interestingly, some pharma companies have long forbidden employees from directly assisting customers in increasingly their own revenues. There are concerns that this practice could violate anti-kickback laws. I think most, but not all, companies have moved away from this because of the risk.
Lew
To Ed Silverman, For the past two months or three months I have been reading your articles. I was extremely interested in finally there is someone that will make a difference and perhaps change the method of the connections between the pharaceuticals and the medical profession. I recently came home to NJ from my Florida home and upon reading the Star Ledger Business Section I am disappoonted in Pharmalot. Are you for truth and honesty in health care or are you just a representive for yjr the drug companies? What have you accomplished and what is your goal? Why don't you have a telephoone fax or numberto call you on Pharmalot? . Lillian Katz New Jersey needs better access to quality healthcare. Our laws are not for the patients, they are protecting the health care industries, drug companies and he medical profession. What are our elected officals doing? Please contact me at 609 395 6792 0r write me at 123n Rossmoor Dr. Monroe Township, NJ 08831 Lillian Katz
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« Pharmalot…Pharmalittle…China’s Former FDA Chief: ‘Don’t Kill Me’ »‘Reimbursement Today! Reimbursement Tomorrow!’ June 12th, 2007 7:18 am By Ed Silverman And why not? After all, docs are entitled to determine how to get paid by Medicare. And why shouldn’t drugmakers show them the way? So they did.
Industry documents that have emerged in a federal civil lawsuit in Boston show that big drugmakers sometimes calculated to the penny the profits that doctors could make from their drugs, The New York Times reports. And sales reps shared those profit estimates with doctors and their staffs, the documents show.
In one PowerPoint presentation from 2000, a Bristol-Myers Squibb executive told employees that oncologists’ biggest concern was “Reimbursement Today, Reimbursement Tomorrow, Reimbursement!†The documents were filed in a lawsuit in federal court in Boston by patients and insurers who claim they were overcharged for cancer meds.
As the price of cancer drugs skyrocketed during the 1990s, docs suddenly found huge income streams. A Bristol-Myers document from 2001 shows that oncologists made about 65 percent of their revenue, and a similar percentage of their net income, on drug profits. Could the promise of large profits have influenced prescribing habits? Many docs always insist it’s not possible.
But Bob Geller, an oncologist who now works for the biotech, tells the paper that “it’s clear that physicians stopped making decisions based on what made scientific or clinical sense in lieu of what made better business sense.â€
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June 12th, 2007 at 8:31 am Lew Ed,
Unfortunately, this doesn’t speak well of physicians or pharma companies. Although, from a pure business perspective and in most industries, helping one’s customer increase their own revenue is considered a best practice. Interestingly, some pharma companies have long forbidden employees from directly assisting customers in increasingly their own revenues. There are concerns that this practice could violate anti-kickback laws. I think most, but not all, companies have moved away from this because of the risk.
Lew
June 12th, 2007 at 8:27 pm Lillian Katz To Ed Silverman, For the past two months or three months I have been reading your articles. I was extremely interested in finally there is someone that will make a difference and perhaps change the method of the connections between the pharaceuticals and the medical profession. I recently came home to NJ from my Florida home and upon reading the Star Ledger Business Section I am disappoonted in Pharmalot. Are you for truth and honesty in health care or are you just a representive for yjr the drug companies? What have you accomplished and what is your goal? Why don’t you have a telephoone fax or numberto call you on Pharmalot? . Lillian Katz New Jersey needs better access to quality healthcare. Our laws are not for the patients, they are protecting the health care industries, drug companies and he medical profession. What are our elected officals doing? Please contact me at 609 395 6792 0r write me at 123n Rossmoor Dr. Monroe Township, NJ 08831 Lillian Katz
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Emerging data is showing that there is a continuing problem. A system which rewards medical oncologists for being pharmacists. Choosing drugs for cancer patients based on profits to the medical oncologist. These articles indicate that this is precisely how chemotherapy drugs are being selected in the real world of cancer medicine This was first brought to attention at a Medicare Advisory Panel meeting in 1999 in Baltimore. There was a gastroenterologist in attendance who complained that Medicare had cut his reimbursement for colonoscopies from $400 to $108 and how all the doctors in his large, multi-specialty internal medicine group were hurting, save for two medical oncologists, whom he said were making a killing running their in-office retail pharmacies.
Typically, doctors give patients prescriptions for drugs that are then filled at pharmacies. But medical oncologists bought chemotherapy drugs themselves, often at prices discounted by drug manufacturers trying to sell more of their products and then administered them intravenously to patients in their offices.
Not only do the medical oncologists have complete logistical, administrative, marketing and financial control of the process, they also control the knowledge of the process. The result is that the medical oncologist selects the product, selects the vendor, decides the markup, conceals details of the transaction to the degree they wish, and delivers the product on their own terms including time, place and modality.
A joint Michigan/Harvard study authored by Drs. Joseph Newhouse and Craig C. Earle, entitled, "Does reimbursement influence chemotherapy treatment for cancer patients," confirmed that before the new Medicare reform, medical oncologists chose cancer chemotherapy based on how much money the chemotherapy earned the medical oncologist. A survey by Dr. Neil Love, "Patterns of Care," showed results that the Medicare reforms still were not working. It was still an impossible conflict of interest.
The government wasn't reducing payment for cancer care under the new Medicare bill. They were simply reducing overpayment for chemotherapy drugs, and paying cancer specialists the same as other physicians. The government can't afford to overpay for drugs, in an era where all these new drugs are being introduced, which are fantastically expensive.
Although the new Medicare bill tried to curtail the Chemotherapy Concession, private insurers still go along with it. What needs to be done is to remove the profit incentive from the choice of drug treatments. Medical oncologists should be taken out of the retail pharmacy business and let them be doctors again.