Buy-out fund Welsh, Carson has bought the biggest for-profit physician group US Oncology. This suggests to me that the market is unlikely to be rewarding oncologists while the whole issue around reduced fees for oncology drugs gets sorted out. THCB oncology correspondent Matt Quinn agrees:
US Oncology treats about 15% of newly diagnosed cancer patients. USON has persued a strategy of revenue growth by dominating cancer care in medium markets and by negotiating low drug prices (in relation to both other oncologists and AWP) with pharma. They also are large enough to provide critical mass for pharma drug trials… With the pharma side of the equation drying up, it appears that they think the market will react unfavorably. And perhaps they want to hide the "sausage-making" that must go on as they transition business models. I’d be interested to know the docs are reacting to this and whether and how quickly they can "cash out".
BTW if you want to know more from the guts of oncology pricing, here’s this gem from the Pete Stark archives in 2001. It was this kind of drug "pricing" strategy that eventually got CMS’ attention in the past year.