From the THCB’s Sacramento bureau, Matt Quinn has been following the changes in reimbursement for oncologists. He notes that although last week Genentech’s income rose 17%, not all is well at the onco-pharma shop. Matt writes:

Change monetary incentives and utilization changes… how unexpected (!). Rituxan and Herceptin represent a big piece of Genentech’s revenue. Avastin (and other drugs that choke off blood vessels from tumors) haven’t proven to be the "silver bullet" that they were once thought to be. Genentech’s future is heavily reliant on them as well…as the WSJ notes:

"At the same time, however, sales of another Genentech cancer drug (Rituxan) appeared to fall short, a situation company executives attributed in part to "initial caution" by physicians following a change in Medicare reimbursement practices for cancer drugs."

"Officials of Genentech, South San Francisco, Calif., acknowledged some weakness in Rituxan sales. Ms. Potter blamed lower inventory levels at drug distributors, while also noting changes in Medicare-reimbursement practices. Under the new rules, doctors aren’t any longer able to profit by prescribing cancer drugs."