PHARMA/PHYSICIANS: ESRD centers having the curtain pulled back

The NY Times shows that apparently doctors owning ESRD centers and others running chemo-infusions centers reap millions for Anemia drugs .
Who knew? OK, anyone reading THCB for the past few years knows all about this, but now that it’s hitting the NY Times (which got a former clinic director to open his version of the books showing that docs in a 6 person group made about $450K a year each on their sale of the drugs) and now that hearings have already been held, and the FDA’s issued a warning, perhaps something may change…

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  1. I couldn’t agree more. A patient wants a physician’s decision to be based on experience, clinical information, new basic science insights, etc., not on how much money the doctor gets to keep. If you are a patient, you should know if there are any financial incentives at work in determining what cancer drugs you are being prescribed.
    Ask your oncologist: Why are you prescribing these drugs? What is their published efficacy and toxicity in other patients with the same cancer? Do you have any research or financial interests in prescribing these drugs? Are these drugs a profit center for you in respect to reimbursement? A trusting partnership between doctor and patient that facilitates informed consent is the goal for many proactive patients. Such a partnership, however, may require an understanding of all the factors that lead to a treatment recommendation.
    In light of the precious little in the way of guidance from clinical trials with respect to best empiric therapy (where the only thing that has been proven to correlate with treatment decisions is reimbursement to the prescribing oncologist), and the importance of basing cancer treatment at least in part on patient preferences, it is entirely reasonable to support judicious application of laboratory tests which have been well characterized with respect to test accuracy.

  2. As patients, you don’t need to be distrustful (but you might get the feeling from the posts of the chemotherapy -for-profit bloggers that that is what you are inevitably up against) but it’s wise to be savvy and take some practical steps.
    The most practical:
    -Seek second opinions.
    -Choose a health plan with as much flexibility about second opinions as you can.
    -Ask your physician to share with you the study results that informed his or her recommendation to prescribe a particular drug or chemotherapy regimen.
    You need not fear that your doctor sees $$$ when he examines you. If you feel he or she doesn’t have your best interest in mind, then go elsewhere. It’s simple.
    And, understand, there are people out here who love to scare cancer patients, for whatever reason.
    Like cancer isn’t scary enough.

  3. U.S. Oncology took a hit on first-quarter reports showing a net loss. U.S. Oncology said a number of factors impacted the results, including reduced pre-tax income due to lower use of certain supportive care drugs used to treat cancer-induced anemia (their hands were caught in the cookie jar), and the discontinuation of the Medicare Demonstration Project.
    One key point was outlined in the NYT story: 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, like the anemia medicines, which they dispense in their offices as part of treatment. The anemia drugs are injected or given intravenously in physicians’ offices or dialysis centers. 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.
    The shift, almost 20 years ago, from the institution-based, inpatient setting to community-based, ambulatory sites for treating the majority of the nation’s cancer patients has prompted in large part additional costs to the government and Medicare beneficiaries. The Chemotherapy Drug Concession gave oncologists the financial incentive to select certain forms of chemotherapy over others because they receive higher reimbursement.
    The medical oncologists’ (chemotherapists’) retail pharmacy business continues, unabated.

  4. Dr. Paul Scheel, director of nephrology at Johns Hopkins University Medical Center, said he doesn’t believe that doctors are turning over prescribing decisions to dialysis centers or are unaware of dosing. As someone who’s worked with two dialysis chains, he said he has never been encouraged to use Epogen inappropriately.
    Dr. Charles McAllister, chief medical officer for DaVita, said the company’s dosing guidelines “are based on clinical science and really are done in an open collaborative atmosphere with physicians. The decision to use a guideline is purely that of the physician alone.”
    Michael Lazarus , medical director of Fresenius North America, said the number of patients whose anemia is adequately treated has increased dramatically in the p ast 10 years.
    To reach that level of anemia treatment for the entire dialysis population — more than 325,000 — it is inevitable that some patients will have their red blood counts boosted above FDA recommendations, he said.
    And, as far as the overuse in cancer patients? HGBs >12?
    Not the real problem at all.

  5. Thanks for the additional info, GDP. I was amazed by this story. In addition to the finding that the drug is apparently useless according to the FDA report, another issue is that due to the volume discounts doctors get, patients likely get charged differently for this drug depending on whether their doctor does a lot of therapy for patients with this condition or not. I posted some more analysis of this over at US health care system massively fouled up–example.

  6. U.S. Oncology reports two seeming unrelated bits in their latest SEC Form 10-K.
    One note says cancer patients are suddenly using a lot less anemia drugs, and as a result U.S. Oncology will bank $8-10 million a year less than expected.
    In panel discussion that highlighted the 12th annual conference of the National Comprehensive Cancer Network, Lee Newcomer, former chief medical officer and currently an executive with Minneapolis-based United Health Group, pointed out that in reviewing records of patients who were prescribed the drug erythropoietin, said that 44% of those patients had blood work-ups that would indicate they were not anemic.
    The second note says that in 2005 the company was subpoenaed by the U.S. Department of Justice about contracts and relationships with pharmaceutical companies.
    The Senate Finance Committee Chairman found that the value of the approximately $300 million-a-year Medicare Demonstration Project to report on a patient’s level of nausea, vomiting, pain and fatigue was for nothing.
    CMS paid chemotherapy providers $130 per report, per infusional-chemotherapy recipient, on a patient’s level of nausea, vomiting, pain and fatigue. However, HHS’ inspector general’s office found these providers were being paid an extra $130 to simply forward the data that was already collected.
    A continuance of the Medicare Demonstration Project would have exacerbated existing economic and clinical problems instead of resolving them by increasing the temptations for physicians to overuse injectable drugs and promise to aggravate the ecnomic problems Congress attempted to fix with the new Medicare law.
    According to Dr. John Glaspy, director of UCLA’s Outpatient Oncology Clinic, one complicating factor, experts say, is that oncologists make significant revenue buying cancer drugs from manufacturers and charging patients a higher price for receiving the drugs in their offices. That profit motive could influence some doctors’ decisions. A six-month course of treatment can cost more than $10,000 per patient.
    It’s still your mother’s chemotherapy drug concession. Although the new Medicare bill tried to curtail the drug 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. Let’s take physicians out of the retail pharmacy business and let them be doctors again!!!