Wednesday, May 09, 2007

US health care system massively fouled up--example

Marketwatch posted today "Doctors reap millions for giving patients anemia drugs" which is summarized as "Two of the world's largest drug companies are paying hundreds of millions of dollars to doctors every year in return for giving their patients anemia medicines, which regulators now say may be unsafe at commonly used doses, The New York Times reported in its Wednesday editions."

As an example, the story describes how "documents given to The New York Times show that at just one practice in the Pacific Northwest, a group of six cancer doctors received $2.7 million from Amgen for prescribing $9 million worth of its drugs last year."

There are two key points which were outlined in the 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 payments are legal, but there is a concern in the industry that the payments give physicians an incentive to prescribe the medicines at levels that might increase patients' risks of heart attacks or strokes...On Tuesday, the Food and Drug Administration released a report that suggested that anemia drug use might need to be curtailed in cancer patients. The report, prepared by F.D.A. staff scientists, said no evidence indicated that the medicines either improved quality of life in patients or extended their survival, while several studies suggested that the drugs can shorten patients' lives when used at high doses"...

The rebate itself isn't a big deal, as far as what the doctors pay for the drugs because it is just an accounting transaction. The doctors know what their end cost for the drugs will be. The issue is that the pharma company has its list price for the drug, and its discounted price, which is what the doctors wind up paying depending on how much of the drug they buy. Charging a markup on the drug isn't necessarily unreasonable, depending on what the markup is since a doctor will have some overhead costs for keeping some inventory of the drug on hand and for staff costs. The problem is that different patients or their insurance companies will wind up paying a different price for the drug depending on how much of the drug a particular doctor prescribes in a year. If you were a self pay patient, you'd have an incentive to find out what doctor has the lowest price on the medication. But right now that information is unavailable. So patients wind up paying a different price for the same medication, based on factors that are invisible to them. I think most would agree that is fundamentally unfair.

The bigger issue is the FDA finding that the medication in question is essentially useless at best, and possibly harmful to patients at worst! Doctors are profiting from selling massive amounts of a drug that appears to do nothing. To sum up, this is an example of how our health care system is massively fouled up because a drug's price is inconsistent and the drug is useless anyway. Its an outrage!

The Houston Business Journal reports that "Heavy charges weigh on U.S. Oncology first-quarter results"...due to issues related to the anemia drug in question...two quotes from the HBJ story are below:

-"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 economic problems Congress attempted to fix with the new Medicare law."

-"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"...patients were prescribed a drug they didn't need, and they suffered significant side effects from the drug...

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