Healthy Skepticism Library item: 2864

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Crown E.
Medicare Fraud Settlement Causes Oncologists To Lose Income, USA
Medical News Today 2005 Dec 8
http://www.medicalnewstoday.com/medicalnews.php?newsid=34664

Notes:

Ralph Faggotter’s Comments:

This one is for all those doctors who deny that members of their profession can be or have been corrupted by pharmaceutical company inducements.

Note:

1/. Just because you are already very wealthy, does not mean you will be reluctant to engage in highly unethical activities to become more wealthy.
2/. Doctors and pharmaceutical companies sometimes engage in mutually rewarding but fraudlent activities.
3/. These activities are not necessarily in the best intesests of their patients and may result in inappropriate prescribing.

Full text:

Medicare Fraud Settlement Causes Oncologists To Lose Income, USA
Category: Cancer/Oncology News
Article Date: 08 Dec 2005

Many oncologists will earn 30 to 50 percent less a year as a consequence of a $1.1 billion Medicare fraud settlement with two leading cancer drug manufacturers, according to a study in the Dec. 1 issue of the Journal of Clinical Oncology.

The study was led by Charles L. Bennett, M.D., professor of medicine, division of hematology/oncology, at Northwestern University Feinberg School of Medicine and an investigator at The Robert H. Lurie Comprehensive Cancer Center of Northwestern University.

The cases centered around a major sales promotion effort by two pharmaceutical companies, AstraZeneca and TAP Pharmaceuticals, that encouraged urologists who received free drug samples to provide the samples to their Medicare-insured prostate cancer patients and to bill Medicare the $1,200 charge for the product.

Many urologists earned an extra $100,000 annually in income with this program, and some of the busier urologists earned over $1 million.

The TAP and AstraZeneca cases alleged that the spread between prices paid by physicians for cancer drugs and the amount reimbursed by Medicare and Medicaid ranged from 12 percent to 77 percent of the acquisition prices and was an important factor used in the marketing of the prostate cancer drugs.

TAP and AstraZeneca employees were alleged to refer to the spread between the physician’s purchase price and the Medicare Average Wholesale Price reimbursement as the “return to practice” of “profit” that physicians could anticipate from buying their product.

Before 2005, Medicare reimbursement was based on Average Wholesale Price and included funds designed to cover the acquisition cost of cancer drugs plus administration-related overhead such as rent, personnel costs and bad debt.

In 2005, as a result of the settlements against the pharmaceutical companies, Medicare shifted to Average Sales Price-based reimbursement to address concerns that marketing incentives were driving pharmaceutical sales.

This change is expected to result in an 8 percent decrease in the mean revenue of oncologists and a decrease in physician reimbursement for cancer drugs.

Bennett’s collaborators on this study include researchers from the Feinberg School; the Jesse Brown Veterans Affairs Center Lakeside; the Mid-West Center for Health Services and Policy Research; Rush Medical College; the University of Illinois at Chicago; Louisiana State University School of Medicine; Walter Reed Army Medical Center; and the Eastern Virginia Medical School.

Elizabeth Crown
e-crown@northwestern.edu
Northwestern University
www.northwestern.edu