Health Law

Physician Rebates on Pharmaceuticals Inducements or Volume Discounts?

By Greg Piche'

    Can physicians be swayed in the prescription of drugs by volume purchase discounts that return substantial rebates to them on highly expensive drugs?  In an article in the New York Times this week, (Pollock, ?Secret Rebates Offered on Costly Eye Drug, November 3, 2010?) a Times Reporter explored the practice of pharmaceutical companies providing ?rebates? to physicians who purchase and use the drugs they sell on their patients.  Oncologists have long engaged in the purchase and resale of toxic agents used in the treatment of cancer. Recently  opthamologists have been provided the opportunity as well. Genetech?s Lucentis is a case in point.

    Lucentis is used in the treatment of macular degeneration. It costs $2,000.00 per injection and requires re-injection once a month at a cost of about $24,000.00 per year. Medicare reimburses the drug at about 6% above average cost (which includes the rebates). Doctors can receive a rebate of $120 per dose for the purchase of the drug. I am sure that if you are a person with macular degeneration access to this drug would appear as a godsend, particularly if the government is paying for it.

Interestingly, Genetech has another drug, Avastin, that if used ?off label? does effectively the same thing as Lucentis for $20 to $50 per injection. Last year, 480,000 injections of Avastin cost the medical system $20,000,000.  At the same time 337,000 injections of Lucentis cost $537,000,000. Lucentis is experiencing a 29% surge in utilization this year, with expected earnings of $1.1  billion dollars.  America has enjoyed the enormous benefits of easy access to treatment and health related services and the development of new and helpful devices and pharmaceuticals, but the costs are rapidly outrunning the country?s ability to pay for them.

    These kinds of ?rebates? seem to have a considerable influence for some physicians in the selection of treatment options.  You can probably bet that Lucentis is not a drug that is donated by physician offices to uninsured patients.  Rationing is already here and this is one of its forms. Can a society in which wealth is being rapidly redistributed away from the middle class, continue to expect that employers, the government, the unions or other third party underwriters of our health care system will continue to bare the burden of our self defined ?entitlements.?

Full post as published by Healthcare Law Blog on November 06, 2010 (boomark / email).