[Pharm-policy] Taxol and Onxol pricing

[love@cptech.org]

http://cgi.usatoday.com/usatonline/20010911/3618116s.htm

 Page 2B 


Congressman: Overcharges common for 2 cancer drugs 
By Julie Appleby
USA TODAY


Patients and the government are overpaying for two medications taken by
millions of women fighting breast and ovarian cancer, allegedly so that
doctors can overcharge the government, a congressman says.

The cancer drugs, Taxol and Onxol, are just two examples of what some
lawmakers say is a common industry practice: drug companies listing
average wholesale prices for drugs higher than what is actually charged
on the open market.

That way, doctors can bill government and private insurers for the
higher, reported amount and pocket the difference. Marketing materials
from drug companies, released last year by the House Energy and Commerce
Committee, show that manufacturers expect such price inducements will
win business.

A dose of Taxol, made by Bristol-Myers Squibb, is currently priced by
drug companies in an official publication used by government health
programs at $1,826 a dose. Newly approved generic Onxol, made by Ivax,
is $1,727. Yet advertisements show those same drugs on sale to doctors
for $498 to $610 less. 

''The problem is, Medicare doesn't reap any of those savings, nor do
beneficiaries,'' says Rep. James Greenwood, R-Pa. Because many patients
pay up to 20% of a drug's cost, based on the average wholesale price,
they pay more, too. Greenwood says he will introduce legislation that
would peg government payments for medications closer to what is actually
paid by doctors.

Such drug industry pricing practices will be the subject of a hearing
Wednesday on Capitol Hill, where lawmakers also are wrestling with
whether to expand Medicare's prescription drug benefit to include
outpatient drugs. 

Bristol-Myers spokesman Bill Dunnett says the company ''believes its
pricing and marketing practices are fully compliant with all
applicable'' laws. An Ivax spokesman did not return calls for comment.

Medicare pays only for drugs that must be administered in a doctor's
office. Many of those are intravenous cancer treatments, including Taxol
and Onxol. Government reports show the pricing practice by various
companies affects about 50 drugs and costs state and federal taxpayers
up to $1 billion a year. 

The Office of the Inspector General says:

* Doctors can charge Medicare $18.02 for a dose of leucovorin, a cancer
treatment that costs them $2.94.

* Medicare could save $151 million a year if drug companies reported the
correct price of asthma treatment albuterol. 

More than half a dozen pharmaceutical companies are under investigation
by state and federal prosecutors for such pricing practices. One, Bayer,
agreed to pay $14 million in January to settle similar charges.