NCPA - National Center for Policy Analysis

Congress Watching Cancer Doctors Who Sell Drugs to Patients

January 28, 2003

Traditionally, doctors give patients prescriptions for drugs that are then filled at pharmacies. But cancer doctors, or oncologists, buy chemotherapy drugs themselves, often at discounted prices, and administer them intravenously to patients in their offices.

Cancer specialists reportedly can make huge profits from the difference between what they pay for the drugs and what they charge insurers and government programs.

  • Medicare -- which does not cover most prescription drugs -- does pay doctors about $6.5 billion a year for drugs they personally administer, largely cancer drugs.
  • Critics contend the government is paying the doctors more than $1 billion a year over what the drugs actually cost.
  • The General Accounting Office, in a 2001 report discovered that doctors, on average, were able to get discounts as high as 86 percent on some drugs.
  • Experts have estimated that oncologists in private practice typically make two-thirds of their practice revenue from the chemotherapy concession.

Oncologists argue that they need the profits from the drugs to make up for high costs in the rest of their operations. They contend they must spend enormous sums to have the facilities and employees that enable patients to receive chemotherapy outside a hospital, but under close supervision.

Source: Reed Abelson, "Drug Sales Bring Huge Profits, and Scrutiny, to Cancer Doctors," New York Times, January 26, 2003.

 

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