Answer sought for cancer drug pay woes

Bill would add payments for services that now rely on Medicare overpayments for prescription drugs.

By Markian Hawryluk, AMNews staff. March 4, 2002.

Washington -- Congressional leaders are committed to reducing the price Medicare pays for drugs commonly administered by physicians, but only if the cut won't hurt patient access.

Hearings and reports in recent years have documented overpayments by Medicare for the handful of outpatient prescription drugs it covers -- mainly those that cannot be self-administered by the patient. Lawmakers want to save money by bringing payments for these drugs in line with their acquisition costs.

Currently, manufacturers set an "average wholesale price" that often bears no relation to what physicians pay for the drugs. The government reimburses physicians this price minus 5%, but doctors typically purchase the drugs for much less.

Several physician services are dependent on the extra funding the average wholesale price brings to make up for a shortfall in reimbursement for the delivery of those services. Oncologists say they would be particularly hard hit if the price for chemotherapy drugs and other cancer treatments were cut without raising payment for those services.

According to a spokesman for the Energy and Commerce Committee, that panel's chair, Billy Tauzin (R, La.), plans to offer wholesale price legislation this year. The bill would require drug manufacturers to report an average sales price, reflecting the true cost of purchasing the medications -- including manufacturer-provided rebates, charge backs and other discounts to purchasers -- and base Medicare payments on those rates. The committee also may include other safeguards when it releases the bill. [...]