Pricey Drugs Put Squeeze on Doctors

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The Wall Street Journal


Pricey Drugs Put Squeeze on Doctors
By MARILYN CHASE
July 8, 2008; Page A1


SAN FRANCISCO -- Long a burden for patients, hyperexpensive cancer drugs are causing economic havoc for another constituency in U.S. health care: doctors. American doctors rarely used to let costs factor into their treatment decisions. But rising prices -- some cancer drugs now cost more than $100,000 a year -- are dramatically changing that ethos in the field of oncology. Money issues are now disrupting relationships with patients, causing doctors to go into debt and threatening to interfere with treatment options. Unlike most physicians, who write patients prescriptions that they can fill at a pharmacy, oncologists must buy many drugs upfront because they're delivered intravenously in the office. As a result, doctors are on the hook until patients or insurers pay the bill. Reimbursement delays and denials are now more common as insurers clamp down on claims. Some patients can't afford high co-payments.

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Driving the problem is a new generation of drugs -- including Avastin from Genentech Inc. and Erbitux from ImClone Systems Inc. -- that are transforming cancer care, providing oncologists with the first new options in decades for desperately ill patients. But several months of treatment on these drugs can equal the down payment on a home or a child's college tuition. The average wholesale cost for a course of Avastin to treat one type of lung cancer, for example, is $56,000, according to Genentech. It can take 90 days to be reimbursed by Medicare or private insurance plans and even longer for patients to hand over their co-pays. Assuming insurance does cover a course of Avastin, a 20% co-pay comes to $11,200. Oncologists say this is forcing them into new and nerve-racking territory: weighing costs alongside a drug's potential effectiveness.

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Many health-policy experts say it's high time for American doctors to start considering costs when assessing treatment options. In 2007, the cost of cancer care alone reached an estimated $89 billion in the U.S., up from $72 billion in 2004, according to the American Cancer Society using data from the National Institutes of Health. In some state-run health-care systems in Europe, governments have long played the role of adjudicator, refusing to pay for certain drugs if they feel they're too expensive compared with the benefits they offer. In Britain, an independent agency reviews the cost and benefit of new treatments before recommending that the country's national health service pay for them. But in the U.S., patients are more likely to expect the latest treatments regardless of cost, and government plays a smaller role in determining whether a drug's clinical benefits are worth the price. Some U.S. doctors worry that confronting costs in the examining room could backfire, causing them to lose business if patients resent the dollars-and-cents discussion. Others worry about liability risks if they push a low-cost treatment option that later fails.

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While drug companies stress their financial aid programs for needy patients, oncologists say navigating these programs can take weeks of paperwork and phone calls. Wayne Keiser of the Redwood Regional Medical Group of Santa Rosa, Calif., says his practice hired three dedicated "financial counselors" whose job is to handle the bureaucratic process and paperwork needed to obtain free or discounted cancer drugs... At Georgia Cancer Specialists, one of the largest private cancer practices in the Southeast with 29 offices, oncologist Bruce Feinberg says inadequate reimbursements -- exacerbated by the cost of drugs -- are starting to come out of doctors' incomes. In addition, the practice has taken several steps to trim operations, including closing two unprofitable offices and adhering strictly to 10-minute time limits on regular follow-up office visits.

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At a chain of private cancer clinics called BreastLink near Los Angeles, John Link and his colleagues treat many women whose breast cancer has metastasized, or spread, rendering it incurable. The best that currently available treatments can do as a rule in such cases is slow the cancer's advance, prolonging life. Dr. Link favors a regimen that combines Avastin with a chemotherapy drug from Abraxis Bioscience Inc. called Abraxane, a newer version of the approved drug Taxol. Abraxane costs an average of $4,428 per treatment every three weeks, or $17,712 for four cycles, says an Abraxis spokesman. Studies compare it favorably with the older drug, but the combination isn't approved by regulators and some insurers deny coverage. The practice fronts hundreds of thousands of dollars in drug purchases a month. Last year, BreastLink doctors began the unusual practice of asking patients to sign a document promising to pay for the regimen if their insurance doesn't.

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