Hospital pharmacists protest higher cancer drug costs in survey

March 3, 2015

A national survey of pharmacy professionals released March 3 found that a move to specialty drug distribution of three primary cancer drugs is resulting in higher costs to hospitals and reduced availability of the medications.

A national survey of pharmacy professionals released March 3 found that a move to specialty drug distribution of 3 primary cancer drugs is resulting in higher costs to hospitals and reduced availability of the medications.

Healthcare services company Novation conducted the survey of 200 hospitals in January to “test Genentech's assertions that their decision to change distribution methods [the manufacturer shifted to specialty distributors for its drugs Rituxan, Avastin and Herceptin in October, 2014] would improve efficiency and safety, and prevent shortages”, according to a statement from Novation. “However, the results show – overwhelmingly – that not only did these issues not exist for these drugs, but also that Genentech's decision had the opposite impact.”

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It has been estimated that the change has cost US hospitals more than $300 million, according to Novation. In fact, 87% of hospital respondents reported a negative financial impact on their organizations, with 57% saying the impact has been significant, according to the survey.

In addition, more than 25% of respondents indicated the distribution change has had a negative impact on patient care, resulting in delays and even cancellations in patient treatment due to drug unavailability.

Dillon"The negative financial impact of the Genentech decision has been significant at Mayo Clinic," said Kevin Dillon, chief pharmacy officer for Mayo Clinic in Rochester, Minn. "The new specialty distribution model is less efficient, forcing us to increase inventory levels of these expensive cancer drugs. These survey results confirm that negative patient impacts have occurred due to delays or decreased access to needed treatments. The decision by Genentech has not been in the best interest of patients."

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A signficiant 93% of hospitals said they had never experienced shortages of any of the 3 drugs prior to Genentech's change in the distribution model. As a result of the change, hospitals say they must now order more frequently and are encountering more variable and unreliable delivery times, according to Novation.

"When Genentech made its decision, Novation and major healthcare systems from across the country expressed concerns that it would hinder the ability of providers to deliver high-quality care in the safest and most efficient manner to cancer patients," said Peter Allen, senior vice president at Novation. "As the survey results demonstrate, those concerns have been borne out. Genentech's decision to use a higher cost, less effective, less efficient distribution system is reducing the availability of these critical cancer drugs, and is increasing costs to hospitals."

Last November, the leaders of 16 major healthcare systems, including Mayo Clinic, Cleveland Clinic, Yale New Haven Health, Memorial Sloan Kettering Cancer Center among others, joined Novation in calling on Genentech to reverse its decision to move to a specialty distribution model in an open letter to Genentech's CEO.

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