Are rebates for ca drugs a good deal?

Rebates can be a great deal if you’re buying a car, a computer, or a high-end kitchen gadget. But if you’re a medical oncologist, should you have to rely on rebates in order to obtain the best possible price on drugs for your patients?

It appears that some pharmaceutical companies think that you should. For example, the list price for darbepoetin (Aranesp) is so high that Amgen offers physicians rebates and discounts, which end up distorting the real manufacturer’s average sale price (ASP) of the drug. Physicians are then faced with purchasing the drug at prices approximately 20% to 35% above their reimbursement rate in anticipation of receiving several rebates and discounts. The hope is that with the discounts, the cost will eventually fall below the Medicare allowable of ASP+6%.

Basically, the manufacturer list price for darbepoetin is so high that it is nearly impossible to buy it as a single-source drug. Instead, companies are creatively bundling drugs, putting physicians under contractual obligation to purchase drugs as a package in order to get the best price and get the “rebate.”

The physicians must also negotiate an additional discount with the distributor, although there are instances where this discount is being eliminated.

While everyone loves a good deal, rebates don’t belong in the healthcare system. They border on unethical.

They can drive physicians to purchase and administer drugs that patients may not need. They also increase the cost of drugs, making them unaffordable and putting patient care at risk, not to mention contributing to the exorbitant cost of healthcare.

Oncologists/hematologists need to fight rebates now (see Table). Rebates and bundling are unfair and enable drug companies to form monopolies.

At Neltner Billing and Consulting, we’ve seen several small and solo practices close their doors because of high-priced drugs. Physicians should be able to provide affordable care to their patients.

Marty Neltner, a nationally recognized billing & coding expert has testified numerous times before Senate subcommittees and the AMA on issues concerning the practice of oncology. Mr. Neltner is the founder and president of Neltner Billing and Consulting.