Thursday, November 4, 2010

Is there an ethical problem with doctors receiving $ from drug companies? first of two articles

Genentech Offers Secret Rebates for Eye Drug

Genentech has begun offering secret rebates to eye doctors as an apparent inducement to get them to use more of the company’s expensive drug Lucentis rather than a less costly alternative.
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Madalyn Ruggiero for The New York Times
Dr. Greg Rosenthal, a retina specialist, said the rebates on Lucentis amounted to bribery.
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Madalyn Ruggiero for The New York Times
Barbara Glassner gets an injection of Avastin, another drug made by Genentech.
Under the program, which started on Oct. 1, medical practices can earn up to tens of thousands of dollars in rebates each quarter if they use a lot of Lucentis and if their usage increases from the previous quarter, according to a confidential document outlining the program that was obtained by The New York Times.
Lucentis, approved in 2006, is mainly used to treat age-related macular degeneration, the leading cause of blindness in the elderly. It costs about $2,000 for each injection, with an injection into the eye needed as often as once a month.
The competition comes from Avastin, another Genentech drug that has the same mode of action. While Avastin is approved only to treat cancer, many retina specialists say it works just as well in the eye as Lucentis. So they are using it off-label because each injection costs only $20 to $50.
Using Avastin instead of Lucentis saves Medicare — and costs Genentech — hundreds of millions of dollars a year.
The rebates are considered a form of volume discount, and have been offered for some other drugs. They are legal if they adhere to certain guidelines.
Still, some doctors said they had ethical concerns about the arrangement.
“There’s no way to look at that without calling it bribery,” said Dr. Greg Rosenthal, a retina specialist in Toledo, Ohio, who has been critical of attempts by Genentech to get doctors to use Lucentis. He is not a participant in the rebate program.
Genentech, which is owned by the Swiss company Roche, said in a statement, “Rebate and discount programs are a common business practice across the industry, including in the field of ophthalmology.” The company said it had such programs for other drugs and that they “help reduce the cost of our medicines for hospitals, pharmacies and doctors.”
Senator Herb Kohl, chairman of the Special Committee on Aging, who has investigated efforts to curtail the use of Avastin in the past, criticized the Lucentis incentives.
“This rebate program appears to be an attempt to reverse the trend of significantly reduced reimbursements that Genentech has been receiving from Medicare for Lucentis,” Mr. Kohl, a Democrat from Wisconsin, said in a statement. “I am highly doubtful that Medicare will benefit in any way from the rebates being offered to doctors.”
Since both Lucentis and Avastin are administered in the doctor’s office, doctors buy the drugs and are then reimbursed by Medicare or private insurers.
Medicare reimburses at 6 percent above the average selling price of a drug, so that doctors can profit from use of a drug. For Lucentis, that 6 percent would translate to roughly $120 a dose. That potential profit increases if the doctors get a bigger discount when they purchase the drug, or a rebate later. Rebates are counted by Medicare in calculating the average selling price of a drug, so the new Lucentis rebates might help slightly lower the amount Medicare pays per injection in future quarters.
The issue of doctors profiting from drugs is fairly new to ophthalmology. Cancer doctors, however, have long made money on the chemotherapy drugs they administer in their offices, though such profits have been sharply reduced in recent years because they were perceived to be giving doctors an incentive to overtreat.
In 2008, Amgen stopped offering rebates to oncologists using its anemia drug Aranesp. Critics, including Senator Charles E. Grassley, Republican of Iowa, said the rebates might have been increasing usage even as studies were showing that high doses of the drug might be harmful.
Genentech suggested that it started the Lucentis rebate program now to spur doctors to try the drug to treat retinal vein occlusion. Lucentis was recently approved to treat that condition.
Some doctors said they thought the company might be worried about the results, expected next spring, of a clinical trial comparing Avastin and Lucentis in treating macular degeneration. If the drugs are proven equivalent, the rebates might help slow the defection to the cheaper alternative.
The rebates might also encourage doctors to give Lucentis off-label for other eye diseases or give more frequent injections.
Many doctors inject the drug less frequently than once every four weeks, the interval specified in the drug’s label.
Several retina specialists who were contacted did not know about the rebate program because it is being offered only to practices that use a certain amount of Lucentis. And doctors who have signed up for the rebates are not allowed to acknowledge even the existence of the program, let alone to talk about the specific terms.
“The existence of this agreement is confidential,” says the contract that medical practices are asked to sign.
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One retina specialist who is not in the program but heard about it from a colleague said that his Genentech sales representative declined to talk about it, instead handing him a slip of paper containing a number to call at Genentech.
This doctor, who spoke on condition of anonymity because he did not want to offend the company, said he was told when he called the number that the rebates were being offered only to the top 300 Lucentis-using practices. But he said that might still represent most use of Lucentis.
The program offers rebates based both on volume and on increases in use. For the volume part, the rebates range from 0.25 percent to 1.5 percent of the wholesale cost. One example provided in the document was that a practice using 600 vials a quarter would get a rebate of $8,775.
The rebate based on increased usage ranges from 1 percent to 1.5 percent. Growth in usage of only 0.01 percent qualifies for the 1 percent rebate, while growth of 10 percent or more qualifies for the top rebate. The example provided in the document was of a rebate of $9,652.50.
A practice meeting the minimum requirements for the largest rebates in both categories would receive more than $58,000 in the quarter, according to a calculation done by The New York Times.
Dr. David W. Parke II, chief executive of the American Academy of Ophthalmology, said the society was looking into the new program. “The issue is really does this constitute a financial inducement that in some way alters delivery of care in a way that is not in the patient’s best interest?” he said.
Dr. Parke said that Genentech obviously believed the rebates would sway physician practice. But he said he doubted a rebate of $20 or $30 an injection would be that influential.
“The dollars involved for the average practice are not likely to massively change a physician’s prescribing practices,” he said. Dr. Susan Malinowksi, a retina specialist in Southfield, Mich., disagreed, saying that with doctors’ income already facing cuts because of health care reform, the rebates would be welcome. Just on Wednesday, Medicare proposed cutting the separate fee, apart from the drug cost, that it pays doctors for giving injections into the eye. “$18,000 a quarter, $19,000, why would that not incentivize you?” said Dr. Malinowski, who was not offered the rebates.
The clinical trial that will directly compare Avastin and Lucentis is being sponsored by the National Eye Institute and will be closely watched.
“If Avastin is as good as or better than Lucentis, it’s obviously going to win,” said Dr. Lawrence J. Singerman, a retina specialist in Cleveland. He said the trial results would have more influence on doctors than the rebate.
Practices seem split now, with some using mostly Lucentis and others mostly Avastin, and some using Lucentis for well-insured patients and Avastin for others.
In 2008, Medicare paid for about 480,000 injections of Avastin to treat macular degeneration, compared with only 337,000 injections of Lucentis, according to Dr. Philip J. Rosenfeld of the University of Miami, who studied the records with Medicare officials. Yet the fewer Lucentis injections cost Medicare $537 million while the Avastin injections cost only $20 million.
Sales of Lucentis in the United States rose 29 percent in the first nine months of this year, to 1.08 billion Swiss francs, or about $1.1 billion, according to Roche’s financial report.


  1. As the current situation stands, I do not think it is unethical that a rebate is being offered to doctors who use Lucentis. Because Avastin, the alternative and much cheaper injection, has only been approved to treat cancer, it seems as though the offer of a rebate for the use of Lucentis would promote the proper treatment of age-related macular degeneration rather than the unsupported use of Avastin to treat this problem. At this time, the most effective drug for this condition IS Lucentis and this rebate makes it easier for doctors to treat this disease without worrying about the impact of cost. In the future, however, if studies prove Avastin to be just as effective as Lucentis, this rebate may be seen as an unethical bribery, because, if a doctor has two treatment options of equal effect- one being more expensive to the patient/Medicare while providing the kick back of a rebate to the doctor and the other being cheaper for the patient with no added benefit to the doctor- the doctors may be swayed by the potential financial gain of using Lucentis even though it is no more medically helpful.
    Financial incentives from insurance companies for the use of a particular drug could only truly be considered unethical if the drug they are promoting is considered harmful or less helpful than the alternative. In such a case, doctors could be convinced to use less effective treatments for the benefit of earning money. This would violate the ideals of beneficence and non-maleficence.

  2. I believe physicians should not receive any financial incentives to prescribe a certain medication to a patient. This Lucentis v. Avastin situation is one of the several reasons why healthcare costs are so high in the United States. There is a cheaper drug that is believed to do the same job as Lucentis, but some physicians will prescribe the more expensive one because they are benefiting from it in some way. This is unethical because it is an injustice to the patient. One of Immanuel Kant's formulations is to always treat people as an end, not a means to an end. A physician is supposed to treat a patient's illness and purely benefit from the fact that a patient's condition has been healed or controlled. A physician is not supposed to purposely give their patient the more expensive drug because somewhere along the road they will make more money for doing so. It all adds up in the end like the article cited. While Lucentis was prescribed less than Avastin, paying for all those Lucentis prescriptions was vastly more expensive than paying for those Avastin prescriptions when they practically do the same thing. Genentech knows they are in the wrong, otherwise why must physicians participating in this program keep quiet about the terms of their agreement? Things should not be this way and something should be done so this does not continue because when it comes down to the end of the day no one is benefiting from this as much as the doctor and Genentech are.

  3. I believe there is an ethical conflict with doctors who are given monetary incentives to prescribe certain medications. As part of the decision making process, Doctor must determine for themselves what course of treatment would be efficacious. Based on the individual patient, some drugs may be effective, while others may not be. In this case, I believe that doctors will be more inclined to prescribe the more expensive Avastin because, in all fairness, who would not like to make more money? This is unfair to the physicians because it poses an ethical dilemma for them, that they would not otherwise encounter if financial incentives did not exist. This, in turn, also puts stress on the patient because they must pay the price for the more expensive medication. For many, the increased price of medication means they cannot afford to receive adequate treatment, especially those who must pay out-of-pocket. The bottom line is that doctors’ perception of which medication is the “right” one to prescribe is skewed by the opportunity to profit from their prescription. This will ultimately alter the way in which they practice medicine, and that is wrong.

  4. Receiving payments isn't necessarily wrong, but it does raise ethical issues. The question is, to what degree can you trust that your doctor writes a prescription based only on your best interests as a patient? Yet the question itself seem strange - after all, from the principle of beneficence, what else would a doctor have in mind if not your safety? Clearly, pharmaceuticals companies may be exercising undue and unethical influence on doctors and what doctors prescribe. Any factor that will get in the way of a doctor exercising the ideal of beneficience, leads to unethical treatment for the most part. The fear is that a doctor is influenced to prescribe medication X over medication Y not because X is more effective but because the manufacturer provides greater financial gifts to him and to the insurance plan. Most especially in our present time, with the present health care reform, doctors are already facing cuts so rebates are most welcome as Dr Malinowski states.
    On the other hand, technically speaking, Lucentis is the best drug available for this condition, so doctors should be using this rather than Avastin whose use initially was to treat cancer. From a scientific point of view, we know more about the Lucentis and therefore should not be taking any risk with a drug that is not initially used to treat this condition, for the safety of the patients.