By ALEX BERENSONPublished: June 12, 2007
After a decade in which doctors gained cumulatively billions of dollars from the pharmaceuticals they recommended, Medicare decided to change the way it paid for cancer medications. Many doctors claim that their prescribing habits were unaffected by such revenues.
But it’s clear that drug manufacturers thought they did. The earnings that doctors could gain from prescribing a prescription were occasionally calculated by large pharmaceutical corporations down to the last penny, according to industry records that have surfaced in a federal civil lawsuit in Boston. According to the records, sales agents discussed these profit projections with doctors and their employees.
In a 2000 PowerPoint presentation, a Bristol-Myers Squibb executive informed staff that “Reimbursement Today, Reimbursement Tomorrow, Reimbursement!” was oncologists’ top priority.
Dr. Robert Geller, an oncologist who practiced privately from 1996 to 2005 before leaving to work for a biotechnology firm, claimed that cancer doctors were aware of the profits they could generate and occasionally changed treatment plans or provided extra care to boost revenue.
It’s obvious that doctors stopped making decisions based on what made clinical or scientific sense in favor of what made more financial sense, according to Dr. Geller.
The gains that doctors could make by prescription pharmaceuticals increased from being a minor source of income to becoming the main driver of salaries for oncologists during the 1990s as the use and cost of cancer drugs surged. According to a Bristol-Myers report from 2001, oncologists derived over 65% of their salary and a sizable portion of their net income from drug sales.
The data was gathered for a case that Judge Patti B. Saris is currently hearing in the Federal District Court in Boston.
Cancer patients and health insurers claim in the lawsuit that they were overcharged for oncology medications because drug manufacturers set list prices for doctors’ reimbursement that were significantly higher than the actual costs that doctors incurred.
The action, which was first brought in 2001, has been divided into many classes of plaintiffs and defendants due to the intricacy of the case. Judge Saris presided over the first trial in the case in November and December of last year. He has not made a decision. The accused in that trial were AstraZeneca, Bristol-Myers, Johnson & Johnson and Schering-Plough — Four of the top 20 pharmaceutical businesses worldwide.
The exhibits used in the initial trial are part of the public record, despite the fact that many of the lawsuit’s documents are still under seal. They demonstrate that company personnel visited oncologists’ offices with spreadsheets to demonstrate to doctors how much money they might make.
Schering-Plough, for instance, claimed to its representatives in 1998 that the bladder cancer medicine Intron-A could generate a profit for each patient of “$2,373.84 for our physicians only on the drug alone.” An AstraZeneca sales professional was more direct when promoting the prostate cancer drug Zoladex. In a letter to a group of urologists in Arizona, he said, “DO THE MATH!”