Simple controls on drug-company practices could save the nation billions of dollars a year in wasteful chemotherapy spending by the federal Medicare program and private health insurers, a new analysis suggests.
In a new study published in the British Medical Journal (BMJ), researchers at Memorial Sloan Kettering Cancer Center found nearly $3 billion is wasted every year in healthcare costs tied to cancer medicines that are thrown out because drug makers distribute the drugs only in vials that hold too much for most patients.
The findings, by a group of cancer researchers, come as many doctors and patient advocacy groups are criticizing the high and rising costs of cancer drugs, which pharmaceutical companies say are necessary to cover their spending on research and development.
The expensive drugs at the heart of the new study are usually injected by nurses in doctors’ offices and hospitals who carefully measure the amount needed for a particular patient and then, because of safety concerns, discard the rest.
If drug makers distributed vials containing smaller quantities, nurses could pick the right volume for a patient and minimize waste, the study suggest.
But many drug makers exclusively sell one-size-fits-all vials, which means many patients pay thousands of dollars for medicines they are never given. Some of these medicines are distributed in smaller vial sizes in Europe, where governments play a more active role than the United States does in drug pricing and distribution.
“Drug companies are quietly making billions forcing little old ladies to buy enough medicine to treat football players, and regulators have completely missed it,” said Dr. Peter B. Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering and a co-author of the study. “If we’re ever going to start saving money in health care, this is an obvious place to cut.”
The researchers analyzed the top 20 selling cancer medicines and concluded that insurers paid drug makers $1.8 billion annually on discarded quantities and then spent about $1 billion on markups to doctors and hospitals.
Just one example: Takeda Pharmaceuticals sells Velcade, a drug for the treatment of multiple myeloma and lymphoma, only in 3.5-milligram vials that sell for $1,034 and hold enough medicine to treat a person who is 6 feet 6 inches tall and who weighs 250 pounds. If a patient is smaller, a quantity of the precious powder is thrown away.
Some non-cancer drugs also generate waste, including Remicade, an arthritis drug sold by Johnson & Johnson for which an estimated $500 million of the drug’s $4.3 billion in annual sales comes from quantities that are thrown away.
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