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Medical Centers Ask Congress to Probe Change in Distribution of Key Cancer Drugs

Health care executives see $1 million in added supply-chain costs

Last September, Genentech changed its distribution policy for three popular cancer drugs, Avastin (bevacizumab), Herceptin (trastuzumab), and Rituxan (rituximab). As of October 1, the company made the treatments available only through six specialty distributors: ASD Healthcare; BioSolutionsDirect; Cardinal Health Specialty Distribution; McKesson Plasma and Biologics; Morris & Dickson Specialty Distribution; and Smith Medical Partners.

Now, 10 major U.S. academic medical centers have sent a letter to congressional leaders asking them to review Genentech’s decision.

Before the changes, hospitals could purchase the drugs through wholesale distributors.

In an article in Modern Healthcare, Steve Rough, director of pharmacy for the University of Wisconsin Hospital and Clinics in Madison, estimated that the new distribution model for the three cancer drugs would add more than $500,000 in supply-chain costs.

According to the letter sent to Congress, however, the original $500,000 estimate may be low. The letter states: “We have heard from many of our health care professionals that this change will adversely affect patient care, create an undue financial burden, and lead to inefficient, labor intensive, and costly pharmacy operations. Many of our centers have already estimated impacts around $1 million to their operations as a result of this decision.”

The letter goes on to say:

“The current wholesale delivery system permits just-in-time inventory procurement. We believe that changing the procurement system for these drugs threatens access and patient safety with an increased likelihood of inventory shortages and treatment delays since the medications can no longer be obtained through wholesalers with routine daily orders. Providers will be compelled to increase inventory in order to hedge against any potential delivery problems or delays... Genentech’s decision to restrict the distribution methods for three of the most common outpatient cancer drugs forces hospitals to receive the drugs only via six authorized specialty distributors instead of the less-expensive wholesale channels.”

The hospital executives asked Congress to begin an “expedited review” of Genentech’s decision and the effect it will have on cancer patients’ timely access to treatment.

The signatories included Mount Sinai Medical Center, Johns Hopkins Medicine, the University of Pennsylvania Health System, New York–Presbyterian Hospital, and the University of California System.

Sources: BioSpace; November 12, 2014; and Letter to Congress; November 6, 2014.

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