Comments on: Drugmakers Lose AWP Lawsuit

By: Ed

Ed — Mon, 25 Jun 2007 22:03:05 +0000

What happened to free trade?

By: Melody

Melody — Fri, 22 Jun 2007 19:54:30 +0000

Former Pharma Marketer–

You’ve hit the soft, hidden underbelly of the whole Big Pharma debacle. Legal drugs cannot enter a patient’s body WITHOUT the assistance of a medical professional (usually an M.D.). Until accountability is also required in this quarter, patients are still at risk of harm. Docs can point all the fingers they want at Big Pharma, about what they didn’t know, and weren’t told . . . but as professionals who SHOULD put patient welfare above all else (yes, even above their Caribbean vacation), they are certainly one of the “bad guys” in our current healthcare crisis.

By: Former Pharma Marketer

Former Pharma Marketer — Fri, 22 Jun 2007 19:25:38 +0000

What should not be overlooked in this entire scenario is the role of the physician. Most of these products were sold directly to physicians at a steeply discounted price. The pricing strategy that was implemented (at least for the brand with which I am familiar) was not an artificial escalation of the AWP, but a quantity-based discount applied to the acquisition cost to the physician. It was the physician who failed to pass on the discount to Medicare and other payors. It was the physician who realized the greatest financial benefit from these pricing scenarios– paying one price for the drug and submiting a significanly higher price for reimbursement, e.g. the “spread”. In actuality, the pharmaceutical manufacturer realized a much lower revenue per unit sold as a result of this pricing strategy.

This pricing strategy was so popular among physicians that individual doctors were banding together to form LLP purchasing entities solely for the purpose of qualifiying for steeper discounts…… and, hence, higher profits (aka Return to Practice). The real crime here is that, owing to the profitability of this transaction, the utilization of some drugs may have been expanded into patient populations for which there was no proven benefit. To extend the financial gains even further, physicians were known to pay for their six-figure drug bill with their personal American Express cards, collect the Membership Rewards points and then cash in the points to fund their Caribbean vacation or their flat screen TV.

So, don’t be too quick to position the pharmaceutical industry as the villain in this story. There is clearly another partner in crime in this story……. the doctor!

By: Adam J. Fein

Adam J. Fein — Fri, 22 Jun 2007 12:14:33 +0000

Great coverage. And once again, you found the coolest graphic to illustrate your story!

FYI, I discuss the implications of this ruling over on Drug Channels:

http://www.drugchannels.net/2007/06/comments-on-awp-decision.html

Best,
Adam