Oncology Times:
doi: 10.1097/01.COT.0000291642.52529.b4
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▪ Oncologists Pessimistic About Medicare Bills

A recent ASCO survey of oncologists and directors of cancer centers has found that the cuts to cancer drug reimbursement as written in both the House and Senate Medicare reform proposals will have a dire impact on cancer care.

The survey was sent to 2,900 private practice oncologists, 900 of whom responded. More than half of the respondents said that Medicare beneficiaries made up a major portion of their practices.

According to the survey, if Medicare legislation passes as currently written:

▪ 53% of respondents said they would be forced to limit the number of Medicare patients they treat.

▪ 19% would stop treating Medicare patients entirely.

▪ 73% would send chemotherapy patients to a hospital rather than treat them in their offices. (Many hospitals say they will not be able to handle such a large influx of new patients).

▪ 42% would stop conducting office clinical trials.

▪ 44% of physicians (55% of those over age 55) would retire from practice earlier than they originally planned.

In other findings, about 75% of the 21 cancer center directors who responded said that their clinical trials programs would be adversely affected. Moreover, nearly all of those with satellite centers said they would be forced to scale back on those operations.

Figure. ASCO Preside...
Figure. ASCO Preside...
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“These cuts would devastate the best cancer care system in the world and disrupt the treatment of millions of patients, said ASCO President Margaret Tempero, MD.

“Eighty percent of cancer patients receive their care from the community practices that would be hurt most by these cuts. We want reform of the cancer reimbursement system, but not at the expense of our patients.”

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squf; Consumer Drug Ads Way Up

How effective are consumer drug ads? Effective enough for pharmaceutical companies to have tripled their budgets in that area over a five-year period. Direct-to-consumer advertising increased from $800 million in 1996 to $2.7 billion in 2001, according to a study commissioned by the Kaiser Family Foundation.

The Harvard University and MIT researchers who conducted the study found that the ads produced approximately $4.20 in sales for every $1 spent.

Although the bulk of drug company promotions (86%) are still aimed at physicians, consumer ads account for 14% of marketing budgets and are rising.

The study also found that consumer ads increase sales for all drugs that fall into the same category as a specific brand seen in a specific ad. As virtually all such ads conclude “Ask your doctor,” patients responding to an advertisement for a particular medication may not necessarily get the one they saw or read about.

Another area where drug company spending is rapidly increasing is political lobbying. As maneuvering over administering prescription drug benefits intensifies, the Pharmaceutical Research and Manufacturers of America is expected to spend at least $150 million in lobbying efforts over the next year, an increase over 20% for this year. The organization has also hired more lobbyists and increased the size of its staff.

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▪ Congress to Receive Better Rx Drug Benefits

While it works out the details of Medicare prescription drug benefits for other Americans, the House of Representatives has passed a plan that gives Congress and 270,000 retired federal workers more generous coverage than either the proposed Senate or House bills offer.

The current Federal Employees Health Benefits Program covers 80% of total drug costs. In contrast, the plan adopted by the Senate pays for 49%, while the House bill provides coverage of 55%.

The current Federal Employees Health Benefits Program covers 80% of total drug costs. In contrast, the plan adopted by the Senate pays for 49%, while the House bill provides coverage of 55%.

Under the Program, federal retirees receive additional advantages that are not found in the other proposals: no gap in coverage; no additional premium for drug benefits; and no deductibles.

A spokesman for Rep. Tom Davis (R-VA), who introduced the legislation in the House, told The New York Times that the bill was not about protecting Congress, but about protecting the interests of retirees. Sen. Daniel K. Akaka (D-HI) has introduced the same bill in the Senate, where it is expected to pass.

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▪ Help for Patients with Fatal Chronic Illnesses: HR 2883

Rep. James Oberstar (D-MN) has introduced the “Living Well with Fatal Chronic Illness Act of 2003 (HR 2883),” to improve the quality of end-of-life care.

The bill would establish a $3,000 refundable long-term care tax credit for caregivers of spouses, dependents, and certain other low-income patients. The credit could be directed to the patients or their family caregivers.

The proposed legislation also calls for research, demonstration projects, and educational programs within several government agencies. It directs the Department of Health and Human Services to investigate methods of adjusting payments and regulations to maximize quality and to report its findings to Congress annually.

The Center for Medicare and Medicaid Services would be required to set up pilot programs testing innovations in delivery of services.

In another provision, the legislation directs the Health Resources and Services Administration to designate people with fatal chronic illnesses as a medically underserved population, and fund training for health professionals, including palliative care and hospice workers, who take care of them.

In addition, the CDC and NIH would conduct research on various aspects of fatal chronic illness.

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▪ More Money for Better Care

Medicare officials are trying a new and practical approach to improving hospital care—money. Under a three-year pilot program known as “pay for performance,” 550 hospitals across the country will receive a 2% bonus if they are found to offer high-quality treatment for three medical conditions: heart attacks, heart failure, and pneumonia; and two surgical procedures: hip or knee replacement, and coronary artery bypass.

Under the plan, hospitals whose quality measures are in the top 10% will receive a 2% increase in their Medicare payments for each of the five conditions. Those in the second 10% will get a 1% increase.

The bonuses are expected to amount to $7 million a year over the three-year period. After that time, Medicare will be permitted to impose a 2% fee reduction for low-ranked hospitals, but only if they have shown no signs of improvement.

Hospitals whose quality measures are in the top 10% will receive a 2% increase in their Medicare payments for each of the five conditions, and those in the second 10% will get a 1% increase. The bonuses are expected to amount to $7 million a year over the three-year period.

Critics of the experiment are not focusing on the plan itself, but on the choice of Premier, Inc., a purchasing company for hospitals, to collect and evaluate the data.

Premier has been under investigation by the Inspector General of the Department of Health and Human Services, the Federal Trade Commission, a Senate subcommittee, and the attorneys general of New York and Connecticut for charges that include anti-trust violations, anti-competition agreements, and conflict of interest.

The company, which purchases drugs and equipment for more than 25% of the nation's hospitals, won its exclusive contract without going through a competitive bidding process. All 550 hospitals in the program are Premier clients.

The Administrator for the Centers for Medicare and Medicaid Services (CMS), Thomas A. Scully, said he had not known about the charges, but added that Premier's buying arm and its data-collecting services are separate entities. However, the company's software products must be used to crunch the numbers on the data it collects. The company recently announced that it has adopted a code of conduct and hired an ethics advisor.

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▪ Promises by Army Recruiters Held Invalid

In the aftermath of World War II and the Korean War, some army recruiters encouraged veterans to reenlist by telling them that they would receive free lifetime health care after serving in the military for 20 years. Now, the Supreme Court has refused to hear an appeal of a Federal Appeals Court decision, which held that such promises were illegal because Congress never authorized the recruiters to make them.

Two former Air Force officers, both of whom served in the armed forces for more than 20 years, brought the suit. They requested reimbursement for medical expenses they incurred since they retired, charging that the government had broken its contract with them.

As the law now stands, retired members of the military and their dependents pay a monthly premium for medical benefits that are provided under Medicare.

In rejecting the suit, the Appeals Court acknowledged that the recruiters had in fact given the men such assurances. In their ruling the judges said they hoped that “Congress will make good on the promises recruiters made in good faith to plaintiffs.” Congress is expected to be asked to do just that.

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▪ New Global AIDS Coordinator

President Bush has chosen Randall Tobias, the retired CEO of Eli Lilly & Co, to serve as the Global AIDS Coordinator, in which position he will lead the administration's $15 billion effort to fight AIDS in Africa and the Caribbean. If confirmed by the Senate, he would have the rank of Ambassador and report directly to Secretary of State Colin Powell.

“Throughout his career, Randy has shown the ability to manage complex organizations and to navigate government bureaucracies,” President Bush said at a news conference where he introduced Mr. Tobias. “He has earned a reputation as an executive of great energy, resourcefulness, good judgment, and integrity.”

Given his career in the pharmaceutical industry, critics of the nomination fear that Mr. Tobias will favor patented drugs manufactured in the US over cheaper generic ones from other countries. Both AIDS activists and the religious right are waiting to see what stand he will take on the controversial abstinence-only approach to AIDS prevention. The extent of his knowledge about the African continent is also being called into question.

On the other hand, Mr. Tobias has staunch supporters who argue that as a highly successful businessman and acknowledged consensus builder, he will run an efficient and effective AIDS program. Since his retirement, Mr. Tobias has devoted himself to philanthropy through a family foundation. Supporters note that Indiana's largest AIDS advocacy group is one of the groups he has actively supported.

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▪ Drug Discount Card for Seniors

House and Senate conferees have agreed on a plan under which the government will endorse drug discount cards to reduce prescription drug costs for Medicare beneficiaries.

Low-income people who do not qualify for Medicaid will receive up to $600 a year to augment the card, which will not be available to the six million Americans who receive Medicaid.

The committee has resolved nearly one third of the Medicare bill, but the consensus has been reached where there were relatively few differences. The hardest work lies ahead. The amount of the discount was not specified, but the card could reduce drug costs by 15% to 25% by next year.

Although it is a relatively minor aspect of the legislation, there are important political ramifications.

A drug discount card would provide tangible help to older Americans well before the November 2004 elections, while the more comprehensive drug benefits won't kick in until 2006. It is a widely known fact of political life that seniors vote in large numbers.

Observers say that the country's 41 million Medicare beneficiaries are not entirely happy with either the House or Senate bills, both of which they generally consider to be too little and too late. This response has come to be known as an “expectations gap.”

They are particularly disappointed that the $400 billion that Congress will provide over 10 years does not come close to covering their estimated $1 trillion in drug costs over that same time.

“We know that legislation of this scope can never fully satisfy every interested party,” said AARP CEO Bill Novelli in a letter to the members of the conference committee. “Nevertheless, there are a number of fundamental issues—primarily the program structure and the adequacy and affordability of the benefit package—that must be fixed before AARP and its members could support the final conference agreement.”

© 2003 Lippincott Williams & Wilkins, Inc.

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