March 6, 2015
By Alex Keown, BioSpace.com Breaking News Staff
SAN FRANCISCO -- Genentech officials disagree with the results of a recent survey that found the company’s new distribution method for its cancer drugs is causing delays in treating of patients in 88 percent of its hospitals and clinics.
Officials with Genentech said they have only directly heard complaints about three cases since they altered the distribution method last year and is unaware of any additional dissatisfaction. Those three cases were reported shortly after the switch and no other concerns have been shared via a hotline the company set up following the distribution change, the company said. Genentech said those three issues of patient-delayed care were resolved immediately, according to a FiercePharma report.
According to the survey, released earlier this week by health care services company Novation, when Genentech switched Avastin (bevacizumab), Herceptin (trastuzumab), and Rituxan (rituximab) to a specialty distribution channel it led to major disruptions for hospitals that rely on Genentech‘s oncology drugs. About 81 percent of survey participants said Genentech’s move from a broader network of distributors to a handful of specialty distributors for its medications had a significant impact on expenses. Additionally 63 percent said deliveries have become unreliable and 88 percent reported the change caused a delay in patient treatment because the medication was unavailable.
An overwhelming 99 percent of participants said Genentech’s decision to change its distribution model did not improve supply channels. It has also been estimated this change has cost U.S. hospitals more than $300 million.
In the fall of 2014 California-based Genentech informed the hospital systems it serves that the three oncology drugs would only be available through six specialty distributors. The company said the change was necessary to improve distribution management, and to ensure supply when there are manufacturing challenges.
That decision was met with fierce opposition. Ascension Health banned Genentech representatives from its 1,900 medical facilities and said that the new policy would create an extra $500,000 supply-chain cost, BioPharmaDive reported. Additionally 10 other health systems, including Boston-based Partners Healthcare, Mt. Sinai Medical Center in New York and Ohio State University Medical Center, concerned about the increase in costs they said amounted to tens-of-millions of dollars and disruption in services, have petitioned Congress to look into the situation.
In the letter they said the restrictions caused by the new distribution platform created “unplanned expenses” that hindered additional investments in research and new technologies that could benefit patients at the medical facilities. The letter writers said they would be forced to increase their drug inventories to hedge against any disruption in supply, according to the letter.
According to a Wall Street Journal report, a Genentech spokesperson said the use of specialty distributors has not been an issue with other drug the pharmaceutical giant manufactures. For example, the breast cancer treatment drug Perjeta, which was approved by the FDA in 2012, was only approved for a limited supply due to a supply problem. The use of specialty delivery services ensured the medication got to the patients who needed it, the spokesperson told the Wall Street Journal.
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Last week controversy erupted over the compensation package for Sanofi’s new CEO, Olivier Brandicourt, with several French government officials decrying the amount, calling it “incomprehensible.” Brandicourt could walk off with as much as $4.5 million in a “golden handshake” payment in addition to making $4.76 million a year. That base figure is comprised by a fixed annual salary of $1.36 million a year, which is supplemented by a performance-related bonus of between 150 to 250 percent, as well as stock options and performance shares.
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