October 3, 2014
By Mark Terry, BioSpace.com Breaking News Staff
Ascension Health, a Catholic-based system of 130 acute-care hospitals, recently sent a memo to its employees setting a policy that Genentech sales representatives were no longer welcome in their facilities. The memo also indicated that Genentech sales representatives have been “red-lighted” by its vendor credentialing system.
The Ascension policy came in response to a letter Genentech sent in mid-September to hospitals and health systems. The letter indicated that effective October 1, three high-profile cancer drugs, Avastin, Herceptin and Rituxan, will only be available through six authorized specialty distributors: ASD Healthcare, BioSolutionsDirect, Cardinal Health Specialty Distribution, McKesson Plasma and Biologics, Morris & Dickson Specialty Distribution and Smith Medical Partners. Hospitals previously were able to acquire those drugs through wholesale distributors, which typically purchase the drugs at volume and offer significant discounts to hospitals as a result.
Although Ascension and other hospitals have expressed disapproval over this policy, the three drugs involved are so important to cancer treatment that it’s highly unlikely anyone will stop buying the drugs, no matter how they have to acquire them.
The move has repercussions within overall healthcare reform issues. Steve Rough, the University of Wisconsin Hospital and Clinics (Madison, WI) Director of Pharmacy, in a Modern Healthcare article, indicated that this new distribution model for these three drugs would probably add more than $500,000 in supply chain costs.
In part, Ascension’s memo said, “This action, combined with Genentech’s choice to not contract for cost relief on any of their products, reduces the dollars needed to provide the breadth of care important to our communities.”
Genentech had already added three other oncology infusion drugs to its specialty distribution model: Gazyva, Kadcyla and Perjeta. The company argues that the new model makes it easier for them to track where the drugs are being purchased. “There are some business efficiencies for Genentech,” said Genentech spokeswoman Charlotte Arnold in a statement. “But we also believe this model best preserves patient safety and access.”
Although not taking a position on Ascension’s ban on Genentech sales reps, the Hematology/Oncology Pharmacy Association made a statement: “HOPA is optimistic that continued messaging from professional organizations and individual institutions regarding the patient and financial impacts related to Genentech’s decision will persuade them to have a stakeholder’s meeting to find a mutually agreeable solution.”
HOPA also sent a letter directly to Genentech CEO Ian Clark pointing out that the company’s distribution policy would have financial and medical implications, such as delays in therapy. “Since the medications can no longer be obtained through our wholesalers with our routine daily order, there is an increased opportunity for running out of medication, resulting in treatment delays.”
Genentech responded to HOPA with its own letter, written by Marc Watrous, Genentech’s senior vice president of Managed Care & Customer Operations. It said, in part, “We feel strongly that moving to the specialty distribution model will best serve patient safety and patient access to our oncology medicines. We are committed to doing everything possible to help ensure patient access and protect patient safety. By utilizing specialty distributors, we are better able to more efficiently manage supply and prevent disruption in patient treatment.”
