Drug rebates are a formula for bad care

Published May 10, 2007

A marketing scheme by drug giants Johnson & Johnson and Amgen threatens the very foundation of the doctor-patient relationship: trust. Both companies give doctors hefty rebates based on the quantity of anemia medications prescribed. Those same bestselling brands - Procrit from Johnson & Johnson and Epogen and Aranesp from Amgen - were the subject of a recent warning by the U.S. Food and Drug Administration that high doses could do more harm that good. So the drug companies' tactic is not only despicable but dangerous.

Prescribed to raise a patient's hemoglobin level, often after chemotherapy or kidney dialysis, the drugs' sales soared to $10-billion last year. They are Medicare's biggest drug expense. That explains why the companies can easily afford to share the wealth with doctors. While neither company reports the value of its rebates, the New York Times learned that a six-doctor cancer practice in the Pacific Northwest got a $2.7-million cut from Amgen for prescribing its anemia drugs last year.

While doctors are prohibited from receiving payment for prescription medications obtained by the patient through a pharmacy, the rules don't apply to intravenous drugs administered in the doctor's office or a clinic, as the anemia drugs are. The rebates work this way: A doctor pays full price for the drugs and then is sent a rebate, based on the amount purchased. The doctor can then bill the insurance company for the full amount and pocket the difference.

While doctors and the two drug companies deny that the rebate scheme influences medical decisions, the process sounds too much like bribery, especially when you look at the trend. The average dose of the drugs has nearly tripled for dialysis patients in the past 15 years, the New York Times reported. The drugs may even be counterproductive for cancer patients, some studies found.

Proper dosage of those drugs is a matter of life or death. A recent study cited by the FDA showed that patients given high doses of the drugs "are at a significantly increased risk for serious and life-threatening cardiovascular complications." Yet neither Johnson & Johnson nor Amgen has run tests to determine the proper dosage of their drugs.

So it is left up to doctors to decide. When treating their most vulnerable patients, doctors should be guided by medical science, not profit. Yet with these drugs, if doctors prescribe more they make more money.

Neither doctors nor the drug companies should want to put themselves in that ethically questionable position. There is a simple solution: Congress should outlaw all drug rebates.