Survey Results: Genentech’s Decision to Change Distribution of Critical Cancer Drugs Raises Costs, Reduces Availability
March 02 2015 - 11:33AM
Business Wire
A national survey of pharmacy professionals released today by
Novation, the leading health care services company, found that a
move to specialty drug distribution of important cancer drugs is
resulting in higher costs to hospitals, reduced availability of the
important drugs and delays in treating sick patients. These drugs
are used in treating half of all cancers in the United States. It
has been estimated that this change has cost U.S. hospitals more
than $300 million.
The survey was designed to test Genentech’s assertions that
their decision to change distribution methods would improve
efficiency and safety, and prevent shortages. However, the results
show – overwhelmingly – that not only did these issues not exist
for these drugs, but also that Genentech’s decision had the
opposite impact.
According to the January 2015 survey of more than 200
hospitals:
- 87 percent of hospital respondents
reported a negative financial impact on their organizations since
manufacturer Genentech shifted to specialty distributors for its
drugs Rituxan®, Avastin® and Herceptin® in October of 2014, with
57% saying the impact has been significant.
- More than 25 percent of respondents
indicated the distribution change has had a negative impact on
patient care, resulting in delays and even cancellations in patient
treatment due to drug unavailability.
- 93 percent said they had never
experienced shortages of any of those three drugs prior to
Genentech’s change in the distribution model.
- An overwhelming majority of respondents
(99 percent) indicate that Genentech’s decision to change its
distribution model did not improve supply channel
safety/integrity.
As a result of the change, hospitals say they must now order
more frequently and are encountering more variable and unreliable
delivery times.
“When Genentech made its decision, Novation and major healthcare
systems from across the country expressed concerns that it would
hinder the ability of providers to deliver high-quality care in the
safest and most efficient manner to cancer patients,” said Peter
Allen, senior vice president at Novation. “As the survey results
demonstrate, those concerns have been borne out. Genentech’s
decision to use a higher cost, less effective, less efficient
distribution system is reducing the availability of these critical
cancer drugs, and is increasing costs to hospitals.”
Rituxan®, Avastin® and Herceptin® were previously sold through
national wholesalers, whose approximately 75 distribution centers
supported a “just-in-time” delivery system that allows health care
facilities to receive shipments at least daily and is seen by many
providers as critical to managing costs, avoiding stockpiling of
drugs, and maximizing care to patients.
Specialty pharmaceutical distributors typically have only one or
two distribution centers and utilize common carrier delivery
companies – factors that increase cost and reduce efficiency and
reliability.
In November 2014, leaders of 16 major health care systems,
including Mayo Clinic, Cleveland Clinic, Yale New Haven Health,
Memorial Sloan Kettering Cancer Center among others, joined
Novation in calling on Genentech to reverse its decision to move to
a specialty distribution model in an open letter to Genentech’s
CEO.
“The negative financial impact of the Genentech decision has
been significant at Mayo Clinic,” said Kevin Dillon, Chief Pharmacy
Officer for Mayo Clinic in Rochester, Minn. “The new specialty
distribution model is less efficient forcing us to increase
inventory levels of these expensive cancer drugs. These survey
results confirm that negative patient impacts have occurred due to
delays or decreased access to needed treatments. The decision by
Genentech has not been in the best interest of patients.”
“On behalf of the patients we serve at Eastern Connecticut
Health Network, we encourage Genentech to reconsider its decision
about the distribution of their pharmaceuticals,” said Steven
Hurchala, BS Pharm, RPh, Director of Pharmacy Services, Eastern
Connecticut Health Network. “Genentech’s principles have negatively
impacted their quality of service, the financial implications for
their customers, and more importantly, how those principles will
affect patient care.”
Added Allen: “On behalf of our hospital members, we have asked
Genentech directly to revert back to their previous model that
worked extremely well for years.”
Approximately 1,440 surveys were distributed via email with a
survey link to Directors of Pharmacy, Pharmacy Professionals, and
Pharmacy Drug Info/Clinical Coordinators in health care facilities
across the U.S. There were 219 responses for a response rate of
15.2 percent. Market Strategies International, an ISO 20252
certified market research firm, reviewed the survey and the
methodological approach, and confirm that both the survey and the
approach conforms to industry standards and is a reliable approach
to data collection.
About Novation, Recipient of the Ethisphere Institute’s
Ethics Inside Certification
Novation is the nation’s leading health care services company,
focused on revolutionizing operational performance for more than
100,000 members and affiliates of VHA Inc., UHC, Children's
Hospital Association and Provista LLC. Novation’s progressive
approach to cost performance, data and intelligence, and integrated
advisory solutions helps health care providers envision and advance
new models of cost-effective, high-quality care. Headquartered in
Irving, Texas, Novation is committed to the highest standards of
ethical behavior and twice has been honored with the Ethisphere
Institute’s coveted Ethics Inside® Certification, and has been
named three years consecutively to Ethisphere’s World’s Most
Ethical Companies list. Follow @NovationNews on Twitter.
For a copy of the full survey results, please contact David
Matthews at damatthe@vha.com or call 972-830-2901.
for NovationDavid Matthews, 972-830-2901damatthe@vha.com