Erosion of Drug Margin Will Not Slow

Abstract

To the Editor: I read with some dismay the analysis of Akscin, Barr, and Towle in the July 2007 issue of JOP, which would indicate that community oncology practice is presently in a deepening financial crisis.1 While the study has the disadvantage of only a limited response rate of 13%, it is the first collection of data I have seen that reveals the change in practice economics since the average sales price drug reimbursement formula was put in place. The information in Figure 5C shows that for 25% of practices, there is no margin in drugs, which provide 77% (Figure 4) of the practice revenue. Furthermore, as some of these practices are forced to close or curtail operations, they will drop out of the drug-purchasing pool. Their inability to purchase pharmaceuticals at an acceptable margin indicates that they are at the wrong end of the spectrum that makes up the average sales price; as they leave, the ASP will shift downward. I, therefore, disagree that “it is reasonable to expect that the erosion of drug margin will slow,” but would alternatively suspect that it there will continue to be pressure on the viability of practices. I applaud the authors for this vital study, and look to the ASCO Membership and Leaders to disseminate this data among the public policy planners, legislators and private insurance stakeholders who can impact the clear threat to patient access and care.