One hospital chain has struck back at Roche's ($RHHBY) Genentech unit for switching its top 3 cancer treatments to specialty distributors. Ascension Health, a Roman Catholic-based group of more than 130 hospitals, is barring Genentech sales reps at the door.
As Modern Healthcare reports, Ascension issued a memo to employees instructing them to keep the company's reps out. The hospital group has "red-lighted" the Genentech reps in its vendor credentialing system, the trade pub notes.
It's a move that's more style than substance; Ascension isn't going to stop using Herceptin, Rituxan and Avastin, the three biggest-selling cancer drugs in the world. The hospital chain--along with some other vocal hospital groups--want to pressure Genentech into backing away from the change.
Announced to hospital customers last month, the distribution change puts all three drugs into a specialty channel, restricting the number of distribution centers to 5 from about 80, spokeswoman Charlotte Arnold told FiercePharma. The authorized distributors are specialty units of wholesalers the company already had used to distribute its products.
The company says specialty distribution allows for tight inventory control and tracking, which is especially important in a supply crunch. For example, when Genentech launched its next-generation HER2 breast cancer drug Perjeta, the FDA allowed only a limited supply to reach the market. Using specialty distributors helped the company better manage that limited launch, Arnold said, and Genentech has since rolled two other drugs the same way, Kadcyla and Gazyva.
And then there's safety: "Based on our experience with those medicines, we have confidence that this model best serves patient access and safety," Arnold said, adding that the company is committed to working with hospitals to educate them about the new system.
If Genentech won't change its mind--which seems unlikely, given the company's reasoning behind it--Ascension appears to be offering another solution: Force a deal on their costs. The hospitals' key complaint is that they will lose rebates and other discounts that helped manage spending on the three meds. They're pricey, but as "workhorses" of cancer treatment--as one hospital exec said earlier this week--they're broadly used.
"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," Ascension's memo states (as quoted by Modern Healthcare).
Arnold says the list price and wholesale acquisition cost on the three drugs won't change, and the company believes patients' costs won't be affected either. As for the hospitals' rebates, Arnold said, "We're not privy to the terms between hospitals and distributors."
- read the Modern Healthcare story
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