Avastin Dose Costing $6,600 Became $27,360 in Hospital Billing /
By Charles R. Babcock
March 4 (Bloomberg) -- The single biggest item in the medical bills from Terence Foley’s seven-year fight with kidney cancer was $27,360, for each of four intravenous treatments with Avastin, a cancer drug made by Genentech Inc.
The charges from the Hospital of the University of Pennsylvania in Philadelphia, where Foley died in 2007 at the age of 67, were included in almost 5,000 pages of medical records compiled by Bloomberg. The amount was more than four times what Genentech said the cost should have been and four times the total paid by Foley’s insurer.
The nonprofit hospital, part of the University of Pennsylvania Health System, is contractually barred from discussing the markup, according to Susan Phillips, a spokeswoman. The system, which includes three hospital, collects on average 25 cents of each dollar billed, and prices need to be high enough to cover uncompensated care that totaled more than $100 million last year, Phillips said in an e-mail.
A financial report for the system’s fiscal year ended June 30, 2007, showed a 16 percent operating margin, or income after expenses, depreciation, amortization and interest.
“Genentech has no control over if or how a hospital, pharmacy or doctor chooses to mark up our medicines,” said Edward Lang Jr., spokesman for South San Francisco-based Genentech, in an e-mail. Genentech was acquired last year by Roche Holding AG of Basel, Switzerland.
Hospital Promises Refund
Another hospital in the same university system, Penn Presbyterian Medical Center in Philadelphia, billed Foley’s insurance provider $8,120 for a smaller dose of Avastin in December 2006, the records show. At the time, he was participating in a clinical trial, and Genentech was providing the medicine free of charge.
When questioned about the billing, Phillips said it was an error and that the hospital would refund the $6,496 it collected from UnitedHealthcare, a medical insurance unit of UnitedHealth Group Inc., based in Minnetonka, Minnesota.
In 2006 and 2007, Genentech was charging wholesale distributors $550 for 100 milligrams of Avastin, according to Lang. The company paid the middlemen a fee of less than 3 percent with the understanding they wouldn’t mark up the price to doctors and hospitals, he said.
Based on Genentech’s pricing, the cost of Foley’s December 2006 treatment of 350 mg of Avastin during the clinical trial would have been $1,925, or less than one-fourth the amount Penn Presbyterian billed. This was the dose for which the hospital refunded the insurance company.
Nine months later, when Foley was no longer in the clinical trial, the University of Pennsylvania hospital’s cost for each treatment of 1,200 mg would have been $6,600 at the price quoted by the drugmaker. In response to billings for $27,360 a dose, a different insurer, WellPoint Inc.’s Empire Blue Cross & Blue Shield, paid $6,665.40, Foley’s records show. Empire’s discount of 76 percent compares with UnitedHealthcare’s 20 percent.
To contact the reporter on this story: Charles R. Babcock in Washington at cbabcock1@bloomberg.net.
Last Updated: March 4, 2010 00:01 EST |
