Cancer Chemotherapy Concession

Share Article

The April edition of CancerWire focuses on the “Chemotherapy Concession” which allows oncologists to make a profit on the chemotherapy drugs that they prescribe to cancer patients.

A recent study published in the journal Health Affairs “Does Reimbursement Influence Chemotherapy Treatment for Cancer Patients” revealed that the so-called “Chemotherapy Concession” is still in effect and that financial reimbursement has a direct effect on which chemotherapy drugs are prescribed to patients.

This study by researchers from the University of Michigan and Harvard University found that oncologists who were more generously reimbursed prescribed more costly chemotherapy regimens to metastatic breast, colorectal and lung cancer patients. The study demonstrated that the chemotherapy concession (doctors making profits from prescribing chemotherapy) that brought Congressional attention several years ago is still with us and is still controlling prescribing patterns.

The Chemotherapy Concession

Unlike other doctors, medical oncologists (doctors who prescribe chemotherapy) can profit directly from prescribing certain drugs. Oncologists can purchase chemotherapy at lower prices than the amounts that the insurance company pays them and then pocket the difference. This mark-up, which can be as high as 86%, is called the chemotherapy concession. The Health Affairs study revealed that this type of reimbursement prompts some oncologists to use more expensive drugs with better mark-ups for the doctor. For example, the study found that for breast cancer patients, a one-dollar increase in a physician’s reimbursement resulted in the use of chemo drugs that cost $23 more. The authors said, "Although reimbursement seems to have little effect on the primary decision to administer palliative chemotherapy to patients with advanced solid tumors, it appears to affect the choice of drugs used."

Why This Hurts Patients

The Chemotherapy Concession can harm patients in at least three different ways: 1) it creates a potential conflict of interest; 2) it may expose patients to more experimental drugs; 3) it may deplete a patient’s insurance benefits (i.e. drug coverage).

Potential Conflict of Interest - The Chemotherapy Concession gives oncologist other reasons to prescribe chemotherapy and select specific drugs. Patients must now ask why their doctor is prescribing more and different chemo. What is behind the decision? Oncologists insist that money has nothing to do with it. But, a New York Times article about the University of Michigan/Harvard Study (“Study links cancer doctors’ pay and their treatment”) cites Dr. Craig Earle, one of the study's authors and an associate professor of medicine at Harvard and an oncologist at the Dana- Farber Cancer Institute in Boston. According to the Times, Dr. Earle stated that despite their insistence that oncologists’ treatment decisions are based solely on what is best for the patient, these decisions are affected by payment policies and other financial influences, including gifts from drug companies.

Newer Experimental Therapies - Typically more costly chemotherapy drugs with higher reimbursement are those that are newer. Because the newer drugs have less of a track record in terms of safety and efficacy (i.e. less post approval marketing surveillance), there may be less known about their safety and efficacy. Therefore, it is possible that a patient may get a drug that is more dangerous to them or less efficacious because of a monetary incentive.

Patient’s Insurance - Someone is paying to put that extra money in the oncologists’ pockets. Because the costs of premiums are directly related to expenditures, the chemotherapy concession hurts all of us by siphoning money away from patients, employers and payers and into the hands of one class of provider.

What You Can Do

Obviously, a patient wants a clinical decision to be based only on clinical information, not on how much money the doctor gets to keep. If you are a patient, you should know if there are any financial incentives at work in determining what cancer drugs you are being prescribed. Ask your oncologist: Why are you prescribing these drugs? What is their published efficacy and toxicity in other patients with the same cancer? Do you have any research or financial interests in prescribing these drugs? Are these drugs a profit center for you in respect to reimbursement?

Obviously you do not want a confrontational relationship with your doctor. And just because a doctor makes a profit from the drugs they prescribe does not mean that the drugs are inappropriate for you. A trusting partnership between doctor and patient that facilitates informed consent is the goal for many proactive patients. Such a partnership, however, may require an understanding of all the factors that lead to a treatment recommendation.


Of course, none of this information in CancerWire is a substitute for professional medical advice, examination, diagnosis or treatment and you should always seek the advice of your physician or other qualified health professional before starting any new treatment or making any changes to an existing treatment. No information contained in Cancer Monthly or CancerWire including the information above, should be used to diagnose, treat cure or prevent any disease without the supervision of a medical doctor.


Share article on social media or email:

View article via:

Pdf Print

Contact Author

Michael Horwin
Visit website