Transcript: Testimony of Dr. Patrick Cobb on drug shortage

Senate Committee on Finance hearing on “Drug Shortages: Why They Happen and What They Mean” held on Dec. 7, 2011

Testimony of Dr. Patrick Cobb, Frontier Cancer Center and Blood Institute: 

Dr. Patrick Cobb, Frontier Cancer Center and Blood Institute. IMAGE SOURCE:

“Chairman Baucus, Ranking member Hatch, and members of the Committee, thank you for giving me an opportunity this morning to talk to you about impact of the drug shortage crisis on cancer patients throughout the United States.

“I have been a private practice oncologist in Billings, Montana for the last 16 years. Every day patients come to me asking a simple but critical question: ‘Can you help me?’ For most of my career the answer has generally been ‘Yes.’ That is, up until now.

“The recent shortage of generic chemotherapy drugs has significantly limited our treatment options and, in many cases, have made treatments much more expensive than they have to be. I want to share the stories of two patients to illustrate the problems we’re facing.

“Jerry is the father of two young children who came to the emergency room complaining that his nose wouldn’t stop bleeding. Ultimately, the workup showed that he had acute leukemia, which a deadly disease but one that is very curable with chemotherapy. The standard treatment involves a generic drug called Cytarabine, but that drug is in very short supply. We were able to find enough Cytarabine to get Jerry through his first cycle of therapy. But now the problem is that his condition demands a significantly higher dose of Cytarabine to cure his disease, and we’re not sure we will be able to find enough drug to complete his treatment.

“So what do I tell Jerry, his wife, his parents, his kids? ‘Well, Jerry, with proper treatment you have a good chance of surviving your leukemia, but I don’t know if I can find enough Cytarabine to treat it. We may have to consider an alternative treatment, but one that regimen doesn’t have the same track record of cure.’ As you can imagine, this is not a conversation that any oncologist wants to have with a cancer patient.

“Another patient, Donna, who is a senior that’s covered by Medicare, was recently diagnosed with colon cancer. She had surgery that removed the primary tumor, but the pathologist found that the cancer had spread to three lymph nodes, which puts her at increased risk that the cancer would return. By giving her chemotherapy post-operatively I can decrease the odds that the cancer would come back and significantly improve the likelihood that she’ll be around to watch her granddaughter graduate from high school in three years.

“Donna’s chemotherapy regimen involves Leucovorin, a generic drug that costs Medicare about $35 and Donna’s 20% copayment is about $9 per treatment. Unfortunately, Leucovorin is another one of these drug that’s in short supply. [If] we can’t find enough Leucovorin, I have to use Fusilev, a brand-name drug. The problem is that Fusilev is significantly more expensive for both Medicare and for Donna. So if we have to use Fusilev, it costs Medicare over $24,000 more and Donna’s share of this is an extra $6,000 more for the 12 cycles of treatment.

“What do I tell Donna? ‘Sorry Donna, but I have to substitute a drug that’s significantly more expensive. It’s going to cost you an extra $500 per treatment, even though it’s not any more effective than the cheaper drug.’ Again, a very difficult conversation to have with a patient.

“I speak with oncologists from across the country on a regular basis and I can assure you that these patients’ stories are not unique to Montana. Cancer treatment is being delayed, changed, and in cases even stopped everyday in the United States.

“When I’m faced with a cancer patient, I have to determine the origin of the disease before I implement treatment. In analyzing the drug shortages, it is clear there are a lot of causes, but it’s clear that the root cause is economics. It can be tracked back to the way Medicare Part B reimbursement was changed in the Medicare Modernization Act of 2003. Although I agree with the intent to better balance payments for cancer drugs and services, there have been some unintended consequences.

“The first consequence has been the closing of cancer clinics and the consolidation of clinics into the more expensive hospital setting due to Medicare reimbursement cuts to both drugs and services. The Medicare reimbursement system is based on ASP, or the average selling price of a drug, which acts as a form of price control. As a result, we have cases where some drugs actually the cost cancer clinics more than Medicare reimbursement pays.

“The drug shortage crisis is another direct consequence of the MMA. Lowered payment for generic drugs have resulted in fewer generic manufacturers. Now at first blush, falling prices should look like a good thing for Medicare and for patients. But the problem is that there are now few manufacturers who are willing to produce sterile injectable chemotherapy drugs for what can be less than a dollar ASP per vial. Any manufacturing, regulatory, or quality problem is then magnified, and this leads to shortages when there are so few producers.

“We have to treat the underlying cause of drug shortages, not just the symptoms. I believe that the drug shortage problem is a direct consequence of the reimbursement system that was set up by the MMA, and it has be changed. It’s critical that Congress move quickly to modify the Medicare reimbursement system, not just cut to cut reimbursement any further as some have propose, and to create appropriate incentives for generic manufacturers. The lives of cancer patients hang in the balance.

“Thank you very much for listening.”


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2 Comments on “Transcript: Testimony of Dr. Patrick Cobb on drug shortage

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