Hiltzik Examines Payment for Oncology Drugs at UCLA Cancer Clinics
Los Angeles Times columnist Michael Hiltzik on Thursday profiled the experience of John Glaspy, professor of medicine at the University of California-Los Angeles Medical Center and medical director of UCLA's Bowyer Oncology Center, who attempted to reduce his university's $13 million annual bill for chemotherapy drugs. According to Hiltzik, the issue raises questions about whether the University of California system received the "best value from a contract" with purchasing groups Cardinal Health and Novation, and it "shed[s] a glimmer of light on a deal whose key terms ... are secret."
Changes to Medicare reimbursement rates for oncology medications adversely affected the budgets for the four community cancer clinics Glaspy runs, prompting him to seek information about the contract with Cardinal and Novation, which "presumably leveraged the vast buying power of the five UC medical centers to obtain enormous discounts," Hiltzik writes. According to Hiltzik, Glaspy made a "few phone calls" and discovered he could "beat the Cardinal/Novation price" on oncology medications by about $800,000 annually.
However, UC officials "told him to back off," and his discovery set off "months of conflict between UC headquarters and UCLA, where campus purchasing agents were sufficiently intrigued to wonder whether they could do better without Cardinal/Novation," Hiltzik writes. UC officials did not allow UCLA officials to see the contract terms but did tell the school that removing the oncology medications from the contract "would threaten discounts for the whole [UC] system," according to Hiltzik.
Eventually, UC allowed the clinics to purchase their own chemotherapy medications, matching savings found by Glaspy. Hiltzik writes that despite the resolution, the "question remains: Has the University of California been overpaying for all its chemo drugs for the last four years? ... And what about the other pharmacy purchases at the five UC medical centers, which total about $200 million a year?" (Hiltzik, Los Angeles Times, 2/17).