tci Part B Insider - 2003 Issue 32

Drug Cuts: Oncologists Face Steep Drug Cuts, But Will Practice Expenses Compensate?

Many fear losing out on the swings without gaining enough on the roundabouts.As expected, the new Medicare reform bill sets in motion the process of cutting drug payments from 95 percent of average wholesale price. Drugs, with some exceptions such as infusion drugs, will drop to 85 percent of AWP in 2004, and then all drugs will drop to 106 percent of the "average sales price" starting in 2005. The formula for determining "average sales price" will differ for single-source and multiple-source drugs, but it'll involve surveying manufacturer prices to all purchasers, net of rebates and discounts...

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