Medicare regulations may be causing shortage of cancer drugs

Medicare Drug CoverageA month’s long shortage of cancer drugs may be the result of Medicare regulations. For several years, Medicare has provided coverage for cancer patients, allowing them to obtain treatments that they would otherwise have no access to. While Medicare offers this coverage, however, the number of cancer fighting drugs has been falling steadily. The phenomenon may be the result of a regulation within the Medicare system that dictates that doctors must purchase cancer drugs, not patients.

Traditionally, patients have been responsible for purchasing their own medications as prescribed to them by doctors. When it comes to cancer drugs, however, oncologists must be the ones to purchase the medication. After the purchase, oncologists send a bill to Medicare, who pays the amount in full. This has been common practice almost as long as the program has existed, but a 2003 federal legislation put an end to it all with unintended consequences.

The 2003 legislation placed a rigid ceiling on the price of cancer drugs, meaning that manufacturers were faced with a thinning profit margin. As cancer drugs become mainstream, their price can drop by as much as 90% as competing pharmaceutical companies compete for market share. This presents companies with a choice: Either produce potentially life-saving drugs for no profit, or stockpile drugs and slowly release them to the market at an inflated price.

This practice, though dubious in nature, is not technically in violation of any laws of federal regulations, yet has caused problems with doctors being able to obtain cancer treatments for their patients.

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