Hospital backlash begins after Genentech imposes change

Genentech's decision to limit distribution points for cancer drugs Avastin, Herceptin and Rituxan to just five outlets has triggered a hospital  backlash. The Wall Street Journal reports that Ascension Health has now banned Genentech sales reps from its 1,900 hospitals and that other systems are contemplating similar forms of protest.

The change announced last week will whittle down the number of outlets from 80 to around five, a shift the group purchasing organization Novation tells the WSJ is “a shockwave to pharmacy directors and purchasing managers,” but one a Genentech rep says should not really be a surprise, since a similar system is in place for other drugs, including other Genentech medications.

Critics worry that the reduced number of distribution points will increase costs by around $50,000,000 because it will do away with varying discount rates that existed under the multi-access point system.

Opponents also said they are concerned that the new prices will mean hospitals will not be able to cover the cost of what qualifies as a sufficient inventory of the drugs.