The House Energy and Commerce Committee on Thursday opened an investigation into the pricing and reimbursement of oncology drugs under the federal-state Medicare program for indigent patients, requesting records from 26 pharmaceutical companies, three major drug wholesalers and cancer center operator US Oncology.
The move comes less than a week after AstraZeneca Pharmaceuticals paid $355 million in criminal penalties and a civil settlement of federal Medicare and Medicaid fraud charges regarding free samples of the prostate cancer drug Zoladex that the company provided to oncologists.
A federal prosecutor in Wilmington, Del., says hundreds of physicians remain under investigation for falsely billing federally funded health plans.
AstraZeneca is not among the drug companies named in the congressional inquiry.
Energy and Commerce Chairman Rep. Billy Tauzin (R-La.) and Rep. James Greenwood (R-Pa.), who chairs the subcommitee on oversight and investigations, sent letters to the heads of each of the 30 companies on Thursday.
The lawmakers say the new investigation builds on a 2001 inquiry into the pricing practices of pharmaceutical companies under Medicare that revealed a wide spread between what drugmakers charged healthcare providers and what the Medicare program reimbursed providers for oncology treatments.
Tauzin and Greenwood want to see records and other information regarding pricing and reimbursement practices for drugs administered and billed to Medicaid since January 1998.
"Such practices are unacceptable in the view of the committee, which is why we are in the process of moving legislation to address these issues," they write in their letter to US Oncology Chairman and CEO R. Dale Ross.
In a statement, US Oncology says it plans to cooperate with the committee but does not elaborate.
"It's in the early stages of the inquiry," spokesperson Steve Sievert says.
US Oncology operates or provides management services to more than 450 practice sites, including 76 cancer centers, in 29 states, with a total of 875 affiliated physicians. The Houston-based company says Medicaid accounts for less than 3% of its net patient revenue.
Among the drug companies asked for information, GlaxoSmithKline, Aventis and the Pharmacia unit of Pfizer already face civil suits in New York state accusing them of fraud in pricing cancer drugs and bribery of physicians to choose the companies' cancer drugs over those of competitors.