ORLANDO, FL – To the estimated 6,000 community oncologists nationwide, the concept of “shopping” doesn’t mean heading over to the mall to buy a new shirt or visiting the grocery store for a gallon of milk. It means seeking out the best deals for life-saving cancer drugs for their patients.
With studies indicating the average oncologist spends about $2.5 million to $3 million a year on drugs, that translates to a nationwide business of $16 billion a year – and a powerful need to make sure the right drugs get to the right doctors at the right prices.
Orlando, Fla.-based OneOncology, Inc. aims to make the process easier with an impartial electronic negotiating network. The company is now accepting registrations from community oncologists and distributors for its reverse auction platform, and expects to go live some time this summer.
“What we’re doing is highly impactful,” says M. Steven Kirchof, the company’s founder and CEO. “We’re being a market-maker. We’re creating a marketplace - like eBay.”
According to Kirchof and U. Ben Favret, the company’s co-founder and vice president of sales, community oncologists treat 85 percent of the nation’s cancer patients in practices that average 2.8 physicians and a 12:1 staff-to-physician ratio. Each oncologist sees an average of 350 new patients each year, they say.
In those practices, pharmaceutical expenses account for roughly 70 percent of the expense structure.
“The community oncologist in today’s environment is really at the mercy of the distributor,” says Kirchof, who further notes that the Medicare Prescription Drug Improvement and Modernization Act of 2003 placed limits on how much oncologists can be reimbursed for their purchases. “What we want to do is level the playing field.”
OneOncology’s technology will combine individual orders from community practices to allow drug distributors to bid on larger, guaranteed blocks of drug purchases on a line-item basis.
Kirchof says distributors are skeptical, though there are benefits for them, too. “Providing transparency and drug pricing is not what (distributors) would want,” he says. “There are concerns on their part that they’re losing control. On the other hand, this is where their customers are leading them.”