Internet Sandostatin Cost Survey

Summer 2003 by:
Eugene A. Woltering, MD, FACS
The James D. Rives Professor of Surgery and Neuroscience
Chief, Section of Surgical Endocrinology
Director of Surgical Research
Louisiana State University Health Sciences Center
New Orleans, LA 70112
telephone (504) 568-2344
fax           (504) 568-4633
pager       (504) 679-7977
cell          (504) 884-3555

Sandostatin® is currently reimbursed by Medicare under what is called a “J-code”. Interestingly, any form of Sandostatin (aqueous or LAR) is covered by this J-code; 1 mg of Sandostatin is reimbursed at $88.69/mg. Thus, whether a patient receives a 10, 20, or 30 mg dose of LAR, the cost per mg is the same. Not only is the cost per mg the same, but the same J-code is used for all doses. Therefore, if you get LAR 10 mg, your supplier bills this J-code ten times for LAR; for LAR 20 mg, they bill this J-code 20 times. In contrast, octreotide acetate aqueous form is commonly dispensed in 5 mg multidose vials. The reimbursement for this aqueous injectable somatostatin analog is identical to the LAR form (i.e., the reimbursement for 5 mg is $443.45, or J-code billed 5 times).

TABLE 1.

LAR Dose (mg)	W.A.C. Cost	Medicare Reimbursement*
10	$1,300.64	$886.90
20	$1,493.76	$1,773.80
30	$2,007.29	$2,660.70
5	$785.05	$443.45

* Louisiana

W.A.C. – wholesale average cost

 J-code 2352 – $88.69 per 1 mg (any form of Sandostatin)

Thus, the actual cost of drug from Novartis is “set in stone”. Variations in what the drug costs an individual patient are not a reflection of the price that Novartis charges for the medication.

In an effort to understand the regional differences in the cost of octreotide acetate either in an aqueous or a long- acting (LAR) form, we performed an internet survey. No personal patient identifiers were requested. Patients supplied the form of their octreotide use (LAR vs. aqueous), the dose that they were using per month, and the cost of that dose. Many patients supplied additional information on the cost of medication when it was obtained from a pharmacy or from their physician’s office. The only other information requested was the state or region in which they live. Data was collected, and was sorted by form and dose of medication. This data was then analyzed to determine the mean and median cost of medication, and was further subsorted by the mean (± standard deviations), median cost, and maximum and minimum cost. (Tables 2 and3).

TABLE 2.

LAR Dose (mg)	# of Responses	Mean	± SD	Median	Minimum	Maximum
20	26	$3,511	$2,263	$2,971	$1,213	$11,910
30	42	$5,212	$2,867	$4,845	$1,333	$12,000

Following creation of mean and standard deviations, quartiles were created for LAR doses of 20 and 30 mg drug charges (Figs.1 a, b, c, 2 a, b, c). From these observations, it appears that there is a huge variance in the amount that patients are being charged for their Sandostatin across the U.S.  This survey suggests that, in general, the lowest costs are incurred when patients purchase their LAR from a pharmacy and “brown bag” the medication to their doctor’s office where it can be administered.

FIGURE 1A – BILLED CHARGES FOR A 20 MG DOSE OF SANDOSTATIN LAR

FIGURE 1B – MEDIAN COST OF A 20 MG DOSE OF SANDOSTATIN LAR

FIGURE 1C – MEAN AND STANDARD DEVIATIONS OF COST OF A 20 MG DOSE OF SANDOSTATIN LAR

FIGURE 2A – COST OF A 30 MG DOSE OF SANDOSTATIN LAR

FIGURE 2 B – MEDIAN COST OF A 30 MG DOSE OF SANDOSTATIN LAR

FIGURE 2 C – MEAN AND STANDARD DEVIATIONS OF THE COST A 30 MG DOSE OF SANDOSTATIN LAR

TABLE 3. 

State/	OA Form	Dose	Frequency	Dose/	Cost/	Cost/
Region				Month	Dose	Month
AL	LAR	20	Monthly	20	$3,100	$3,100
AL	LAR	20	Monthly	20	$3,068	$3,068
AZ	LAR	20	Monthly	20	$3,734	$3,734
CA	LAR	20	21 days	30	$1,800	$2,700
CA	LAR	20	Monthly	20	$4,800	$4,800
CA	LAR	20	21 days	30	$1,720	$2,458
CT	LAR	20	Monthly	20	$1,742	$1,742
FL	LAR	20	Monthly	20	$3,500	$3,500
FL	LAR	20	Monthly	20	$11,913	$11,913
IL	LAR	20	Monthly	20	$2,540	$2,540
LA	LAR	20	Monthly	20	$1,900	$1,900
MI	LAR	20	2 wks	40	$2,600	$5,200
MT	LAR	20	Monthly	20	$1,750	$1,750
NY	LAR	20	Monthly	20	$2,500	$2,500
OH	LAR	20	Monthly	20	$4,000	$4,000
OH	LAR	20	Monthly	20	$3,442	$3,442
OH	LAR	20	Monthly	20	$1,660	$1,660
ON	LAR	20	Monthly	20	1820 CAN	1820 CAN
PA	LAR	20	Monthly	20	$4,580	$4,580
TN	LAR	20	Monthly	20	$2,752	$2,752
TX	LAR	20	Monthly	20	$6,000	$6,000
TX	LAR	20	Monthly	20	$6,840	$6,840
TX	LAR	20	Monthly	20	$3,490	$3,490
TX	LAR	20	Monthly	20	$6,000	$6,000
TX	LAR	20	Monthly	20	$2,874	$2,874
WA	LAR	20	Monthly	20	$1,773	$1,773
AL	LAR	30	Monthly	30	$2,500	$2,500
AZ	LAR	30	Monthly	30	$7,360	$7,360
AZ	LAR	30	Monthly	30	$4,700	$4,700
CA	LAR	30	2 wks	60	$9,180	$18,360
CA	LAR	30	2 wks	60	$12,000	$24,000
CA	LAR	30	2 wks	60	$9,180	$18,360
CA	LAR	30	2 wks	60	$4,457	$8,914
CA	LAR	30	Monthly	30	$1,600	$1,600
CA	LAR	30	Monthly	30	$6,900	$6,900
CA	LAR	30	2 wks	60	$2,500	$5,000
CA	LAR	30	2 wks	60	$2,216	$4,432
CO	LAR	30	Monthly	30	$9,772	$9,772
FL	LAR	30	Monthly	30	$5,961	$5,961
FL	LAR	30	Monthly	30	$6,000	$6,000
FL	LAR	30	Monthly	30	$7,000	$7,000
GA	LAR	30	Monthly	30	$2,400	$2,400
MI	LAR	30	Monthly	30	$5,550	$5,550
MO	LAR	30	2 wks	60	$2,165	$4,330
NC	LAR	30	2 wks	60	$7,450	$14,900
NC	LAR	30	Monthly	30	$4,890	$4,890
NC	LAR	30	Monthly	30	$3,285	$3,285
NC	LAR	30	Monthly	30	$6,000	$6,000
NC	LAR	30	Monthly	30	$3,800	$3,800
NH	LAR	30	Monthly	30	$5,280	$5,280
NJ	LAR	30	Monthly	30	$4,800	$4,800
NS	LAR	30	21 days	40	$1,600	$2,133
NY	LAR	30	Monthly	30	$2,600	$2,600
NY	LAR	30	Monthly	30	$3,228	$3,228
OK	LAR	30	Monthly	30	$3,250	$3,250
ON	LAR	30	21 days	40	2400 CAN	3200 CAN
ON	LAR	30	Monthly	30	2000 CAN	2000 CAN
PA	LAR	30	Monthly	30	$3,105	$3,105
TX	LAR	30	Monthly	30	$9,780	$9,780
TX	LAR	30	Monthly	30	$9,690	$9,690
TX	LAR	30	Monthly	30	$6,450	$6,450
TX	LAR	30	Monthly	30	$9,700	$9,700
VA	LAR	30	Monthly	30	$9,744	$9,744
VA	LAR	30	Monthly	30	$5,127	$5,127
VA	LAR	30	Monthly	30	$3,047	$3,047
WA	LAR	30	Monthly	30	$3,658	$3,658
WA	LAR	30	Monthly	30	$2,134	$2,134
WA	LAR	30	Monthly	30	$5,925	$5,925
CA	LAR	40	2 weeks	80	$3,452	$6,904
IL	LAR	40	21 days	60	$2,644	$7,050
MA	LAR	40	21 days	60	$14,534	$19,378
MI	LAR	40	Monthly	40	$5,280	$5,280
NE	LAR	40	Monthly	40	$4,900	$4,900
NY	LAR	40	Monthly	40	$3,548	$3,548
OH	LAR	40	21 days	60	$8,190	$8,190
OH	LAR	40	Monthly	40	$6,235	$6,235
MI	LAR	50	Monthly	50	$7,500	$7,500
OR	LAR	50	Monthly	50	$4,573	$4,573
CA	Pump	60	Monthly	60	$4,812	$4,812
CT	LAR	60	21 days	80	$2,230	$6,370
IN	Pump	60	Monthly	60	$8,000	$8,000
OH	Pump	60	Monthly	60	$10,189	$10,189
PA	LAR	60	21 days	80	$6,040	$8,530
VA	Pump	60	Monthly	60	$2,600	$2,600
VA	Aqueous	60	Monthly	60	$6,900	$6,900
NC	Pump	65	Monthly	65	$981	$12,757