A patient in your average doctor’s office, Ms. Myers, has rheumatoid arthritis. Her physician, Dr. Jones, administers an injectable immunotherapy drug, Remicade, as her treatment. Medicare pays Dr. Jones 106 percent of the average sales price (ASP) for the drug, which comes to more than $3,000 every two months. The extra six percent is supposed to cover the drug’s ordering, tracking, storing, and processing, as well as to account for the variation in prices that drug companies charge different doctors.
Commission-type arrangements might sound like something you’d only see for sales positions-especially in the retail or automotive industries, where many companies pay sales personnel a percentage of sales in order to incentivize greater sales volumes and sales of higher priced items.