Prior to 2003, Medicare paid for cancer chemotherapy injectables based on the average wholesale price. But with no transparency, some distributors or physicians could reap huge profits. To combat this, and with the best of intentions, a new system was developed as part of the Medicare Modernization Act of 2003, based instead on the average selling (retail) price, updated quarterly. Oncologists, who purchase the drugs from distributors and then administer them, are reimbursed the average selling price, plus a 6 percent administrative fee. This would at first glance seem perfectly reasonable. Not quite. In effect, it means that Medicare allows a maximum of only a 6 percent increase per year; any more, and the reimbursement would be less than the cost.