GLG News by Mark Packer, MD

Implications: The Visian ICL (Implantable Collamer Lens) is an exquisitely precise technology for the correction of high degrees of nearsightedness -- much higher than the reach of laser refractive surgery such as LASIK and PRK.  Given the price of the ICL and the intraocular surgey required for its implantation, the out-of-pocket expense for the patient is about US$4000 per eye (about double the average LASIK).  In general, if patients are candidates for LASIK they will have LASIK; it is only those who cannot have LASIK because of their extreme nearsightedness who opt for the ICL.  LASIK works extremely well in the low to moderate nearsightedness range, and it corrects astigmatism as well (there is a toric ICL, but it is not yet approved in the United States). 

Analysis: It is unlikely that the ICL will take significant market share from LASIK because it is twice as expensive and not demonstrably better in the low to moderate range of nearsightedness where either would work well.  However, it does represent an elegant solution for the very nearsighted who, in my experience, are extremely satisfied with the results.  As an addition to a company's refractive portfolio it would represent a clear winner, not as a replacement for LASIK but as an extension of the spectrum of refractive correction.

Implications: "He who pays the fiddler calls the tune."  Here's an example of the fiddler pro-actively asking the guy in the room with the deepest pocket what he'd like to hear.  If it's not something in the current repertoire, the fiddler seems willing to learn.  However, by the time he's got the new song by heart the guy with the deep pocket may have moved on to another venue.  Will the new tune please the crowd that remains?

Analysis: In today's regulatory environment it certainly makes sense for industry to speak early and often with government about the pathway to approval for a new drug or device.  It also makes sense for industry to communicate clearly with scientists and doctors about unmet needs.  However, seeking the opinion of payors about their therapeutic priorities is a risky proposition.

Ultimately, the value of an innovative therapy will be determined by its success in treating disease.  That success remains uncertain until the clinical investigation is complete and the first patients -- and their physicians -- can tell us how they're doing.  Bringing the third party -- government and commercial insurers -- into the game before the opening bell is putting the cart before the horse.  Good luck pulling it into the station.

Implications: The media reporting on the FDA hearings on LASIK has generally highlighted unhappy patients' stories and the comments of FDA officials and panel members.  However, The Washington Post's Lauran Neergard has written an insightful article that foresees an important future trend in refractive surgery.  She correctly notes that the key to a successful outcome is finding a surgeon who does not have a "favorite" procedure and instead is "qualified to evaluate patients for all of the options."   Equating refractive surgery with LASIK (or laser vision correction in general) unfairly limits a field which includes Refractive Lens Exchange and Phakic Refractive Lenses as well as inicisional techniques, corneal implants and other investigational modalities.  Given the increased doubt engendered by media attention to LASIK, patients who nevertheless seek freedom from glasses will turn to trusted surgeons who perform a range of procedures and can tailor the surgery to fit the patient's desires.  

Analysis: The desire to achieve independence from glasses and contact lenses is the starting point in the decision to have refractive surgery.  The means to achieving that goal vary with the patient's age, refractive error and lifestyle.  Patients in the presbyopia age range (over 45) may be better suited by Refractive Lens Exchange with a multifocal or accommodating intraocular lens (e.g., ReZoom from AMO, ReStor from Alcon or crystalens from eyeonics/B & L).  New technology likely reaching approval in the next 1 - 2 years includes the Tecnis Multifocal (AMO) and the Synchrony (Visiogen).  When these new devices come to market there will very likely be an upswing in the adoption of these procedures.  

Implications: Presbyopia correcting IOLs currently represent 5% of all IOLs implanted in the United States (about 3.5 million per year).  The products available in this category include the ReSTOR multifocal IOL (Alcon), the ReZoom multifocal IOL (AMO) and the cyrstalens accommodative IOL (eyeonics).  Although the market share is small, some experienced surgeons may implant these in up to 30 - 40% of their patients.  Furthermore, these IOLs are priced at five and a half times the average of a standard IOL ($850 versus $150), so they represent a significant source of revenue.  In addition, surgeons and facilities may charge patients out-of-pocket for services associated with the implantation of these lenses at the time of cataract surgery.  Understanding the characteristics of each type of implant will help both industry and doctors to better position these alternative products.

Analysis: The first multifocal IOL became available in the United States ten years ago, the AMO Array.  Experience surgeons gained with that lens has enabled us to rapidly adopt the newer IOLs that have been introduced over the last 4 years.  In the coming year we expect eyeonics to present data on its new design, the HD-100, and the approval of the Synchrony dual optic accommodative IOL (Visiogen) as well as the Tecnis Multifocal IOL (AMO).  Each of these produces represents further refinement and improvement.  I expect to see increased market for the entire group of presbyopia correcting lenses in the wake of these approvals.   

Implications: Rather than getting gobbled up by one of the big three players in Ophthalmology (B & L, Alcon and AMO), eyeonics is looking to go it alone into the public arena.  The crystalens remains the only approved accommodative intraocular lens, but faces strong competition from the multifocals.  Although it is generally agreed that quality of vision is better with the crystalens because the multifocals produce halos around lights at night, the ability to read and drive without glasses is achieved by a larger percentage of subjects who have binocular implantation of multifocal IOLs.  Apparently none of the big three made the decision to acquire eyeonics (it had been widely circulated that the company was looking for someone).  With the launch of the crystalens 5-0 (a larger optic with reportedly better results) and the resurgence of interest in the company demonstrated at the ASCRS meeting earlier this year, there probably was not going to be a better time for eyeonics to take the leap. 

Analysis:  The adoption of multifocal and accommodative IOLs has in general been slow for many reasons, including the additional cost to patients and the higher standards for surgeons who seek to deliver freedom from glasses to their cataract patients.  Eyeonics's IPO will, I think, help to strengthen this market by showing the determination and perseverance of this company which started the ball rolling in 2003 with FDA approval of the crystalens.  The next IOLs in the pipeline which will also serve to increase interest and market share for presbyopia correcting IOLs include the Tecnis multifocal from AMO and the Synchrony, a dual optic accommodative IOL, from Visiogen.  Visiogen in particular must be watching with interest to see how eyeonics fares with its IPO.

Implications: Alcon has suffered with its LADARVision system recalls and lawsuits, and has looked particularly troubled following AMO's acquisition of VISX.  Although AMO/VISX remains the market leader for refractive correction, the Allegretto represents new technology with potential advantages in terms of accuracy and speed.  Moving forward with this opportunity shows that Alcon is serious about offering a complete refractive solution, which has great significance for the presbyopia-correcting and refractive pseudophakic lens business (Toric, ReStor). 

Analysis: The projected growth in surgical ophthalmology centers around the demographic bulge of baby boomers who desire spectacle freedom.  These people need correction of presbyopia as well as their other refractive errors, and the best solution to date for them is pseudophakic IOL implantation -- multifocal or accomodative.  However, surgeons implanting these lenses need the ability to perform enhancement procedures, usually in the form of LASIK or PRK, to treat residual astigmatism, myopia or hyperopia.  The acquisition of Allegretto means that Alcon can offer an outstanding laser vision correction product to its ReStor surgeons.

Implications: Currently the ophthalmic device market is organized into an oligopoly including Alcon, AMO and Bausch.  AMO has shown fairly dramatic growth with its acquisition of VISX, Intralase and Wavefront Sciences.  However, AMO's potential acquisition of Bausch is on a grander scale.  There are multiple areas in which these two companies currently compete, including phacoemuslfication systems, viscoelastics and intraocular lenses on the cataract side, excimer laser technology on the refractive side (VISX with WaveScan v Technolas with Zyoptix, Intralase v Hansatome), and contact lenses and solutions on the vision side.  The open question for us to ponder is what will happen to these competing technologies if they are all under one roof.  There are also important areas unique to Bausch, for example, pharmaceuticals and surgical instruments (Storz).  Keeping these within AMO could significantly change the profile of the company. 

Analysis: Diversity and competition tend to favor innovation.  In the world of ophthalmic devices we have become accustomed to innovation occurring primarily in start up companies (such as eyeonics, Visiogen, AcuFocus and Intralase) and eventually being acquired by the big three (if it shows promise).  If the big three become the big two it is possible that innovation will suffer.  On the other hand, AMO has shown itself to be supportive of innovation with its acquisitions while Bausch has seemed uncertain at times about its direction.  For example, Bausch acquired the Sarfarazi elliptical accommodating IOL several years ago but did not more forward with it, allowing Visiogen to initiate clinical trials of the first dual optic accommodative IOL.  The same could be said of Catarex, the vortex phacoemulsification system that showed promise for cataract extraction through a tiny 1 mm capsulorhexis (thus facilitating injection of a polymer into the capsular bag).  Meanwhile, Bausch's new phacoemulsification system, Stellaris, announed with much fanfare at last year's ESCRS meeting in London, has yet to materialize.  More recently, however, Bausch acquired an option to buy AcuFocus, the intracorneal ring for presbyopia correction.  Clinical trials outside the US have shown promise, and some key opinion leaders such as Dick Lindstrom and Jack Holladay have been vocal about it success.  One potential area of synergy between AMO and Bausch in fact relates to AcuFocus: Intralase is recommended for flap construction prior to placement of the ring.  Here at least is one area where the technologies of the two companies are truly complementary. 

Overall, I am sanguine about the potential for positive growth and development of Bausch's technology under AMO.  Nevertheless, there are plenty of reasons for surgeons to feel anxious about the loss of one of our big three.

Implications: The Center for Medicare and Medicaid Services (CMS) has ruled that beneficiaries may pay out of pocket for additional non-covered services related to presbyopia and astigmatism correcting intraocular lenses (IOLs) that are provided by surgeons and facilities (such as Ambulatory Surgery Centers and Hospital Out Patient Departments). The reasoning behind this ruling includes the logic that these IOLs serve the same function as eyeglasses but are not eyeglasses and therefore are not a covered service.

Surgeons may worry about the specific inclusion and exclusion criteria of these "non-covered services." One clear part of the service is the cost of the IOL itself. The crystalens, ReZoom and ReStor IOLs are priced around $850, well above the $150 generally allowed by CMS. The AcrySof Toric IOL is priced around $600. However, there is also testing and monitoring related specifically to the refractive aspects of these devices, and determining the value of these services is up to the provider. As Alan Reider notes, it is easy to imagine a case of misunderstanding between patient and surgeon ending up in litigation.

Analysis: Penetration of presbyopia IOLs in the US market has generally been less than expected. There are several important reasons for this slow adoption. The first is the change in practice management necessary to allow the additional time and counseling necessary to explain both the technology and the rules surrounding its use to each prospective cataract patient. This requires a commitment to patient education on the part of the surgeon and staff.

The second important reason is the investment in diagnostic technology necessary to produce the outcome that patients expect, i.e., freedom from bifocals. The correction must eliminate nearsightedness, farsightedness, astigmatism and presbyopia. The IOL power selection and the correction of astigmatism require state-of-the-art measurement devices (IOL Master, Immersion Ultrasound, Corneal Topography) and flawless surgical technique (cataract extraction, IOL insertion, limbal relaxing incisions).

Third, the surgeon and facility must have a plan for enhancement procedures (e.g., LASIK) to correct residual refractive errors after surgery. Even the best centers boast about a 5% enhancement rate; some surgeons describe enhancement procedures in 20% of patients. For surgeons who are only so far doing cataract surgery and who do not have access to an excimer laser, the enhancement procedure becomes problematic.

The added legal burden that Alan Reider describes can only add to surgeons' natural conservatism when it comes to trying something new. Nevertheless, in the 5 - 10 year outlook, presbyopia correction remains the cornerstone of any successful business plan for cataract and refractive lens surgery. As CMS reimbursement continues to decline surgeons will be forced to either retire/change professions, accept a significantly reduced life style in comparison to what they feel they deserve based on years of training, expertise and the intrinsic value of the services they provide, or begin accepting fee for service from grateful client/patients who no longer rely on glasses to drive, use a laptop or read the newspaper. What would you choose?