Summary
This article describes the perspective of a retinal specialist on the Avastin/Lucentis controversy. In mid-February the National Institutes of Health announced that it would conduct a head to head trial comparing the effectiveness of Lucentis and Avastin for the treatment of wet age related macular degeneration. Both drugs are made by Genentech, but only Lucentis is FDA-approved. In their current dosing regimens, the cost of treatment with Avastin is only between 1-3% of the cost of Lucentis. Current projections suggest that the cost to treat the half million patients in the U.S. with wet macular degeneration is greater than $10 billion per year. $10 billion is more than the entire Medicare budge for all of ophthalmology.t
Analysis
Because most macular degeneration patients are over 65, any pricing changes in medications in likely to have a major impact on Medicare. Moreover, anything that impacts the Medicare ophthalmology budget is likely to affect reimbursment for the other major procedures in ophthalmology such as cataract surgery. Already, Medicare reimbursement for cataract surgery is below $700. Any further reduction may begin to affect procedure volumes which have been growing at 7-8% per year.
The results of the Avastin/Lucentis trial will probably be available in early to mid 2008. While many expect Avastin to be equally effective, how these drugs are priced will ultimately have a major impact on the Medicare budget. Genentech may be forced to lower their prices for Lucentis or change how Avastin is currently provided to pharmacies. Either way, the Medicare ophthalmology budget is in for a rough ride. And that rough ride will certainly impact reimbursement for other eye-related procedures and potentially eye procedure volumes.
