Kohl probes Medicare pay switch on Genentech drugs
WASHINGTON — A Democratic senator says a shift in Medicare policy would encourage doctors to use an eye drug that costs thousands of dollars, over a similar treatment that costs just $50.
The change would benefit drugmaker Genentech, which makes both drugs, but insists the more expensive one is better for patients. Eye doctors say the more expensive drug offers few benefits to older patients.
For several years, doctors have used Genentech’s cheaper drug Avastin to treat the leading cause of blindness in seniors, although it is not technically approved for eye care.
That practice will likely change under a new Medicare policy which slashes reimbursement for Avastin to $7 from about $50, making it difficult to recoup the cost of the drug, according to doctors.
Medicare would continue reimbursing Lucentis at its full cost, about $2,000 per injection, making it the more attractive option for physicians.
Sen. Herb Kohl, D-Wis., who chairs the Senate Committee on Aging, contends the policy will force doctors to switch to Lucentis, which is formally approved for eye care.
The payment change “will make reimbursements for Avastin even more difficult and less attractive to the many physicians and eye surgeons who wish to use it for their patients as a much more affordable treatment,” Kohl wrote to Medicare officials in an Oct. 9 letter obtained Tuesday by The Associated Press.
Kohl demanded an explanation for the change and questions whether “Genentech communicated directly” with officials about the policy.
Because drugs like Avastin and Genentech are bought exclusively by physicians — who inject them into patients in the office — the issue would not directly impact consumer costs.
A spokeswoman for South San Francisco-based Genentech said the company has not discussed the issue with the Centers for Medicare and Medicaid Services, which administers Medicare benefits.
“We cannot speculate on the CMS decision to implement a new code as we had no involvement in that decision,” said Megan Pace. Genentech is a unit of Swiss drug giant Roche.
CMS spokeswoman Ellen Griffith said agency staff are “reviewing the letter and look forward to responding to the senator.”
Eye care specialists said the decision would force them to use an expensive drug, driving up the government’s costs.
“Why would CMS make a decision that could cost them half-a-billion a year minimum?” asked Dr. Philip Rosenfeld, a professor at the Bascom Palmer Eye Institute in Miami.
Rosenfeld said the new payment system does not take into account the extra cost of repackaging Avastin into tiny doses, known as compounding. That function is performed by specialized compounding pharmacists, who pass on the extra fee to eye doctors.
For their part, Medicare officials say they are not legally permitted to pay for pharmacist costs and the new payment system reflects that policy.
Genentech points out that Lucentis is formulated with smaller molecules than Avastin to better treat wet, macular degeneration, the leading cause of blindness in seniors. The condition causes blood vessels in the eye to leak fluid, damaging patients’ vision.
However, many eye doctors say there is no detectable difference in outcomes for patients. The American Academy of Ophthalmologists estimates 50 percent of all injections for macular degeneration use Avastin.
Food and Drug Administration scientists have said the two drugs have a similar safety profile, according to Kohl staffers.
But while Avastin was FDA-approved as a cancer treatment in 2004, Lucentis was specifically studied and approved as a treatment for macular degeneration in 2006.
It’s not unusual for drugs to be used off-label — treating diseases other than ones for which they were approved.
Genentech has previously said Lucentis’ price reflects the cost of developing the drug, which included a clinical trial involving more than 6,000 patients at a cost of more than $45,000 a patient.
The government’s National Eye Institute is conducting a head-to-head study comparing the effectiveness and safety of Avastin to Lucentis, though results aren’t expected until at least 2011.
Genentech has refused to participate in the study, despite the urging of federal scientists.
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