Medicare code favors costly Lucentis use

It's been awhile since we talked about the Genetech eye drug Lucentis and its off-label rival Avastin, which is also from Genentech. As you know, there was quite a dustup some time ago when the company--now owned by Roche--tried to restrict Avastin distribution to curtail that off-label eye use. And many ophthalmologists had been relying on Avastin as a much-lower-cost treatment for wet macular degeneration, rather than using the pricey Lucentis. They complained; the company backed off, at least a bit.

Now, Medicare has introduced a special reimbursement code for Avastin as an eye drug. That might seem to institutionalize its use, making it easier for doctors and patients to get ahold of. Not so. According to the New York Times, that code leads to a Medicare reimbursement of about $7.20 for a dose of Avastin for the eye. That's way less than the $2,000-per-injection price for Lucentis. But it's also less than the cost of Avastin for an eye-sized dose, which is about $30 to $50 per injection.

The upshot is that eye doctors aren't likely to give patients Avastin for WMD anymore, because they'd lose money. They buy Avastin up front, then charge when it's administered. If you're charging a third of what you pay, that's a big money-loser. So those docs will have an incentive to switch to Lucentis, which wouldn't cost them anything--because they'll be reimbursed in full--but would cost the government thousands more per patient, hundreds of millions all together. Individual patients are likely to pay more, too, because the 20 percent co-pay for Lucentis runs about $400.

Ophthalmologists are negotiating with Medicare as we speak in hopes of getting the reimbursement level changed.

- read the NYT story