Health and Medical News and Resources

General interest items edited by Janice Flahiff

[Newspaper article] An effective eye drug is available for $50. But many doctors choose a $2,000 alternative.

From the 7 December 2013 Washington Post article

By  and , Published: December 7

The two drugs have been declared equivalently miraculous. Tested side by side in six major trials, both prevent blindness in a common old-age affliction. Biologically, they are cousins. They’re even made by the same company.

But one holds a clear price advantage.

Avastin costs about $50 per injection.

Lucentis costs about $2,000 per injection.

Doctors choose the more expensive drug more than half a million times every year, a choice that costs the Medicare program, the largest single customer, an extra $1 billion or more annually.

Spending that much may make little sense for a country burdened by ever-
rising health bills, but as is often the case in American health care, there is a certain economic logic: Doctors and drugmakers profit when more-costly treatments are adopted.

Genentech, a division of the Roche Group, makes both products but reaps far more profit when it sells the more expensive drug. Although Lucentis is about 40 times as expensive as Avastin to buy, the cost of producing the two drugs is similar, according to scientists familiar with the drugs and the industry.

Doctors, meanwhile, may benefit when they choose the more expensive drug. Under Medicare repayment rules for drugs given by physicians, they are reimbursed for the average price of the drug plus 6 percent. That means a drug with a higher price may be easier to sell to doctors than a cheaper one. In addition, Genentech offers rebates to doctors who use large volumes of the more expensive drug.

The rising cost of U.S. entitlement programs such as Medicare has prompted outrage in Congress, but it is Congress that has made it difficult in this case and others for Medicare to limit such expenses.

To begin with, the Medicare agency is blocked from seeking better drug prices by negotiating directly with the drug companies, as health agencies in other countries do. Authorities in Britain, for example, have negotiated a price of about $1,100 per dose of Lucentis, and in the Netherlands a dose sells for about $1,300.

Moreover, in cases in which two equivalent options are available, such as Lucentis and Avastin, Medicare is forbidden from restricting payment to the amount of the less costly alternative. After it sought to do so in 2009, a federal appeals court said it lacked that authority.

It’s often difficult, of course, to know when two drugs are equivalent. When the debate over the two drugs and their pricing erupted more than six years ago, Genentech asserted that its more expensive new drug was superior. At the time, it was hard to show otherwise. No one had tested them in side-by-side comparisons.

Since then, the six randomized clinical trials involving more than 3,000 patients have found the drugs to be largely equivalent.

Yet in 2012, the Medicare program and its beneficiaries spent $1.2 billion on Lucentis, according to The Post’s analysis of Medicare data.

Medicare officials said they have no choice but to pay the bill when a doctor prefers to use Lucentis.

 

Read the entire article here

 

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December 10, 2013 - Posted by | health care | , , , ,

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