The Health Business Blog is taking a break this week, and re-running some posts from August 2008. If you’d like to comment, please do so on the original post.
Regular readers remember last year’s Avastin/Lucentis debate here on the Health Business Blog. To recap: the drugs are essentially the same and they’re made by the same company. Avastin is a cancer drug and Lucentis is used in the eye. Compounding pharmacists found a way to repackage Avastin into the much smaller dosages for ophthalmic use, thus making an ~$60-80 Avastin equivalent to a ~$2000 Lucentis dose. The manufacturer, Genentech, found itself caught in the middle.
In my view, drugs should be priced based on value, not dosage. Genentech deserves a lot more than $80 for an effective treatment for macular degeneration.
There are contrasting views on this topic on the two sides of the Atlantic, but the perspectives may surprise you.
- Here’s the UK view from today’s Wall Street Journal (Panel Backs Covering Eye Treatment in U.K.):
Britain’s National Institute for Health and Clinical Excellence, which is known for its tough stance on expensive drugs, recommended the drug be freely available to U.K. residents, with the country’s National Health Service paying for 14 injections of the drug in each eye…
“Lucentis is an expensive drug, costing more than £10,000 ($18,386) for each eye treated,” Andrew Dillon, chief executive of the National Institute for Health and Clinical Excellence, said in a statement. “But that cost needs to be balanced against the likely cost savings. It has been estimated that the costs related to sight impairment for patients treated with Lucentis are around £8,000 cheaper than for patients who receive best supportive care over a 10 year period,” he said.
- Meanwhile in the US, today’s Boston Globe (Study of 2 drugs places spotlight on Genentech) puts Genentech on the hotseat, blaming the company for its understandable reluctance to contribute funding to an Avastin v. Lucentis study for macular degeneration and predicting that Medicare will refuse to pay more for Lucentis:
What does a company do when there’s anecdotal evidence two of its drugs are equally effective in treating a leading cause of blindness in the elderly – one costing patients $60 per treatment and the other $2,000?
In the case of Genentech Inc., nothing.
The company declined to seek federal approval for the cheaper drug, Avastin, to treat the wet form of age-related macular degeneration. Nor would it help finance a National Eye Institute study comparing the effectiveness and safety of Avastin, a cancer drug, and the more expensive eye drug, Lucentis.
The Globe also predicts that Medicare will refuse to pay more for Lucentis:
An internal memorandum from congressional aides to the Senate Aging Committee’s chairman, Herb Kohl, Democrat of Wisconsin, recommends that lawmakers consider urging Medicare officials to pay no more for one drug than the other when it comes to treating the eye disease.
Medicare’s contractors already have authority to pay the same amount for items that achieve much the same result – such as hormones used to treat prostate cancer.
If the drugs are shown to work comparably, “it would surprise me if the contractors did not quickly use that concept,” said Dr. Steve Phurrough, director of coverage and analysis at the Centers for Medicare and Medicaid Services.
This is a complicated topic. I’m sympathetic to patients, physicians and payers who want access to low-cost, effective treatments. But Genentech deserves to earn a return on its investment from this impressive drug. I also know for a fact that the beating Genentech is taking on Lucentis is discouraging development of new treatments for macular degeneration.