Genentech to Limit Avastin Availability

Like most retina specialists, I am extremely disappointed in Genentech's decisions to limit Avastin availability, thereby costing taxpayers billions of dollars for what is likely an equivalent treatment for macular degeneration.

In addition, avastin is used for many other retinal conditions, such as diabetic retinopathy, for which Lucentis is not approved and for which insurance companies won't pay. It will be pretty difficult to now ask patients to pay 2000 dollars for a shot of Lucentis to avoid placement of 2000 spots of laser for diabetic retinopathy...

This decision by Genentech is exactly what economic theory would predict in an environment in which the largest purchaser of medication, i.e. medicare, has no pricing control (the anti-Walmart approach) whilst physicians fees are controlled by the government. (I was very disappointed that the Medicare D initiative didn't include some sort of price controls). Of course any drug company, whether Genentech, Novartis (with Visudyne) etc...will see what they can get away with in terms of pricing. Their primary concern is profit, not the budget deficit or the increased cost to taxpayers in an economy that is already on the verge of a serious recession. Since the connection between charging tax payers more to pay for these meds and the pricing of individual meds is separated by so many degrees, most tax payers will not revolt so the reasoning goes.

The only thing big pharma has to do is to figure out how to deal with patients who don't have a secondary insurance as medicare will only pay 80% of the cost, leaving the patients with a 400$ copay per month for Lucentis. In a flash of brilliance, big pharma trots out a program, with much grandstanding, that will provide financial aid to such patients. Of course no one knows how many patients will actually get any financial aid. Of course, the overstressed doctor's office will have no trouble filling out the reams of paperwork for each patient who will need such financial assistance...

The split between pharma and retina specialists started when Novartis broke all pricing barriers in charging 1200$ per visudyne treatment every 3 months (doctor gets about 100$ per treatment). Now Genentech even more brazenly not only about doubles the cost, but gets to charge this 2000$ every month! (Doctor still gets about 100$ to administer drug).

It is hard to remain an idealist while working in the midst of such greed and lack of shame in the world of big pharma...

Genentech Inc. said it will stop making its cancer drug Avastin available to certain pharmacies in a bid to curb its use in treating eye disease -- which has cut into sales of the company's high-priced eye drug.

(..)

Compounding pharmacies, which are licensed to mix and repackage drugs, put Avastin into syringes that contain a once-monthly dose of the drug for use in the eye and cost about $40. A once-monthly dose of Lucentis costs about $2,000.

Medicare, which offers health coverage for the elderly and disabled and is a big purchaser of the two drugs, has said curbing Avastin could cost taxpayers $1 billion to $3 billion a year. Using a cheaper drug not only would preserve Medicare funds, but would trim beneficiaries' exposure to high co-payments, program administrators say.

The question of the drugs' equivalence may be decided in a study sponsored by the National Institutes of Health. Genentech has refused to support the head-to-head study, nor to provide the two drugs at cost, reasoning it already has invested seven years of research and development in validating Lucentis as safe and effective.

Battle lines over usage pit retinal specialists -- many of whom have opted to prescribe Avastin -- against the company and its backers, who say recovering profits is necessary to preserve the U.S. edge in health-care innovation.
(Interestingly retina specialists get no kudos from the government for saving medicare billions of dollars annually).