Sunday, December 08, 2013

Big Pharma in action

Genentech, a division of Roche Group, makes two drugs that have been proven to help those with wet age-related macular degeneration. One, Avastin, is used "off-label", the other, Lucentis, is specifically for macular degeneration. Genentech works hard to convince ophthalmologists to use Lucentis. The company thinks Avastin is fine for colorectal cancer, but not for macular degeneration. That may be because Avastin costs about $50 per injection,while Lucentis costs about $2,000 per injection. Both drugs have been deemed to produce the same results as shown in six major trials.

While the majority (61%) of doctors prefer to use Avastin, Lucentis is used enough times that it costs us - via Medicare - $1.2 billion a year. Some doctors think the risk of the repackaging of Avastin to make it useful for the eye is too great. However, one should keep in mind that doctors are reimbursed for the average price of the drug plus 6 percent. And 6% of $2000 is a lot more than 6% of $50.

Medicare is helpless in making doctors use the less costly drug. It can't negotiate 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. Nor can it restrict payment to the amount of the less costly alternative.  

Perchance, Congress has limited Medicare in such ways because over the past 15 years, the pharmaceutical industry has far outstripped any other in the money it has devoted to lobbying, according to data from the Center for Responsive Politics. Drug companies spent a total of $2.7 billion over that time.

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