Once when I was a kid going out to dinner with my family, my parents gave me the check along with money to pay at the cash register. The cashier made a mistake and gave me an extra dollar in change. When I went back to the table and showed this to my parents they were horrified that I would think of keeping the dollar. They made me go pay it back and gave me a clear moral message about where they stood.
Payers should take a similar view when they think of substituting Avastin for Lucentis. Avastin is a highly-effective anti-cancer drug. Lucentis is basically the same drug, but it’s indicated for an ophthalmic condition: wet age-related macular degeneration. Since Lucentis is injected in the eye only a little bit is needed. Some enterprising doctors and pharmacists figured out they could split up one Avastin dose into lots of Lucentis doses. Instead of $2000 or so for a Lucentis treatment they have an Avastin equivalent for as little as $20.
The UK has decided not to pay for Lucentis. An unstated reason is that it will encourage the use of Avastin instead. A similar situation is playing out in the US. From the Wall Street Journal (U.K. Deals Blow to Roche, Novartis)
Lucentis could face fresh pressure in the U.S., where a study, sponsored by the U.S. National Eye Institute, compares the efficacy of Lucentis to that of Roche’s Avastin in a 1,200 patient trial, results of which will be published this spring.
Experts expect the study to show that both drugs are equally effective in treating advanced age-related macular degeneration, a condition that affects millions of Americans. Depending on the outcome of the trial, analysts fear that in a worst-case scenario U.S. regulators could back Avastin to treat eye diseases and that insurers could stop reimbursing the drug.
Everyone seems to be excited about getting such a bargain. But to me it’s a lot like the restaurant situation. Something isn’t quite right about paying $50 for a valuable, novel treatment that should cost more. Maybe you think my comparison to the restaurant example is a stretch –and I’ll admit it’s not a perfect analogy. Still, Genentech deserves to be paid more for this breakthrough.
So if you’re not compelled by the moral logic, consider this. Now that the world has decided that the price point for a wet AMD treatment is $20 or so who is going to bother developing a new treatment for wet AMD? I’ve already seen situations where companies chose to drop development of early stage compounds in this therapeutic area because they are afraid they can’t make money.March 4, 2011