For AMD, Off-Label Avastin Cheaper Than On-Label Lucentis

Laurie Barclay, MD

April 27, 2012

April 27, 2012 — Ophthalmologists often use bevacizumab (Avastin, Genentech) off-label to treat wet age-related macular degeneration (AMD) in part because of lower cost compared with on-label use of ranibizumab (Lucentis, Genentech). However, there is no national Medicare payment amount for Avastin when the drug is used to treat wet AMD in the office setting, according to a study of payments for wet AMD drugs issued April 23 by the Office of the Inspector General (OIG), Department of Health and Human Services.

"[W]e found that the majority of physicians who administered Avastin to treat wet AMD reported the substantial cost difference compared to Lucentis as a primary factor in their decision," OIG Inspector General Daniel R. Levinson told Medscape Medical News in an email interview. "We recommend that CMS [Center for Medicare & Medicaid Services]: (1) Establish a national payment code for Avastin when used for the treatment of wet AMD and (2) Educate providers about the clinical and payment issues related to Lucentis and Avastin. CMS did not concur with our first recommendation at this time but did concur with our second recommendation."

In the United States wet AMD affects millions of people and is a leading cause of visual loss in persons at least 60 years of age. The US Food and Drug Administration (FDA) approved Lucentis (Genentech) in 2006 to treat wet AMD, and Medicare Part B covers the drug for this condition. Yet, many physicians prefer the off-label use of a small dose of Avastin to treat wet AMD, in part because it is much less expensive than Lucentis. In 2011, drug costs for a single intravitreal injection were about $1950 for Lucentis, compared with $50 for Avastin.

Currently Medicare Part B covers Avastin to treat various forms of cancer, as approved by the FDA, but does not have a national Medicare payment amount for Avastin in the ophthalmology setting. Combined Part B expenditures for Lucentis and Avastin approached $2 billion in 2010.

To understand when and why physicians opt for Avastin over Lucentis for the treatment of wet AMD, the OIG surveyed 2 groups of ophthalmologists randomly selected from Medicare claims data. The first sample consisted of 160 physicians who received Medicare payment for Lucentis, and the second sample consisted of 160 physicians who received Medicare payment for Avastin.

Survey participants answered questions regarding the total dollar amount and quantity of Lucentis and Avastin purchased in the first quarter of 2010. In addition, participants reported on the factors affecting their decision to use Avastin rather than Lucentis to treat wet AMD.

OIG investigators compared physician acquisition costs with Medicare payment amounts reported by CMS and Medicare contractors, and they examined Medicare contractor payment policies and the reasons cited by physicians for choosing Avastin over Lucentis.

"The strength of this study is the relatively large number of physicians who participated and the access of OIG to CMS payment information," George A. Williams, MD, clinical correspondent from the American Academy of Ophthalmology (AAO), told Medscape Medical News in an email interview when asked for independent comment.

A study limitation noted by the OIG is the reliance on physicians' and contractors' self-reported data.

Study Findings

In the first quarter of 2010, physician acquisition costs for Lucentis were 5% below the Medicare payment amount. On average, physicians paid $1928 (net of discounts) per vial of Lucentis.

"The study confirms that for Lucentis the current policy of reimbursement at average sales price plus 6% is working as designed," Dr. Williams said.

In contrast, physician acquisition costs for Avastin were 53% below the Medicare payment amount during the same time period. Physicians paid an average of $26 per dose of Avastin (including drug and compounding costs), whereas the average Medicare contractor payment amount was $55 per dose. However, these acquisition costs were nearly 4 times the national payment amount CMS had proposed and then rescinded in the fourth quarter of 2009.

"The study also confirms the position of the [AAO] that the 2009 proposal to establish a new HCPCS [Healthcare Common Procedure Coding System] code for Avastin in neovascular AMD payable at $7.185 per dose did not cover physicians' acquisition costs, and that the CMS decision to rescind that policy was appropriate," Dr. Williams said.

Despite the similarity in payment policies used by the Medicare contractor in each jurisdiction, Medicare contractors' payment for Avastin when the drug was used to treat wet AMD varied up to 28%.

"[T]he study demonstrates variations in payment policy among the 11 Medicare carriers," Dr. Williams said. "This is to be expected whenever there is no national payment policy."

Most physicians who administered Avastin to treat wet AMD reported that a key reason for their choice was the substantial cost difference compared to Lucentis.

On the basis of their findings, the OIG recommended that CMS establish a national payment code for Avastin when the drug is used to treat wet AMD and that they educate clinicians concerning clinical and payment issues associated with use of Lucentis and Avastin. However, CMS has declined, thus far, to set a national payment code.

"We acknowledge that the previous attempt to establish a national payment code and amount for the intraocular use of Avastin in physicians' offices raised concerns over beneficiary access and that the unique circumstances surrounding the acquisition and administration of the drug would need to be considered when setting a payment amount," the OIG report states. "However, given the lack of a national payment policy, the substantial cost difference between these two drugs, and the existence of a unique payment code and amount for intraocular doses of Avastin in the hospital outpatient setting, we continue to believe that CMS should establish a national payment code and amount for Avastin when administered in a physician's office that takes all of these factors into account."

Clinical Implications

In his own practice, Dr. Williams and each patient make the decision regarding which drug to use after discussing the comparative safety and efficacy of Lucentis, Avastin, and, more recently, Eylea (Regeneron Pharmaceuticals Inc).

"I discuss the cost of each drug, insurance coverage, the issue of a 20% co-payment and the FDA approval status," he said. "In light of the recent reports on contaminated and counterfeit Avastin, I explain the compounding process and where my practice obtains Avastin. I then ask the patient to decide what drug is most appropriate for their situation, [as] I am comfortable using all three drugs."

Preliminary results from the first year of the Comparison of AMD Treatment Trial (CATT) released in April 2011 showed that Avastin was as effective as Lucentis in treating wet AMD and that both drugs could be administered effectively at longer intervals than the usual once-monthly schedule. Hospitalizations and other serious adverse events occurred in 24% of patients receiving Avastin and in 19% of patients receiving Lucentis.

Next week, 2-year results from CATT will be reported.

"This information is critical to an improved understanding of the long term safety and efficacy of both Lucentis and Avastin," Dr. Williams said. "A similar comparative effectiveness trial involving Eylea would be useful. Research involving new dosing strategies and technologies to diminish the treatment burden by decreasing or even eliminating the number of intravitreal injections should continue."

"There is no problem with a national payment code as long as the reimbursement covers physicians' costs," Dr. Williams concluded. "However, it may be difficult for CMS to accurately determine these costs due to the compounding process."

Dr. Williams has disclosed no relevant financial relationships.

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