Switch From Lucentis to Avastin Could Save Medicare $18B

Diedtra Henderson

June 17, 2014

Medicare could slash $18 billion in spending over the course of 10 years if physicians treated patients with diabetic macular edema and neovascular age-related macular degeneration with bevacizumab (Avastin, Genentech) instead of ranibizumab (Lucentis, Genentech and Novartis). These figures are based on a modeling study that projected nearly $5 billion in reduced out-of-pocket expenses for patients.

More carefully managing usage of both drugs, which accounted for $2 billion, or roughly one sixth, of the Medicare Part B drug spending in 2010, represents "an easy target" for the cost-conscious federal agency, reasons David Hutton, PhD, assistant professor of Health Management and Policy, University of Michigan, Ann Arbor, and coauthors in an article published in the June issue of Health Affairs.

Diabetic macular edema and wet age-related macular degeneration imperil the vision of more than 2 million Americans. Bevacizumab and ranibizumab are biologics that are injected directly into the eye. These antivascular endothelial growth factor (anti-VEGF) agents slow bleeding and swelling in the retina by thwarting growth of abnormal vessels, Dr. Hutton and coauthors write. Previous research indicates that the 2 medicines have similar efficacy and safety profiles. The biggest difference is a $2023 per dose price tag for ranibizumab, which is approved by the US Food and Drug Administration (FDA) for both ocular conditions, compared with about $55 for a dose of bevacizumab, which lacks federal approval for such uses.

The researchers forecast the incidence and prevalence of diabetes mellitus, neovascular age-related macular degeneration, and clinically significant diabetic macular edema from 2010 to 2020. Then, they modeled future therapeutic use of ranibizumab, which now accounts for one third of prescriptions for wet age-related macular degeneration, and bevacizumab, which accounts for two thirds of the prescriptions.

"CMS will spend $20 billion and patients will spend $5 billion on bevacizumab and ranibizumab over the next decade," Dr. Hutton and colleagues write. "If all patients immediately switched to bevacizumab and continued using it over the ten-year period, CMS spending on these drugs would drop to about $2 billion (savings, $18 billion) over the decade-long period, and patients would spend $420 million (savings, nearly $5 billion)."

Dr. Hutton told Medscape Medical News, "it does seem like low-hanging fruit. It is an area where Medicare and patients could save a lot of money."

Reality is a touch messier than the elegant mathematical models, however.

More than 50% of ophthalmologists already use the cheaper biologic off-label "just because they're renegades and mavericks," Julia A. Haller, MD, ophthalmologist-in-chief at Wills Eye Hospital in Philadelphia, Pennsylvania, tells Medscape Medical News.

Because it is not FDA-approved, for most practices the cheaper biologic has to be made by a compounding pharmacy, an industry Dr. Haller says has "fallen on hard times" in the aftermath of a multistate outbreak of fungal meningitis and other infections among patients who received contaminated preservative-free methylprednisolone acetate solution steroid injections distributed by the New England Compounding Center.

FDA-approved ranibizumab, in contrast, arrives at the clinician's office in the same vial that left the manufacturer, with little difference in copay for patients, she said.

"If it's a wash, in terms of what the patient is paying...they would rather go with the drug that has passed all the tests," Dr. Haller said . "It might be a little bit safer, and they don't have to fill out all the paperwork about the off-label use. It's a no brainer."

An additional barrier comes in the form of Medicare's reimbursement policies. Dr. Hutton says the biologics are typically purchased by the clinician, who administers them and who is reimbursed by Medicare, using a formula based on the average sales price plus 6%. Because there is less profit with a lower dose price of $55, he suggests raising reimbursement rates for Avastin, a "politically challenging" move, he acknowledges, to encourage providers on the fence to make the switch.

If raising the reimbursement rate triggered a mere 8% of Lucentis scripts to switch to Avastin, "you'd be budget-neutral," Dr. Hutton said.

"A lesson from this study for US policy makers is that anti-VEGF therapy for ophthalmologic use is an easy target for cost savings," the study authors conclude. "Changing future utilization patterns to favor bevacizumab over ranibizumab could eliminate $18 billion from the Medicare Part B budget and almost $5 billion in patient copayment costs. However, achieving these savings would require overcoming substantial roadblocks."

Financial support for the study was provided by the National Eye Institute. Dr. Haller has disclosed having been a consultant within the past 5 years for Genentech and for Regeneron Pharmaceuticals.

Health Aff. 2014;33:931-939. Abstract