State News

'Price of vision' much higher for NC Medicare patients

Posted April 25, 2014
Updated April 28, 2014

— In 2012, the federal government spent about $2.8 billion to reimburse North Carolina physicians for treatments administered to patients with Medicare, the medical insurance program for the elderly and disabled.

Most of the 2,900 different procedures in the state with the biggest share of that spending are the most common. Office and emergency room visits. Tissue exams. Ambulance services.

But among the largest total expenditures is an injectable drug called Lucentis, which costs about $2,000 a dose.

Used for the treatment of serious eye ailments such as macular degeneration, which can cause blindness in the elderly, doctors billed at least 78,000 doses of the drug to almost 4,000 Medicare patients in 2012. Due to both its popularity and its expense, Lucentis accounts for 89 cents of every $100 spent on Medicare in North Carolina – at least $25 million in all.

Yet a $50 "off-label" alternative – proven equally effective in multiple studies and manufactured by the same company – is rarely prescribed in North Carolina, according to a WRAL analysis of 2012 Medicare Part B spending data released by the federal government earlier this month.

That puts the state out of sync with eye doctors in the country as a whole, which typically opt for the cheaper option more than 40 percent of the time.

Because the data does not include Medicare Advantage plans offered by private insurers, it only covers about three-fourths of the country's Medicare recipients. It also does not include information on those insured outside of the Medicare system.

But health experts say the data does provide a good snapshot of health spending for the country's elderly population, the heaviest users of medical care. It also allows an unprecedented look at how two similar drugs with wide cost disparities are prescribed by ophthalmologists across the state.

Injection breakdown

The majority of North Carolina Medicare Part B patients treated for macular degeneration and other serious eye ailments in 2012 received Lucentis injections, with a competitor called Eylea coming at 37 percent. Avastin, a close cousin to Lucentis made by the same company and sold for much less, was prescribed only 6 percent of the time. The chart below shows the percentage and number of patients prescribed one of the four injectable treatments for degenerative eye diseases in North Carolina.

Source: Centers for Medicare and Medicaid Services

North Carolina eye doctors say there are good reasons why Avastin, originally created to fight cancer, is only administered to about 6 percent of Medicare patients who received injections for eye disorders.

For one, it's not approved by the Food and Drug Administration for the treatment of macular degeneration – nor will it be any time soon. It also requires a special facility for remixing and repackaging before it gets to the patient.

But given that the drug is cheaper than its close chemical cousin by a factor of 40, it often means eye doctors and their patients are forced to make a choice with the potential to seriously affect how much the country spends on medical care.

"People think it's just Drug A vs. Drug B. But it's really Drug A with all its logistics and Drug B with all of its logistics," said Dr. Robert Califf, vice chancellor of clinical and translational research at the Duke University School of Medicine. "The answer in practice is not as simple as it might seem."

Treating blindness with 'wonder drugs'

The debate over Lucentis and Avastin isn't a new one. In the years before the FDA approved Lucentis for the treatment of macular degeneration in 2006, eye doctors were already aware of the drug's similarity to Avastin, which had been on the market as a cancer treatment since 2004.

Both drugs are manufactured by the San Francisco-based Genentech.

In the fall of 2005, eye doctors began using Avastin off label for desperate patients who didn't make the cut for clinical trials of Lucentis.

"Some enterprising doctor decided to stick a needle in a patient's eye and found out it worked," Dr. Igor Westra, a Wilmington-based retina specialist, said. "It was kind of a serendipitous event."

As the state's top prescriber of the drug to Medicare patients, Westra was reimbursed about $1.8 million from the federal government for injections of Lucentis in 2012. One reason for the high total is his patient population, 85 percent of which is on Medicare or Medicaid.

Most of that money goes straight to Genentech, Westra said.

Despite positive results in Avastin case studies, eye doctors remained concerned about the risks involved with using a drug for purposes not approved by the FDA.

Dr. Matthew Appenzeller, an ophthalmologist at the Alamance Eye Center in Burlington, N.C., said the retina community began putting "tremendous pressure" on both the government and Genentech to test how the drugs compared.

"We wanted firm data behind it to reinforce what we were seeing in our clinics," Appenzeller said.

And what they were seeing was nothing short of remarkable.

Ten years ago, Westra said, there were few options for effectively treating macular degeneration and stopping the progression of blindness that takes away a patient's ability to read or drive.

"These are like wonder drugs," Westra said. "Before these drugs came out, the only thing we could do was laser the patients' eyes. The results would be pretty disappointing."

With either of the eye injections, Westra said, patients can typically maintain improvements in vision with regular injections every few weeks.

Moreover, Lucentis represented savings over laser treatment or surgery – even at $2,000 a dose.

"Even though this drug is very expensive, it's actually still cheaper than the previous treatment, which was not nearly as effective," said Dr. Edward Buckley, vice dean for education and ophthalmology professor at the Duke University School of Medicine.

What Medicare spends

About 1 percent of the total North Carolina spending for Medicare Part B in 2012 came from a single drug - Lucentis. It far outpaces spending on Eylea, a competing drug sanctioned by the FDA. Spending on Avastin - sold for about $50 a dose - doesn't even come close.

Source: Centers for Medicare and Medicaid Services

Eye doctors say comparative studies of the drugs were needed because Genentech will never seek FDA approval to use Avastin for treatment of macular degeneration. The company says only one drug is suitable for that purpose.

"Avastin was designed to treat cancer, therefore a long residence time in the blood stream was desired so that it could have sustained activity against tumors in the body," a company spokesperson said in a written statement. "Lucentis was designed to exit the blood stream very quickly (hours instead of weeks) in order to reduce the risk of systemic side effects."

Yet in multiple studies and clinical trials over the last few years, researchers have found the drugs are equally effective in the treatment of macular degeneration and don't increase risks of serious side effects like stroke or heart attack.

That was the conclusion of a study by Duke University researchers, published in the Journal of the American Medical Association in 2010, that examined Medicare claims of about 147,000 patients in 2005 and 2006.

A separate, randomized 2012 study – the Comparison of Age-Related Macular Degeneration Treatments Trials, or CATT – found after two years that both drugs had similar effects on vision improvement and presented "no differences" in death, heart attack or stroke.

"Really, there's no longer an argument to be made," Appenzeller said.

Despite that evidence, Genentech maintains that there are risks with choosing the less expensive option.

"Safety findings add to a growing body of evidence suggesting the risk of systemic adverse events may be higher when injecting Avastin into a person’s eye compared to Lucentis," a company spokesperson said in a written statement.

Appenzeller said although the studies do raise the question of safety with certain types of patients, their overall conclusions have clearly demonstrated comparative safety and effectiveness.

"I've always found it interesting that Genentech wants to keep providing the line trying to push us toward Lucentis over Avastin," Appenzeller said. "Most of us in the retina community look at this and just say, 'Whatever.'"

Complex supply chain creates problems

One logistical issue does remain for eye doctors who opt for the $50-a-dose Avastin – where to get it.

Avastin is intended to treat cancer, which requires larger doses of the drug in higher concentrations than what doctors need to inject into the eye. Before administering it to patients, eye doctors have to find a facility that will remix and repackage the drug.

That means finding a reputable compounding pharmacy. All those extra steps can mean more margin of error, Buckley said.

Getting treatment

The chart below shows the percentage and number of patients prescribed one of the four injectable treatments for degenerative eye diseases across the country.

North Carolina
Source: Centers for Medicare and Medicaid Services

"The biggest issue most folks have with this is that it's off-label use – and it requires smaller amounts than you can get Avastin in," Buckley said. "That is the added risk: going to this small volume runs this risk of contamination."

Although eye doctors say this risk is small, its potential impacts are well documented.

In July 2011, 12 patients in south Florida developed eye infections after receiving injections of Avastin, resulting in near blindness in all but one person. The injections were traced back to a single compounding pharmacy, leading investigators to conclude that the preparation of the syringes was to blame. A handful of other infections were reported in Nashville, Tenn., Minneapolis and Korea.

"You have a situation where you have a lot of fly-by-night compounding pharmacies that can't be trusted," Califf said.

In some clinics – Duke's hospital for example – these pharmacies are on site, reducing the risk of contamination. But other doctors serving the 34 percent of North Carolina residents in rural areas don't always have ready access to nearby facilities.

Buckley said this may be an explanation for the discrepancy between Lucentis prescription rates in North Carolina and the rest of the country.

Nationwide, according to 2012 Medicare Part B data, about 43 percent of patients receiving eye injections for degenerative eye ailments are treated with Avastin, versus the 39 percent treated with Lucentis. The remainder mostly receive Eylea, another FDA-approved competitor that costs about $1,900 per dose.

Data show 56 percent of North Carolina patients receive Lucentis, versus 6 percent Avastin. Medicare patients were treated with Eylea in this state about 37 percent of the time.

In some states with similar rural-urban divides – Iowa and Indiana for example – injection rates for Lucentis are even higher at more than 65 percent.

But in Tennessee, which is also similar to North Carolina in its rural-urban divide, Avastin injections for eye patients outpace Lucentis by a 10-point margin.

Making the choice

For eye doctors across the state and country, Buckley said, it comes down to a choice about risk. And without many incentives to pick the cheaper option, he said many physicians will avoid that risk.

"I'm out there on a limb. And as a clinician, you have to say, 'What's my duty to the patient versus the cost?" Buckley said.

For Appenzeller, that choice is often weighted toward Avastin. He said about 60 percent of his patients receive the $50 option, with the remaining 40 percent split about evenly between Lucentis and Eylea. According to national survey data of eye doctors across the country, he said that's typical of the average practice when accounting for patients on both Medicare and private insurance.

"In my personal practice, my default position – unless they request the FDA-approved version – is I give them Avastin," Appenzeller said. "I, just like any other American citizen, say, 'Medicare's in enough trouble as it is.' Why would I and my patient make it worse?"

He said he gets Avastin from a reputable compounding pharmacy with stringent procedures to prevent contamination. His patients are also aware of the fact the drug does not come direct from the manufacturer.

"Given their protocols, we haven't run into any problems," he said.

Not all eye doctors have that level of access. And Buckley said without movement from the company or the FDA to approve Avastin specifically for eye injections, physicians are often stuck.

"You can see where the physician gets put in the middle of an economic situation created by regulatory and drug company issues," Buckley said.

Normally, Califf said, competition between manufacturers would force drugs like these onto the market. But he said Genentech's hold on both competing drugs isn't as odd as some might think.

"To me, this is an extreme example of something that does happen every day in health care," Califf said. "What goes on a lot is that companies will buy products and kill them because they've got something else on market."

Comparing two drugs is often logistically difficult, Califf said. It requires hundreds or thousands of patients, clinical trials and millions of dollars to get definitive answers about effectiveness and comparative side effects.

That's the kind of problem the Patient-Centered Outcomes Research Institute is out to solve. Created by Congress as part of the Affordable Care Act, the institute is spending $100 million in federal money over the next 18 months to set up a vast network of interconnected health data to make conducting clinical trials easier and less expensive.

Califf, who leads PCORnet's clinical trials task force, says it's a move that's been long overdue.

"At Duke, we've been talking about databases and electronic records since 1965," he said. "I'm sad to say I've been here since almost the beginning."

The hope is that the use of these drugs and other medical procedures will become less about the business of health and more about patient outcomes.

At his practice on the coast, Westra said that's long been his primary concern.

"These drugs are really fantastic drugs," Westra said. "They're really expensive, but some people would say that's the price of vision."


This story is closed for comments.

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  • whatelseisnew Apr 25, 2014

    "Where does personal responsibility come into getting cancer or a host of other diseases "

    If you seek medical care, you pay for it. that is where the personal responsibility comes in. What you do not do is seek to have Government turn others into slaves for your benefit. that is what Obama and his ilk believe is the moral thing to do. He is wrong and you would think that he would know better, but apparently he does not understand that Government should not steal money from one person and hand it to another person.

  • Jackson Smith Apr 25, 2014
    user avatar

    Doctors do not get paid a percentage of the cost of the medicine they use. That would cause them to use the most expensive drug. They are paid a flat fee for intra retinal injections. They also can buy the drug directly from the manufacturer and have the charge delayed until he collects from Medicare of Insurance as well as getting the points on his credit card for the charge. Nice job by the manufacturer to create a positive for use of the more expensive product.

  • Obamacare returns again Apr 25, 2014

    How many more seniors do we need driving through store fronts before we say enough is enough? Get them the vision care they need or we'll all be at risk.

  • Grand Union Apr 25, 2014

    "Once you spend decades building a society of dependents they almost never want to revert to personal responsibility.

    Where does personal responsibility come into getting cancer or a host of other diseases or getting shot by a gun nut or hit by an unisured drunk driver?

    "This is why so many on welfare. housing assistance and food stamps remain on them for so long..."

    And you dont think have many many jobs paying less than a living wage may be also playing a part.....

    " actual self reliance is too much to be troubled with. It's much easier to be a Ward Of The State."

    True to a point but surely you understand that in a time when there are more unemployed than there are jobs then its either that or starve.
    There are also many that lets face it are virtually unemployable.....and while letting them stave to death would have a certain Old Testiment quality but its surely a little Dickensian for the 21st century?

  • Mark Anderson Apr 25, 2014
    user avatar

    View quoted thread

    I sincerely doubt you would do it for $1500 "a pop" since it likely costs you that much "a pop" or more from the drug company that makes it. My brother is an optometrist and we were talking about this drug that the retinal specialists use last weekend. He said due to the high cost charged by the drug company for the drug, the retinal specialists make next to nothing on the cost of the shot itself. (One of the doctors in the article said the same thing, that he realizes it is expensive, but that is what the drug company is charging.)

  • Danny22 Apr 25, 2014

    the patient and doctor should be able to make this decision as to which drug is best. This is why I hate gov't control. The gov't should have NO SAY SO.

  • Grand Union Apr 25, 2014

    "Funny, a friend who lives in Montreal has complained repeatedly that it takes months to get into a doctor, and then he's got just a few minutes before the doctor moves onto the next person."

    I did say almost no-one.....and months to see a doctor is utter fantasy and who gets more than a few minutes from any doctor. Only 0.5% travel to the US to get healthare and most of those are travelling there in any case.

  • winemaker81 Apr 25, 2014


    Funny, a friend who lives in Montreal has complained repeatedly that it takes months to get into a doctor, and then he's got just a few minutes before the doctor moves onto the next person.

  • Ty Shrake Apr 25, 2014
    user avatar

    " Almost no one in the UK Europe or Canada would swap their system for that of the US. " - GRAND UNION

    Once you spend decades building a society of dependents they almost never want to revert to personal responsibility. This is why so many on welfare. housing assistance and food stamps remain on them for so long... actual self reliance is too much to be troubled with. It's much easier to be a Ward Of The State.

  • Grand Union Apr 25, 2014

    "Now onto the the Rationing of Healthcare, You will see more and more of these type stories as ACA/ ObamaCare rolls out,. "

    What has this to do with rationing? If you want to spend your money you can have the expensive drug, if you want to spend taxpayers money why should the taxpayer, through our gov. , have a say in how much you spend?

    The fact is "Medicare" and "Medicaid" are broke, taxes will be going up dramatically to fund these. And the Baby Boomers will soon find out that the Government will be restricting the amount and cost of drugs used for their treatment."

    If the Gov. is paying and you don't want your taxes to increase whats your solution?

    "Research the UK NHS as an example."

    Please do. 100% coverage, as good or better outcomes and half the cost. Almost no one in the UK Europe or Canada would swap their system for that of the US. Yes Gov. limits some treatments that the Gov pays for but like here if you have the money you can get whatever you like privately.......