CMS Pay For Off-Label Use Of Avastin In Wet Age-Related Macular Degeneration May Discourage Use

Rate based on Avastin's cancer indication puts ophthalmologists in the position of choosing whether to take a loss to administer it to Medicare beneficiaries or get full reimbursement for the more expensive, FDA-approved Lucentis.

CMS' new Q-code for the reimbursement of Avastin (bevacizumab) when it is used off-label to treat wet age-related macular degeneration is not enough to cover costs to ophthalmologists who administer, putting it at a disadvantage in the market to Lucentis (ranibizumab), which is approved for the indication.

In its quarterly Medicare Part B reimbursement update released Oct. 1, CMS included a new reimbursement rate based on 0.25 mg units of bevacizumab. For its cancer indication, Avastin's rate is based on 10 mg units, and because "hundreds of milligrams of Avastin are administered during cancer treatment, there was no need for a code that would reflect much smaller doses of the drug," a CMS spokesperson said. "However, when used to treat macular degeneration, only very small doses of Avastin are needed, and a new code was needed for use when billing these smaller amounts."

The spokesperson noted that contractors have been covering Avastin in the off-label indication because "there is evidence that it is an effective treatment" at a much lower cost than Lucentis. Both products are manufactured by Genentech, which is being acquired by Roche.

Because Genentech does not market the drug in the small doses used for the off-label indication, CMS based the rate on the reported average sales price when it is used for its labeled indication, giving payment rate of $1.437 per 0.25 mg. Based on that rate, doctors would get about $7 per treatment, according to the agency. However, eye doctors might spend as much as $50 per treatment because they get doses for administration from specialty pharmacies and incur an additional charge for its preparation, which is not reflected in the 0.25 mg reimbursement rate.

Prior to the new code, the spokesperson said doctors were commonly using a non-specific code when seeking reimbursement, leaving individual contractors processing the claims to make determinations based on the presented documentation on how much to reimburse for the Avastin administration.

In contrast, CMS reimburses ophthalmologists at $57.479 per 10 mg of Lucentis, and a doctor receives $2,039 per treatment. The drug costs about $2,000 per treatment.

"CMS' goal is to ensure Medicare and beneficiaries pay appropriately for services," the spokesperson said of the decision to set a reimbursement rate for small doses of Avastin. "As required by the Medicare Prescription Drug, Improvement and Modernization Act of 2003, Medicare must pay for Avastin based on the manufacturer's sales price plus 6 percent, and the payment rate for the new code for very small doses of Avastin reflects the average sales price reported by Genentech to Medicare."

Little Incentive For A Fight From Roche/Genentech

Since Genentech manufactures both products, the company stands to benefit if ophthalmologists favor the more expensive Lucentis over Avastin. Prior to its proposed union with Roche, Genentech was actively engaged in keeping Avastin out of the macular degeneration market (Also see "Comparative Effectiveness: Managed Care Eager For Data, Including Cost" - Pink Sheet, 11 May, 2009.), and Lucentis continues to see sales rise. In its most recently quarterly report, Roche said U.S. sales of Lucentis are up 21 percent for the first six months of 2009.

The company also has made no move to seek FDA approval for use of Avastin to treat age-related macular degeneration. However, the National Eye Institute is in the middle of a head-to-head comparative trial that is expected to conclude in 2011. The results have the potential to change the nature of the use of both drugs, although the trial has run into reimbursement concerns, which have forced the trial to be unmasked (Also see "Avastin v. Lucentis Trial Hits Snag: Co-Pays Essentially Unblind NIH Study" - Pink Sheet, 29 Oct, 2007.).

-Gregory Twachtman ([email protected])