Drug Giant Offers Secret Kickbacks on Costly Drug, Rips off Medicare

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$2,000 Per Dose or $20 for Avastin

Genetech, the biotech drug firm owned by Swiss pharmaceutical conglomerate Hoffman-LaRoche, has begun offering a secret incentive deal to doctors in order to get them to use a costly eye treatment, instead of an inexpensive alternative drug. The new program began on Oct. 1 and is by invitation only to specialty medical practices that are large purchasers of Lucentis, used to treat macular degeneration.

According to The New York Times, the program is designed to incentivize physician customers who purchase the drug Lucentis, rebates which can add up to tens of thousands of dollars per year. Rebates are not illegal if certain guidelines are strictly adhered to, and are sometimes offered for other drugs.

What’s unusual in the arrangement is the availability of another drug, Avastin, which is commonly used by physicians for treating the same condition, which occurs mostly in older patients. Both drugs are made by Genetech and use the same mode of action, although Avastin has only been approved by the FDA for certain types of cancer. The eye-specialists who use it are doing so off-label, and claim that it works just as well as Lucentis.

The difference in cost is striking. A single injection of Lucentis can cost $2,000 per eye and may be required as often as once each month. On the other hand, Avastin is a relative bargain with a cost of about $20 to $50 per treatment. Since most of the patients needing the treatment are older adults, the extra cost, as much as hundreds of millions of dollars each year, is picked up by Medicare- and ultimately the U.S. taxpayers.

The Chairman of the Special Committee on Aging, Senator Herb Kohl, who has looked into efforts to reduce the use of Avastin by Genetech, was critical of the new rebate program for Lucentis. According to Senator Kohl, “This rebate program appears to be an attempt to reverse the trend of significantly reduced reimbursements that Genentech has been receiving from Medicare for Lucentis. I am highly doubtful that Medicare will benefit in any way from the rebates being offered to doctors.”

One physician who was familiar with the program, believed that only about 300 physician offices were offered the incentive program thus far. Those using it must sign a confidentiality agreement and not discuss the plan’s details- or even the existence of the plan. Some doctors believe the program amounts to bribery.

A clinical trial is currently under way sponsored by National Eye Institute which will compare the effectiveness of both drugs for treating the same condition. Depending on the outcome, the continued use of Lucentis could become even more controversial, if the end result is similar.

According to Hoffman-LaRoche’s most recent financial report, sales of Lucentis in the U.S. increased 29% in the first nine months this year and hit a record $1.1 billion.

The New York Times

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