Avastin/Lucentis Update 32: More on the CMS Repricing of Avastin

During the 2009 AAO Meeting in San Francisco, there was much discussion of the CMS cuts in reimbursement of Avastin beginning at the beginning of October.

Crystal Phend of MedPage Today provided a good summary of what has been transpiring in this controversy, including comments from the AAO. Now we await the results of Sen. Herb Kohl’s meeting with CMS officials.

Late Breaking News: (Courtesy of Dr. John Kitchens of Retina Associates of Kentucky)

According to CMS....

Effective January 1, we will be replacing the temporary HCPCS code, Q2024 (Injection, bevacizumab, 0.25 mg), with a new HCPCS C code with the same descriptor as Q2024. Because the C codes are only used by hospitals to bill for outpatient services, effective January 1, 2010, physicians should return to their billing practices prior to October 1, 2009 for small doses of Avastin, when administered in their offices to treat macular degeneration. If they have any questions, they should contact their local contractor.


AAO: CMS Payment Cuts for Eye Drug Counterproductive, Group Says

By Crystal Phend, Senior Staff Writer, MedPage Today
Published: October 27, 2009

SAN FRANCISCO -- The recent cut in Medicare reimbursement for intravitreal bevacizumab (Avastin) will hurt both patients and taxpayers by forcing a shift to more expensive options, according to American Academy of Ophthalmology officials.

The rule change that went into effect on Oct. 1 created a code to account for the tiny doses used in ophthalmology, requiring practices to bill in 0.25 mg increments at $1.25 each. That dropped reimbursement for the standard 1.25-mg intravitreal dose from about $50 to $6.25.

Reimbursement for its competitor ranibizumab (Lucentis) -- a closely related molecule generally considered to have equal efficacy -- remained unchanged at a whopping $2,039. Since ranibizumab costs under $2,000 for a single dose, ophthalmologists usually make around $120 with each injection.

But even at the prior reimbursement level, they usually didn't profit from choosing bevacizumab. One vial of bevacizumab -- originally developed for cancer treatment -- contains more than one intravitreal dose, but drawing multiple doses from the same container almost doubles the risk of infection. So, compounding pharmacies divide up the drug into individual doses, repackage, and sterilize them -- but at a price that typically pulled even with reimbursement before the Oct. 1 cut.

So the new rule actually creates a disincentive for using the drug that has been estimated to save Medicare $1.5 billion each year in treating macular degeneration alone, said William Rich, MD, the medical director for health policy at the AAO. The AAO and other ophthalmology organizations immediately started negotiating for a change that would reflect compounding charges, he said. One argument for the new rule is that CMS cannot legally pay for pharmacist costs, but that's not true, according to Rich, who said it is allowed for some asthma and pain management treatments.

Early talks were positive but led nowhere except to a Congressional inquiry, according to George Williams, MD, of William Beaumont Hospital in Royal Oak, Mich., and a member of the AAO Health Policy Committee. "We thought we had a solution," he told retinal surgeons at the AAO meeting here. After daily talks with CMS, "we were told two weeks ago it would be fixed. Two weeks have passed, and it is still not fixed."

Sen. Herb Kohl, D-Wis., who chairs the Senate Committee on Aging, has demanded an explanation for the change and questioned the role of Genentech, which manufactures both drugs and would stand to gain financially from greater use of its more expensive product.

The company has denied any part in the CMS decision, according to media reports.

CMS officials are set to meet with the Senate Committee on Aging later today, and Kohl has reportedly asked for a copy of all communication between CMS and Genentech. However, Rich was skeptical that CMS would have a remedy in place soon. "If the current policy is left in place, physicians lose, patients lose, and taxpayers lose," he said.

He has already heard reports of some ophthalmologists switching to the more expensive drug in order to avoid losing money. Because most patients with conditions treated off-label with bevacizumab are on Medicare, their 20% copays have increased dramatically. "Physicians who changed are getting tremendous pushback from patients," Rich said.

He urged a quick solution to avoid the shift in practice patterns from becoming set. As of 2007, bevacizumab held about 60% of the market share. "We're not interested in assigning blame, we just want to get it fixed" Rich said.