Genentech bumps $40 drug with $2000 version
U.S. senator chides Genentech plan
By David Morrill
Contra Costa Times
November 29, 2007
A U.S. senator said Genentech’s plan to restrict availability of its Avastin drug so doctors might be forced to use the more expensive medicine Lucentis to treat an eye disease will cost taxpayers $1 billion to $3 billion annually.
The South San Francisco-based biotech company’s decision “is of great concern to me,” U.S. Sen. Herb Kohl, D-Wis., said in letters to the U.S. Centers for Medicare and Medicaid Services and the Food and Drug Administration made public Wednesday.
Avastin is one of Genentech’s blockbuster cancer drugs. It treats patients with colon and lung cancer and is being studied worldwide in about 300 clinical trials for more than 20 tumor types.
But Avastin is also in the offices of eye doctors across the country, where it is being used to treat a major cause of vision loss, called neovascular age-related macular degeneration, or AMD.
The company’s superstar drug is going head-to-head with a drug called Lucentis that was approved last year by the U.S. Food and Drug Administration for AMD. Lucentis is also owned by Genentech.
The quandary is more than just two drugs that could potentially be used to fight the same eye disease. Lucentis costs about $2,000 per monthly dosage; Avastin could cost about $40.
Although it’s not stopping the off-label use of Avastin, Genentech did announce in October a move that some fear will make it harder for physicians to prescribe the medication.
Physicians need the help of specialized groups, called compounding pharmacies, to break down initial allotments of Avastin. The amount of the drug needed for eye injections is much smaller than what is required to treat cancer.
Genentech announced that as of January, these specialized pharmacies will no longer be able to purchase the product from wholesale distributors.
Some have asked Genentech to conduct a study comparing the effectiveness of Lucentis and Avastin in treating AMD, but the company has no plans to do so.
“For Genentech, we think our resources would be better spent to continue to do research in unmet patient needs,” said Krysta Pellegrino, spokeswoman for Genentech. “We believe that we’ve already shown that Lucentis is the right treatment for this eye disease.”
http://www.contracostatimes.com/news/ci_7588959?nclick_check=1
For more on this controversy:
http://www.allaboutvision.com/conditions/lucentis-vs-avastin.htm
Comment:
By Don McCanne, MD
Isn’t the marketplace beautiful?
Genentech found that the primary competition for its $2000 drug (Lucentis brand of ranibizumab) was its own expensive product for colon and lung cancer (Avastin brand of bevacizumab).
The pricing of drugs is not based simply on their development and production costs but rather is based more on what the market will bear. The ability of compounding pharmacists to greatly dilute the dose of Avastin to levels appropriate for treatment of the retina resulted in a plummeting of the price per dose compared to that of Lucentis.
As any successful business would do, Genentech made a decision to destroy its own competition with itself by prohibiting the legal sale of Avastin to the compounding pharmacists.
Since markets always result in lower costs through price competition, we certainly would not want the government to interfere through regulatory oversight. But since Genentech does not actually compete with itself it is able to set the highest prices attainable. And it is certainly understandable that Genentech does not want to do a head-to-head comparison study between its $2000 drug and its $40 drug.
The good news is that “U.S. government funds will be used to compare effectiveness and safety of the two different treatments. National Eye Institute (NEI) officials announced in October 2006 that they will launch their own clinical trials comparing outcomes of both Lucentis and Avastin as macular degeneration treatments.” (See allaboutvision link above.)
The likely bad news will be that, once again, our tax dollars will fund the research for private industry, and, if Avastin passes muster, Genentech will surely release it as a product specifically reformulated for retinal use, at a bargain price of $1900 per dose.
Isn’t our uniquely American health care system great?