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November 25th, 2009
02:39 PM ET

Drug price gaps can be tough pill to swallow

By David S. Martin
CNN Medical Senior Producer

Talking about health care costs in July, President Obama asked this question: “If there's a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that's going to make you well?”

Many ophthalmologists believe there is just such a blue pill out there. Only the red pill’s not twice as expensive. It costs almost 50 times much: $2,000 compared with about $45 for the alternative. And Medicare covers both.

What are the drugs? The expensive one is Lucentis. The other, Avastin. They’re not pills, really, but a medicine injected into the eye every four to six weeks to treat age-related, wet macular degeneration, a leading cause of blindness in seniors. With monthly injections, the annual cost difference is $24,000 versus $540.

It’s a difference that we, the taxpayers, underwrite. Lucentis cost Medicare $557.3 million last year, according to U.S. Centers for Medicare and Medicaid Services. That’s a figure that could rise as the population ages.

Many retina specialists think Avastin works as well as its more expensive rival, Lucentis, and roughly half of the wet macular degeneration patients are opting for Avastin, according to Dr. David F. Williams, president of the American Society of Retina Specialists.

Not surprisingly, Williams says, Medicare patients with supplemental insurance that covers the 20 percent co-pay are the most likely to choose Lucentis. (Medicare recipients ponied up $142.7 million in co-pays for Lucentis last year, according to government figures.)

Lucentis received FDA approval in 2006. The chemically similar Avastin was originally developed to treat cancer but its off-label use for wet macular degeneration predates Lucentis’ arrival on the market. To make this tale even stranger, both Lucentis and Avastin are made by the same company, Genentech, a division of the Swiss drug giant Roche. Can you guess which treatment the company advocates?

The National Eye Institute, part of the National Institutes of Health, is now conducting a head-to-head comparison of the two drugs. Initial results are expected at the end of next year.

Should the government require patients to choose the less-expensive drug? How about if the clinical trial shows no difference between the two?

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