This Is One Drug Worth Billions - OZY | A Modern Media Company

This Is One Drug Worth Billions

This Is One Drug Worth Billions

By Anne Miller

SourceGallery Stock


Because this is about more than one drug. It’s about the whole drug-approval system. 

By Anne Miller

According to a study out of the University of Michigan, one small change by ophthalmologists could save:

$18 billion

in Medicare costs over 10 years.

Plus another $4.6 billion in out-of-pocket copays from patients with two types of macular disease.

Not only that — patients who are not on Medicare, but who have private insurance, could save their carriers:

$29 billion

Where’s the cash coming from? It’s the difference between doctors prescribing one drug versus another in a rare confluence of legal loopholes and pharmaceutical profits, according to a university study that crunched these numbers.

It’s a highly unusual case, says Professor David Hutton, who led the study. He didn’t know many cases of a non-FDA-approved drug getting so much use when an FDA-approved drug exists.

“In this case, the manufacturer has no incentive to get their cheaper drug approved, [but] there is a huge financial incentive (for the patients and payers) to prescribe the cheaper drug,” he says.

The maneuvering is a little tricky, so bear with us. 

The key to this mountain of savings is two drugs: bevacizumab (trade name: Avastin) and ranibizumab (trade name: Lucentis). The first costs $55 a dose. The second, $2,023 per dose. The drugs have almost identical usefulness and side effects when treating a particular type of macular degeneration and diabetic macular edema.

Two-thirds of patients have gone the less expensive route — that’s how widespread the drug’s usage has become.

So how are they different?

The first one, the cheaper one, was created to fight cancer. Using it on eyes is an off-label use, meaning that while there’s good science to do so, it doesn’t have official FDA approval for that use — mostly because there’s no financial incentive for the drug maker to seek FDA approval, Hutton says.

And, he notes, bevacizumab has to be processed through a compounding pharmacy to break it down for use in smaller doses. If compounding sounds familiar, that may be because pharmacies that do so made news last year after a meningitis outbreak that killed more than a dozen people was traced to a compounding pharmacy.

Even so, Hutton estimates that two-thirds of patients have gone the less expensive route — that’s how widespread the drug’s usage has become. 

But it’s the other third that makes up the billion-dollar difference. The reasons the more expensive one continues ranges from financial incentives for doctors to the habits of medical professionals to the aforementioned lack of FDA approval. 

If it seems like there may be questionable practices going on, the Italian government has major questions about all this too. 

Just weeks ago, the government there not only approved Avastin to treat the eye conditions but is also seeking $1.6 billion in damages from the companies that developed and sell the drug for allegedly blocking the use of the cheaper version.

The drug companies have denied any wrongdoing and argue against the use of a cheaper drug that hasn’t been approved for ophthalmologic use.

But science, and money, might be running against them.

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