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Genentech Offers Doctors Secret Rebates for Expensive Eye Drug

There seems to be no end to stories about drug companies paying doctors to push their products. This one seems especially shocking to me because it is costing both consumers and Medicare hundreds of millions of dollars annually, perhaps needlessly. The manufacturer Genentech has been offering “rebates” to the top 300 dispensers of the very expensive eye medication Lucentis. This is an enticement for the doctors to administer Lucentis rather than the much cheaper alternative Avastin, also manufactured by Genentech.

Lucentis is injected into the eye as a treatment for macular-degeneration. So is Avantis. But Lucentis costs as much as $2000 per injection, while Avantis costs as little as $20 per injection. Obviously Genentech makes hugely greater profits from the sale of Lucentis.

This practice was written up in a lengthy New York Times article, and I encourage you to read the full article. Here are excerpts from the opening paragraphs:

Genentech has begun offering secret rebates to eye doctors as an apparent inducement to get them to use more of the company’s expensive drug Lucentis rather than a less costly alternative.

Under the program, which started on Oct. 1, medical practices can earn up to tens of thousands of dollars in rebates each quarter if they use a lot of Lucentis and if their usage increases from the previous quarter, according to a confidential document outlining the program that was obtained by The New York Times.

Lucentis, approved in 2006, is mainly used to treat age-related macular degeneration, the leading cause of blindness in the elderly. It costs about $2,000 for each injection, with an injection into the eye needed as often as once a month.

The competition comes from Avastin, another Genentech drug that has the same mode of action. While Avastin is approved only to treat cancer, many retina specialists say it works just as well in the eye as Lucentis. So they are using it off-label because each injection costs only $20 to $50.

Using Avastin instead of Lucentis saves Medicare — and costs Genentech — hundreds of millions of dollars a year.

The rebates are considered a form of volume discount, and have been offered for some other drugs. They are legal if they adhere to certain guidelines.

Still, some doctors said they had ethical concerns about the arrangement.

“There’s no way to look at that without calling it bribery,” said Dr. Greg Rosenthal, a retina specialist in Toledo, Ohio, who has been critical of attempts by Genentech to get doctors to use Lucentis. He is not a participant in the rebate program.

Medicare reimburses at 6 percent above the average selling price of a drug, so that doctors can profit from use of a drug. For Lucentis, that 6 percent would translate to roughly $120 a dose.

Bob Kraft

I am a Dallas, Texas lawyer who has had the privilege of helping thousands of clients since 1971 in the areas of Personal Injury law and Social Security Disability.

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