Eye treatment reimbursement change could cost Medicare millions

A change in the reimbursement rate for the drug Avastin, used off-label to treat an eye illness in the elderly, could lead Medicare doctors to use a much costlier drug that would cost the system millions, The New York Times reports.

"For several years, eye doctors have been using Avastin off-label as a treatment for retinal diseases, particularly age-related macular degeneration, the leading cause of blindness in the elderly." The cancer drug is similar to Lucentis — which costs $2,000 an injection — but costs only $30-$50 per shot when used for the eye illness.

The reimbursement for Avastin, however, dropped to $7.20 Thursday, which could make it more attractive for doctors to administer the much more expensive Lucentis instead.  According to the Times, "Medicare apparently calculated the reimbursement rate for the tiny eye doses based on the average sales price of Avastin for cancer. But it did not take into account the markup charged to eye doctors by compounding pharmacies — the chemists that divide up the Avastin into tiny doses under sterile conditions," (Pollack, 10/1).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.