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Audit (A-01-10-00514)

09-06-2011
Review of Medicare Part B Avastin and Lucentis Treatments for Age-Related Macular Degeneration

Executive Summary

We calculated that if Medicare reimbursement for all beneficiaries treated with Avastin or Lucentis for wet age-related macular degeneration (wet AMD) had been paid at the Avastin rate during calendar years (CY) 2008 and 2009, Medicare Part B would have saved approximately $1.1 billion and beneficiaries would have saved approximately $275 million in copayments. Conversely, we calculated that if Medicare reimbursement for all beneficiaries treated with Avastin or Lucentis for wet AMD had been paid at the Lucentis rate, Medicare Part B would have increased spending by approximately $1.5 billion and beneficiaries would have paid approximately $370 million more in copayments.

Lucentis is FDA-approved for this use while Avastin is not. There is a significant difference in Medicare Part B reimbursement for the two products. Addressing expenditures for the treatment of an increasing number of beneficiaries with wet AMD presents several challenges for the Medicare program. CMS's authority to limit reimbursement for the treatment of wet AMD to the rate of the least costly alternative is questionable.

Finally, despite the magnitude of Medicare expenditures for biologicals such as Lucentis, CMS does not have the authority to require price concessions or rebates from the manufacturers of such products under the Part B program. As the manufacturer of both Avastin and Lucentis, Genentech faces limited pressure to lower the sales price of Lucentis. We recommended that CMS (1) consider the results of this report when evaluating coverage and reimbursement policies related to Avastin and Lucentis, as well as broader strategies to control Part B drug expenditures, and (2) evaluate its current authorities and seek additional authorities as necessary to control Part B drug and biological expenditures more effectively.

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