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Report (OEI-03-10-00360)

04-20-2012
Medicare Payments for Drugs Used To Treat Wet Age Related Macular Degeneration

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Summary

WHY WE DID THIS STUDY

Wet age-related macular degeneration (AMD), a leading cause of vision loss in people aged 60 and older, affects millions of Americans. Lucentis is a Medicare Part B-covered drug approved by the Food and Drug Administration (FDA) for the treatment of wet AMD. Avastin is a Part B-covered drug approved by FDA for the treatment of various forms of cancer, but smaller doses of the drug are being used off-label to treat wet AMD. A dose of Avastin used to treat wet AMD costs a small fraction of the cost of a dose of Lucentis. CMS established a national Medicare payment amount for Lucentis; however, there is no national Medicare payment amount for Avastin when used to treat wet AMD in a physician's-office setting. In 2010, combined Part B expenditures for Lucentis and Avastin totaled nearly $2 billion.

HOW WE DID THIS STUDY

Using Medicare claims data, we selected 2 stratified random samples: 1 sample of 160 physicians who received Medicare payment for Lucentis and 1 sample of 160 physicians who received Medicare payment for Avastin. We sent electronic surveys asking physicians to provide the total dollar amount and quantity purchased of Lucentis and Avastin in the first quarter of 2010. We also asked physicians to describe the factors that they consider when choosing Avastin instead of Lucentis for the treatment of wet AMD. We compared physician acquisition costs to Medicare payment amounts obtained from CMS and Medicare contractors. Additionally, we analyzed Medicare contractor payment policies and the reasons physicians reported for administering Avastin instead of Lucentis.

WHAT WE FOUND

In the first quarter of 2010, physician acquisition costs for Lucentis and Avastin were 5 and 53 percent below the Medicare payment amount, respectively. Medicare contractors' payment amounts for Avastin when used to treat wet AMD differed by as much as 28 percent, although payment policies were similar. Additionally, we found that the majority of physicians who administered Avastin to treat wet AMD reported the substantial cost difference compared to Lucentis as a primary factor in their decision.

WHAT WE RECOMMEND

We recommend that CMS (1) establish a national payment code for Avastin when used for the treatment of wet AMD and (2) educate providers about the clinical and payment issues related to Lucentis and Avastin. CMS did not concur with our first recommendation at this time but did concur with our second recommendation.

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