Center for American Progress

SERIES: CAP Uses Medicare Physician Payment Database to Shine Light on Wasteful or Unnecessary Spending
Press Release

SERIES: CAP Uses Medicare Physician Payment Database to Shine Light on Wasteful or Unnecessary Spending

Washington, D.C. — With the recent release of the Medicare physician payment database, there is more information about Medicare payment costs and trends than ever before. Having analyzed the database, experts from the Center for American Progress will release a series of briefs highlighting inefficiencies in the system through case studies of specific treatments or procedures.

The first in this series takes a look at why a popular—and expensive—drug to treat age-related macular degeneration, or AMD, is being prescribed over an equally effective drug that is one-fortieth the cost, and it estimates how much could be saved by switching to the less-expensive drug.

At more than $2,000 per injection, Lucentis is one of the highest-volume cost drugs in the Medicare database. Lucentis was developed by Genentech to treat AMD, a form of blindness that affects elderly patients. However, another Genentech drug known as Avastin has been proven to be as effective at treating AMD at a cost of $50 per injection. Avastin was originally developed as a cancer drug and is sold at a dosage higher than needed for treating AMD. Genentech has refused to sell Avastin in the smaller doses, requiring pharmacists to repackage the drug manually in sterile environments in order to administer the appropriate dose to treat AMD.

According to CAP’s analysis, switching from Lucentis to the equally effective Avastin would save Medicare $930 million per year and lower patient out-of-pocket costs by $230 million per year, for total annual savings of $1.16 billion.

“Though studies have proven that Avastin is as effective at treating AMD as Lucentis, there are no incentives for Genentech to make simple dosing changes to this highly lucrative drug,” said Topher Spiro, Vice President for Health Policy at CAP and lead author of the brief. “The bottom line is that Genentech’s packaging decisions are costing Medicare and seniors more than $1.1 billion every year but providing no tangible benefit to patients.”

This ongoing series, titled “The High Price of Unnecessary Treatment,” will use Medicare database information to identify wasteful Medicare spending. The series will highlight treatments that have proven to be ineffective or cases where equally effective alternatives can be used at fractions of the cost to patients and taxpayers.

Click here to read the first brief in the series, “Eye Treatment for Seniors: How Lucentis Wastes More Than $1 Billion per Year.”

To speak to an expert on this topic, please contact Tom Caiazza at [email protected] or 202.481.7141.