Genentech rebates: Eye$ wide open

Drugmaker Genentech’s new promotion to get eye doctors to use the expensive injectable drug Lucentis for macular degeneration offers rebates to top-prescribing practices based on bulk and rate of increased use, the New York Times reports, despite little evidence that the drug works better than another far less-costly drug, Avastin.

The rebates may be designed to win or keep prescribers from Genentech’s Avastin, a similar drug indicated for cancer that some physicians say works equally well and costs about one percent of what Lucentis does.  A head-to-head trial between the two drugs is underway and some suggest the Lucentis promotion is a way of creating customers for the more expensive drug in the lead-up to the trial results.

The Lucentis rebate to physicians is based on volume but also increase in use—something that sounds all right enough for a coffee customer card, but disturbing for a drug. The program is a top-users club to begin with, only offered to the top 300 using practices in the country. Even with lattes, there’s a finite number of espresso shots one can or should have in a day/week/month, and reward for increase in use is a problematic model because it suggests a curve of infinite consumption.

More disturbing? The company has been explicit in keeping the program a secret. The Times reports that “doctors who have signed up for the rebates are not allowed to acknowledge even the existence of the program, let alone to talk about the specific terms,” in accordance with a company-proffered contract that practices must sign. That’s definitely not how they do the coffee cards.

Lucentis and Avastin are injectables, meaning a doctor must administer the doses rather than a patient going to a pharmacy to get a drug, and as with other injectables, Medicare reimburses doctors for buying the drugs. A rebate or bulk discount program offered by a drug company such as this one boosts the potential money a doctor can make and ties physician payment directly to frequency and volume of a drug used, which is one reason for the federal anti-kickback statute.

According to a calculation by the Times, the volume rebates combined with the increased usage rebates on offer could net a practice meeting the minimum requirements in the biggest rebate category $58,000 per quarter. U.S. sales of Lucentis went up nearly 30 percent in the first three quarters of 2010, to $1.1 billion, and though Medicare reimbursed for less fewer Lucentis injections in 2008, it paid a whole lot more for them: $537 million that year compared to $20 million for Avastin.

Whether these types of rebates violate anti-fraud and anti-kickback laws may depend both on whether they were properly disclosed to government payors, and on how they were promoted to providers. But putting that question aside, news of the program is worrisome from a medical standpoint. Here is a company promoting its (very costly) medicine based on some hybrid of the Starbucks/Costco philosophy—the more and more frequently you buy, the more you save!—and not on the efficacy or merits of the medicine, or on clinical trials and guidelines that demonstrate superiority to comparable drugs or optimum treatment regimens. And where is the patient in all this? Eyes open, and paying the bills.