Genentech's Secret Rebates for Lucentis Eye Injections

Thanks to our friends over at Postscript, we learn of the article by Andrew Pollack in the New York Times:
http://www.nytimes.com/2010/11/04/business/04eye.html?scp=1&sq=andrew%20pollack%20genentech%20offers%20secret&st=cse

This seems to be the latest chapter in the Lucentis-Avastin saga:
http://brodyhooked.blogspot.com/2007/10/retinal-specialists-get-integrity-award.html

Genentech's problem: It manufactures both Avastin, a cancer drug, and Lucentis, a drug made from the active portion of the same molecule as Avastin (a classic "me too drug" strategy). Avastin injected into the eye is very good for treating wet macular degeneration. A dose of Lucentis for this indication costs $2000 while a dose of Avastin (used off label) costs $20-50. Looked at another way, in 2008, Medicare paid for 480,000 injections of Avastin, because so many retinal specialists (to their credit) want to use the cheaper but equally effective drug. Only 337,000 injections of Lucentis were paid for that year. Yet the smaller number of Lucentis injections cost the US taxpayer $537M compared to $20M for the Avastin.

Genentech would love to get more docs to use Lucentis, which this year has reached blockbuster drug status in the US with $1.1B in sales, especially before the results of a large scale trial are reported next spring, which many predict will show Avastin to be either the same or even better than Lucentis for this disease.

The answer: a rebate program that rewards docs who use high volumes of Lucentis and who increase their use of Lucentis from quarter to quarter. This is legal, but it seems interesting from an ethical standpoint that Genetech has operated this program in secret. Docs who sign up have to promise not to reveal even the existence of the program, let alone its terms.

Dr. Greg Rosenthal, one of the leaders among retinal specialists for the cost-saving use of Avastin, is quoted in the article, "There's no way to look at [the rebate program] without calling it bribery." The American Academy of Ophthalmology has said it will investigate. The bribery seems to be working--Lucentis sales are up 29% in the first 9 months of 2010.