Why Physicians Prescribe a $2K Drug When a $50 Equivalent is Available — The Story of Genentech’s Avastin and Lucentis

Avastin and Lucentis: two drugs with roughly the same molecular structure, both manufactured by the same drugmaker. One is approved to treat cancer, the other wet age-related macular degeneration. However, their prices differ greatly, and their maker, Genentech, a division of Roche, has implemented tactics to encourage physicians to prescribe the pricier of the two. The story of these two drugs was the recent focus of a Washington Post special report exploring one example — physicians prescribing a more expensive drug when a cheaper equivalent is available — of the numerous forces that lead to higher healthcare costs.
Avastin is a drug whose name is now recognized by most Americans. Used to treat the certain types of advanced cancers, it has gained notoriety for its high price (around $30,000-$50,000 per treatment). Avastin doesn’t cure cancer, but it does extend life by a few months, in most cases.
After Avastin was approved for treating metastatic cancer, some physicians began to notice that it may be effective in treating wet age-related macular degeneration, or common old-age blindness. Interested, a few ophthalmologists prescribed Avastin for patients with wet AMD, even though it wasn’t yet approved for treating the condition — use of a drug for purposes not yet approved by the FDA is referred to as “off-label” use. An article in Mother Jones that was written as a follow-up to the Washington Post article explains how ophthalmologists came to use Avastin for wet AMD, and in my opinion, does a better job of explaining the many forces that lead to physicians using the more expensive treatment.
The ophthalmologists and the FDA urged Genentech to obtain FDA approval for Avastin’s efficacy in treating wet AMD, but Genentech never did so. Instead, it reformulated the drug, rebranded it Lucentis, and received FDA approval for wet AMD for the latter drug.
However, it priced Lucentis much higher than an equivalent dose of Avastin. While Avastin is expensive, such a low dose is required to treat wet AMD that the treatment cost just around $50, according to the Washington Post article. A Lucentis treatment runs closer to $2,000.
While Avastin is available only in larger vials, it can be broken into smaller doses at a lower cost than prescribing Lucentis.
While 61 percent of physicians prefer to use Avastin, Lucentis still is prescribed about 500,000 times per year, according to a report.
Why?