AMD Treatment Trends Call Attention
to Cost/Benefit Considerations
AMD treatment choices grow, can comparison-shopping be far behind?
BY ROCHELLE NATALONI, CONTRIBUTING
and emerging pharmacotherapy will expand the age-related macular degeneration (AMD)
market in the United States to nearly $2.3 billion in 2013, up from $275 million
just a decade earlier, according to Decision Resources, Inc., a Waltham, Mass-based
pharmaceutical and healthcare research and advisory firm. This anticipated growth
in the AMD market and the shift to pharmaceutical therapy within the vitreoretinal
arena raises a litany of concerns, with the value and cost to patients, physicians,
and society near the top of the list.
While pharmaceutical companies have clearly shown the usefulness
of photodynamic therapy (PDT) and anti-vascular endothelial growth factor treatments
via studies that prove they are clinically effective and, in some cases, more effective
than alternate treatment approaches, other considerations call the relative value
of these interventions into question.
For instance, a comparison of the actual cost of treating a lesion
in the office for 2 years with either laser or pegaptanib sodium (Macugen, OSI/Pfizer)
or PDT using verteporfin (Visudyne, QLT/Novartis), illustrates how expensive pharmacotherapy
is in comparison to laser therapy. The cost of treating the lesion using verteporfin,
including the drugs, the laser surgery and the diagnostic tests and office exams
is $11,162 for 2 years. Of that, $1,776 is in surgical fees, $2,116 is for the diagnostic
tests and $7,220 is the cost of the drug. Treating the same lesion with pegaptanib
sodium for 2 years costs $18,000. Treating the same lesion in the office with laser
therapy costs $1,735. The vast majority of the monies exchanged in the verteporfin
and pegaptanib sodium scenarios go to the drug manufacturers. "It's easy to see
that pharmacotherapy for AMD, while very expensive, is currently about all we have
to offer patients," says William Rich, III, MD, the American Academy of Ophthalmology's
(AAO) Secretary for Federal Affairs and Chairman of the AMA/Specialty Society RVS
Update Committee. "The question," he added, "is what is the relative value of that
Melissa M. Brown, MD, MN, MBA, who is co-director of The Center
for Value Based Medicine along with Gary C. Brown, MD, MBA and Sanjay Sharma, MD,
MSc, MBA, says a cost-utility analysis is exactly what is needed to answer that
question. In cost-utility analyses, which identify the value received from pharmaceutical
interventions for the dollars expended to all stakeholders in healthcare, including
patients, providers, insurers, administrators, and policy makers, value is based
on quality of life, length of life, and the efficacy of the intervention. Once those
are determined and interventions of equal value are identified, cost can be addressed.
Cost is important, but secondary, they maintain.
"Value is defined as an improvement in the quality of life and/or
the length of life. Medical interventions that have significant value are ones that
should be readily accessible. With the rising costs of healthcare back in the double
digits, costs should and do become a relevant factor when deciding among treatments
of similar value," says Dr. Melissa Brown. "In our evaluation of Macugen and Visudyne,
using quality-of-life analyses and clinical trial data we have been able to create
specific guidelines based on the value that each confers. We have been able to determine
where Macugen performs better and where the value is similar. In the instances where
the value is similar, Visudyne becomes the preferred treatment because the treatment
costs are significantly less than with Macugen usage," she says. When data are made
available from the combination verteporfin/pegaptanib sodium studies, she emphasizes,
re-evaluation will be in order.
Adverse effects are an important part of the value equation, says
Dr. Gary Brown. "For instance, about 1.3% of people on Macugen get endophthalmitis.
With a value-based analysis, you can put every single benefit as well as every single
adverse effect into the analysis to arrive at a common outcome," he says. "People
try to compare Visudyne and Macugen, but without a value-based approach there's
no way to tell which is the better choice," he adds.
Transpupillary thermotherapy (TTT), another AMD treatment that
is in the pipeline, will have to be factored into the analysis in the not too distant
future. "This intervention is much less expensive than alternatives and even easier
for patients, but the value has been shown to be slightly less than other treatments
in early data," says Dr. Gary Brown. "But it's not far off in value and something
that is going to have to be watched very closely," he adds.
One of the benefits of value-based medicine, he explains, is that,
while each therapy has different side effects and different outcomes, this methodology
can take those dissimilar numbers and make them comparable. "One can look at the
value gained from each when measured on the same scale," he says. "Value-based assessments
can be utilized in all fields of medicine. This may not be very important to retinologists
trying to decide which AMD treatment to use, but it's clearly very important to
all of the different third-party payers. Medicare, Medicaid, and the private insurers
are seeking this information," he adds.
Value-based medicine is beginning to capture the attention of
these payers and the methodology's catch words are creeping into the medical insurance
industry's lexicon. "Value-based medicine is used in other countries and clearly
there is significant interest and need here," Dr. Brown says.
Dr. Melissa Brown says that most importantly, value-based medicine
allows for better quality of care. The process highlights those interventions of
great value, some value, and those of minimal value. "The practice of medicine based
upon providing interventions that best improve the quality of life and allow for
a longer life at the most reasonable cost ultimately strengthens our overall healthcare
system," she says.
Retinal specialist George A. Williams, MD, chairman of the AAO's
Ophthalmic Technology Assessment Committee for Retinal Diseases and a member of
its Health Policy Committee, says that the Browns' work is being watched by a variety
of interested groups. "A lot of people have been looking for some guidance from
them and waiting to see what their data might show," he says. Dr. Williams points
out that while value-based medicine has been embraced in Canada and the United Kingdom,
countries in which the Browns have published extensively, the United States is lagging
behind. "The United Kingdom has the National Institute for Clinical Excellence (NICE),
and they've made a national decision that they are going to make the tough decisions
about value. Our country, on the other hand, has made the decision that it does
not want to do that, and that decision is based on politics. For example, the Centers
for Medicare and Medicaid Services (CMS) is actually prevented by law from looking
at the cost effectiveness of these AMD treatments," he says.
Sean R. Tunis, MD, the former chief medical officer of CMS and
director of the Office of Clinical Standards & Quality, addresses this topic
in a series of articles. In a May, 2004, New England Journal of Medicine
editorial, he wrote: "One of the most difficult policy issues confronted in any
discussion of coverage criteria is the role of cost effectiveness analysis in deciding
what is to be considered reasonable and necessary. The Medicare statute is silent
on that. . . The use of economic analyses in decisions about medical coverage will
be challenging to defend whenever a specific patient is denied care as a result.
. .Whether coverage decisions and other Medicare policy decisions should be influenced
by economic factors remains an important and controversial issue. Given the trend
in healthcare costs and the accelerating pace of medical discovery, policy making
should focus on getting good value from healthcare spending. . ."1
Society is not picking up the entire tab for AMD treatments; physicians
are splitting the bill. To calculate the cost of AMD pharmaceuticals to retinologists
one must consider both the reduced opportunity for income that is part of the overall
equation, as well as the effect of physician-provided pharmaceuticals on the physician
reimbursement fee structure.
The increasing use of pharmacotherapy in the vitreoretinal arena
has an indirect connection to an anticipated reduction in reimbursement to retinologists,
according to the AAO's Dr. Rich. "In-office physician-administered drugs are growing
faster than anything else in Medicare, and according to the formula that's used
to configure physician reimbursement, the use of in-office physician-administered
drugs, known as Part B drugs, essentially counts against the funds that are budgeted
to us, and this in turn lowers our fees," he says. Cancer drugs account for the
lion's share of the burgeoning in-office drug market, but Dr. Rich pointed out,
"just as the increase in cancer drugs affects reimbursement to ophthalmologists,
the increase in retina drugs affects reimbursement to primary-care physicians and
Dr. Williams further explains that the actual impact of in-office
AMD drug treatments on physician reimbursement is quite minimal in comparison to
other physician-administered drugs. "We're looking at relatively small players in
this field. For instance, I don't think the Visudyne sales in the United States
have ever been more than a few hundred million dollars per year, whereas some oncology
drugs can represent as much as $5 billion per year. So it's not that AMD drugs are
going to bankrupt the system, it's that the cumulative effect of the Part B drugs
adversely affects payments to physicians," he says. Dr. Williams is also chairman
of the Department of Ophthalmology, William Beaumont Hospital in Royal Oak, Michigan,
and a clinical professor of biomedical sciences at The Eye Research Institute of
Oakland University in Rochester, Michigan.
Rather than rising at the rate of inflation, reimbursement for
retinal office consultations and surgical interventions in Medicare will be reduced
by 26% between 2006 and 2012, according to Dr. Rich, unless Congress can be convinced
to eliminate the Sustainable Growth Rate (SGR) factor from the yearly calculation
Medicare fees. The SGR penalizes physicians if the growth in services exceeds the
Gross Domestic Product (GDP). The two leading factors which lead to growth above
the GDP are drugs given in the office by physicians and the increase in diagnostic
testing. "The services provided by retinal physicians that offer the greatest health
benefits such as macular hole surgery and office consultations for diabetic related
eye diseases, will essentially be reimbursed less," he said.
The problem with convincing Congress to change the SGR and administratively
remove drugs from physicians' budget, which would result in the elimination of almost
all of the anticipated cuts in physician services, is that the cost of doing so
is approximately $150 billion. Where can those funds be located? Physician payment
is in Part B Medicare, which is funded annually from tax revenues. The problem is
with tight budgetary constraints, the Bush administration is not interested in increasing
"spending," when it is actually cutting some spending from other health sectors
such as the Veterans Administration.
"This administration doesn't want anything to threaten its outpatient
drug bill. It doesn't want any other cost to go up in Medicare until the outpatient
drug bill is up and running," Dr. Rich says.
Dr. Rich pointed out that a bill recently introduced in Congress
may eliminate the SGR and the proposed cuts if physicians agree to a new reimbursement
paradigm that would reward physicians for agreeing to be "Paid for Performance."
Under this program physicians would be rewarded for practicing according to good
solid evidence-based quality-of-care measures. Physicians who do not follow those
guidelines would be penalized. The problem is that the program also includes economic
credentialing, which means that retina specialists' practice patterns would be scrutinized
to see if one of them orders more fundus photos or fluorescein angiograms than the
typical retinal specialist in their region of the country.
"Everyone agrees that we should all be practicing according to
quality guidelines but the economic credentialing is fairly onerous," Dr. Rich says.
Retinal specialist, Dr. Williams says the likely advent of pharmacotherapy
for ARMD will further aggravate the reimbursement situation. "The primary issue
in physician reimbursement is the adverse effect of the SGR. The formula for calculating
SGR is based on unrealistic and invalid assumptions that penalize physicians for
factors that are beyond their control. An example of such a factor is the cost of
physician-administered drugs," says Dr. Williams. A simplified version of this complex
formula, he says, is "The more you do, the more you lose."
Along those lines, the consensus is that injectable drugs
are the antithesis of a profit center for retinologists. "It costs us quite a bit
to provide these drugs," says Dr. Gary Brown, who is a professor of ophthalmology
at Jefferson Medical College and the Director of the Retina Service at Wills Eye
Hospital, in addition to his role at the Center for Value Based Medicine. "There
are several reasons for this. First, we have to pay for the drugs and second, all
it takes to lose money is for 1 patient out of 10 to either be uninsured or not
pay the co-pay with either Macugen or Visudyne. It's a real problem. We offer these
treatments because we think it's important to patients, but I think a lot of retinal
specialists wish they didn't have to offer them because it's very easy to get burned
if you have a few patients who don't pay. There isn't any other medication in ophthalmology
that has presented this problem, and I believe there are even a few insurers that
are not even allowing retinologists to take a differential on the drug. Congress
has considered eliminating that as well, so things can get even worse," he says.
Dr. Melissa Brown, an assistant surgeon at Wills Eye Hospital,
Adjunct Senior Fellow at the Leonard Davis Institute of Health Economics at the
University of Pennsylvania, and holds an adjunct faculty position at the University
of Pennsylvania School of Medicine in addition to her work with the Center for Value
Based Medicine. She says, "The key is to have a system of evaluating healthcare
that identifies good value for the best price and provides incentives, not disincentives,
for healthcare professionals that encourage those practices. The two aspects cannot
and should not be separated. The cost savings need to be made at the expense of
the less valuable and unnecessarily more costly interventions and not the professional
providing the care. It is in the obtainment of these goals where the worlds of politics
and medicine intersect," she concludes.
OCT AND FA
The cost-benefit ratio of AMD treatments would be incomplete without
consideration of Medicare coverage of optical coherence tomography (OCT) and fluorescein
angiography (FA) used for evaluating response to treatment and monitoring fellow
eyes. The clinical study protocol for pegaptanib sodium called for infrequent postoperative
testing. However, most retinologists who have incorporated pegaptanib into their
practices say they will test every 4 to 6 weeks at least for the first several treatments.
Critics of frequent testing say it is sometimes over-used to help to offset losses
associated with pharmacotherapy, and rumors have emerged suggesting that Medicare
will only cover one postop pegaptanib sodium diagnostic test. This, says Dr. Rich,
is completely false. "There is no national policy to that effect," he says. "There
are, however, isolated instances where that policy is in place." Dr. Rich says he
cannot imagine that lone policy being maintained. "That policy is an aberration
that was started by the carrier being told by industry that the tests weren't necessary,
and denying coverage was one way to keep costs down. No prudent retinal physician
is going to blindly inject a drug if they don't know whether the lesion is getting
better or worse or when they should stop. They need to know more about the natural
course of this disease to make prudent treatment decisions. [If that isolated policy
expands] the retinal community will have to step up and take the position that this
is not good medicine," he said. RP
1. Tunis SR. Why Medicare has not established criteria for coverage
decisions. N Eng J Med. 1994;350:2196-2198.
Retinal Physician, Issue: January 2006