The Madhouse of American Healthcare: Treating Macular Degeneration

Age-Related Macular Degeneration (AMD) is caused by leaky blood vessels in the eye, and if untreated leads inexorably to blindness; it is diagnosed in about 200,000 Americans every year. In America today there are two drugs available to treat it, Avastin and Lucentis, both made by Genentech. From there the story twists into one of those maddening sagas of power and profit that makes American healthcare such an expensive folly:

Tested side by side in six major trials, both prevent blindness in a common old-age affliction. Biologically, they are cousins. They’re even made by the same company. But one holds a clear price advantage. Avastin costs about $50 per injection. Lucentis costs about $2,000 per injection. Doctors choose the more expensive drug more than half a million times every year, a choice that costs the Medicare program, the largest single customer, an extra $1 billion or more annually.

It's not that doctors don't know this; many do. There is even a group called Physicians for Clinical Responsibility that was founded to protest Lucentis and press for Avastin use. But Lucentis survives because Genentech has made it quite difficult to get Avastin in America. Avastin was developed as a cancer drug and is still sold that way, in doses far larger than are needed to treat AMD. So to use it ophthalmologists must buy the larger packets and split them up, creating dangers of contamination and exposing them to potential liability. I was actually startled to discover that 56% of ophthalmologists do this anyway, which shows that the greed of drug companies can go so far as to make even doctors queasy.

Meanwhile, in Congress:

The rising cost of U.S. entitlement programs such as Medicare has prompted outrage in Congress, but it is Congress that has made it difficult in this case and others for Medicare to limit such expenses.

MmmmHmm. In most of the world the government would pass a law requiring the use of the cheaper drug except in special circumstances, and the drug company would have to comply. But Republican in Congress, aided by Democrats from districts where the pharmaceutical industry is strong, have always written language into our health care laws that forbids Medicare from engaging in such tactics.

In cases in which two equivalent options are available, such as Lucentis and Avastin, Medicare is forbidden from restricting payment to the amount of the less costly alternative. After it sought to do so in 2009, a federal appeals court said it lacked that authority.

Whenever the government tries to save money by forcing doctors to use less expensive drugs, there is a loud outcry about how decisions should be made by doctors and patients, not "bureaucrats in Washington," and somebody like Sarah Palin starts shouting about "death panels." As a result, we transfer billions every year from taxpayers to the owners of pharmaceutical companies.

It is a perfect illustration of how the nexus of exciting new technology, patent law, and political power conspires to make the rich ever richer while the rest of us tread water. And we really ought to stop it now.