New York Times Reports Genentech Gives Secret Rebates to Doctors

By on November 5, 2010
Genentech secret rebates

Genentech Inc. headquarters in South San Francisco, Calif.

In an effort to boost sales of its pricey eye injection treatment, Genentech has begun offering doctors confidential rebates to use the drug over less costly alternatives, the New York Times reports.  Genentech’s drug Lucentis is a once-a-month injection-based remedy used to treat blindness in elderly people and costs about $2000 for each injection.  Genentech also manufactures Avastin, which had been approved to only treat cancer in the eyes, but now is considered an effective treatment for blindness. Anastin, which costs $20 to $50 for each injection, works as well as Lucentis, retina specialists told the New York Times

Genentech’s rebate program is based on both volume and increases in use.  Doctors who have administered Lucentis to their patients have received up to $10,000 each quarter and according to a New York Times calculation, the largest rebates can earn physicians more than $58,000 in one quarter.  Dr. Susan Malinowksi, a retina specialist in Southfield, Michigan, told the New York Times that in light of health care cuts, doctors would pursue the opportunity to benefit from the rebates. 

Using Lucentis instead of Avastin would cost Medicare hundreds of millions of dollars each year and ultimately reward Genentech for their rebate program.  Dr. Greg Rosenthal, a retina specialist in Toledo, Ohio, who has opposed Genentech’s rebate program told the paper, “There’s no way to look at that without calling it bribery.”  The article further notes:

In 2008, Medicare paid for about 480,000 injections of Avastin to treat macular degeneration, compared with only 337,000 injections of Lucentis, according to Dr. Philip J. Rosenfeld of the Univesrity of Miami, who studied the records with Medicare officials. Yet the fewer Lucentis injections cost Medicare $537 million while the Avastin injections cost only $20 million.

In the first nine months of 2010, sales of Lucentis increased 29%, or about $1.1 billion.

Senator Herb Kohl of Wisconsin, chairman of the Special Committee on Aging, told the New York Times, “I am highly doubtful that Medicare will benefit in any way from the rebates being offered to doctors.” 

In June 17, 2010,  the Wall Street Journal published the results of a study which concluded that in 2008, use of Lucentis cost Medicare more than 25 times more than use of Avastin.

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