Treating age-related macular degeneration: comparing the use of two drugs among medicare and veterans affairs populations.

While new biologics have revolutionized the treatment of age-related macular degeneration-the leading cause of severe vision loss among older adults-these new drugs have also raised concerns over the economic impact of medical innovation. The two leading agents are similar in effectiveness but vary greatly in price-up to $2,000 per injection for ranibizumab compared to $50 for bevacizumab. We examined the diffusion of these drugs in fee-for-service Medicare and Veterans Affairs (VA) systems during 2005-11, in part to assess the impact that differing financial incentives had on prescribing. Physicians treating Medicare patients have a direct financial incentive to prescribe the more expensive agent (ranibizumab), while VA physicians do not. Medicare injections of the more expensive ranibizumab peaked in 2007 at 47 percent. Beginning in 2009 the less expensive bevacizumab became the predominant therapy for Medicare patients, accounting for more than 60 percent of injections. For VA patients, the distribution of injections across the two drugs was relatively equal, particularly from 2009 to 2011. Our analysis indicates that there are opportunities in both the VA and Medicare to adopt more value-conscious treatment patterns and that multiple mechanisms exist to influence utilization.

Duke Scholars

Author M. Kate Bundorf Sanford School of Public Policy