Medicare is putting a new policy in place regarding the use and coverage of Avastin that will sharply curtail the use of the drug used for the treatment of eye diseases.

While Avastin costs thousands of dollars a month as a cancer treatment, when used in tiny portions, such as for the treatment of eye diseases, the medicine is just $30 to $40 an injection. But Medicare has now introduced a special reimbursement code just for the smaller doses of Avastin. And starting Thursday, the reimbursement of Avastin dropped to about $7.20 for the dose typically used in the eye.

Doctors who administer the drug will now be losing money on the drug. Medicare apparently calculated the reimbursement rate for the tiny eye doses based on the average sales price of Avastin for cancer. But it did not take into account the markup charged to eye doctors by compounding pharmacies — the chemists that divide up the Avastin into tiny doses under sterile conditions.

Now payers and insurance companies are going to be footing the bill which could potentially cost patients and subscribers more money.

To read the full article, click here: http://www.nytimes.com/2009/10/02/business/02avastin.html?scp=6&sq=October+2+2009&st=nyt