BLOG: The drugs that will bankrupt Medicare
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In the cover story of this issue of Ocular Surgery News, we explore sustained anti-VEGF therapy through novel release methods.
In the race for a “perfect” therapy, startups and giant drugmakers alike are trying to improve drug durability. Currently, monthly injections (or every 8 to 12 week) lead to missed doses and inadvertent loss of vision in too many patients. We are successfully solving this problem, but the bigger concern that will surely change the landscape for these drugs will be cost.
The two most common indications for anti-VEGF drugs are age-related macular degeneration and diabetes. To take a look at the numbers, let’s start with AMD. According to the American Academy of Ophthalmology, about 5% of the U.S. population has AMD, and with the aging population, that number is likely to nearly double by 2050, when the total population of the United States is expected to reach 438 million, according to the Pew Research Center. If the percentage with AMD is only 7.5%, that will be almost 33 million people. Of those, 15% will have neovascular AMD, or about 5 million people. Ignoring inflation, which could actually double costs by 2050, if each patient’s treatment continues to cost about $15,000 per year, that will be $74 billion devoted to treating just AMD. On top of that, other treatments for dry AMD are also on the horizon with similar prices, which could add a staggering $500 billion.
Let’s not forget diabetes. Here the “rule of thirds” applies. By 2050, about one-third of the U.S. population will have diabetes, according to the CDC. Of those, at least one-third will have diabetic retinopathy, and about one-third of diabetic retinopathy will have diabetic macular edema. Again, if the costs are $15,000 per patient per year, DME alone will cost a quarter of a trillion dollars. Add to that proliferative diabetic retinopathy with its own costs, and it’s clear why some call these the drugs that will bankrupt Medicare.
To be fair, better understanding, prevention and treatment for earlier stages of these diseases may significantly reduce the incidence of severe forms of both macular degeneration and diabetes, and demand for treatment may not grow as expected, but even today health care spending accounts for about 20% of the gross domestic product of the United States, more than any other country. The burden of this cost has already significantly strained our economy. Aware of these burgeoning costs, legislators of all political backgrounds recognize the need to reform, despite the lobbying power of drug and device makers and health care institutions.
In the short term, innovators of anti-VEGF and other therapies will likely continue to be rewarded by high valuations, but long-term downward pricing pressure on these kinds of drugs, as with expensive cancer and rare disease therapies, is inevitable. Both drugmakers and regulators are looking at alternate evaluation metrics for new treatments; instead of measuring impact on macular thickness, studies are already evaluating the retention of visual acuity and activities of daily living. Achieving these endpoints at a lower cost, but with a giant potential market, will need to satisfy innovators of the future.
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