Pharmaceutical Commerce - November/December 2016 - 19

Therapy Focus
glaucoma drops, is no longer available except
at exorbitant prices. (2)
Clinicians express particular ire for what
happened to phenylephrine hydrochloride,
a topical pupil dilator used for many decades
during cataract surgery. In 2013, because
of a paperwork glitch (the 70-plus-year-old
generic did not have a National Drug Code
number), it gained approval from the FDA as
a "new" drug. Within four months, all three
other makers of phenylephrine withdrew
from the market. Now Bausch + Lomb sells
for $115 per bottle what once cost $15.
Another area of concern is the rising cost
of branded antibiotic drops prescribed to
cataract patients post-surgically to prevent
infection. In a professional organization's
trade journal, prominent cataract surgeon
Eric Donnenfeld, MD, wrote: "Today, my
patients are outraged at the cost of cataract
surger y medications, and my staff is
considering mutiny after fielding dozens of
calls a week to resolve medication cost and
insurance approval issues." (3)
Allergan, Alcon and Bausch + Lomb
have introduced coupon systems that reduce
copays, but this can also be a hassle, writes
Donnenfeld: "This [coupon] system has
to become more seamless as my staff and I
want to do what is best for patients, but do
not want to be handing out coupons all day."
As a result, ophthalmologists are
increasingly opting to inject the drugs
during the surgery itself. Intracameral
antibiotics have been around since the
1990s-about 20% of surgeons use them
today-but when reports began to surface
of patients avoiding cataract surgery for
financial reasons, they gained popularity.
Unfortunately, no FDA-approved products
exist for this purpose. Thus some surgeons
are turning to compounding pharmacies
to create customized, off-label injectable
products. For example, the compounding
pharmacy Imprimis (San Diego, CA) offers
an injectable agent called TriMoxi, which
combines triamcinolone and moxifloxacin.
Access to drugs
Because ophthalmologists rely heavily
on products created by compounding
pharmacies, keen interest surrounds
the Drug Quality and Security Act of 2013,
which re-regulated the industry after NECC
compounding scandal, in which allegedly
contaminated, compounded steroids
caused dozens of deaths and injuries.
FDA has released multiple guidance
documents aimed at clarifying the law, but
gray areas persist.
Over the summer, in Congressional
testimony regarding the latest draft guidance
document, Nancey McCann, director of
government relations for the American
Society of Cataract and Refractive Surgery,
stressed that, in addition to Avastin,
clinicians need compounding pharmacies

to provide fortified antibiotics for patients
presenting acute corneal ulcers.
"Physicians have reported varying
difficulties in obtaining compounded drugs
since recent guidance has created confusion
in the market among state boards of
pharmacy, providers and pharmacists," she

specialty pharmacies like Avella-and some
do-but most practices opt for the greater
inventory control and profitability offered
by keeping drugs in stock. However, the
challenge here is that it strains the profession's
limited knowledge of this drug channel.
"For retina, buy-and-bill is still relatively

Walgreens Boots Alliance for the pharmacy
chain to sell certain ophthalmic and
dermatologic drugs directly from its 8,000
US locations on a consignment basis,
skipping over wholesalers. Valeant paid the
pharmacy a dispensing fee regardless of
whether insurance covered the drug.

Fig. 2

testified. "Because these drugs are not used
in practices on a regular basis, physicians
generally order them in smaller quantities,
which makes it less cost-effective for the
outsourcing facilities to produce." Also at
issue are the proposed beyond-use dates
(BUDs), which, at only five days, remain too
short to keep drugs in stock, critics say.
"The regulations and DQSA
guidance has resulted in consolidation of
compounding services, most notably,
driving the differentiation between a
503A and 503B facility," according to Eric
Sredzinski, PharmD, EVP of clinical quality
assurance for Avella Specialty Pharmacy,
which also offers compounded pharmacy
services. "From our perspective, determining
products to compound is a balance between
practitioner demand, feasibility, and the
investment required to compound. Avella's
focus has always been on quality and patient
safety and we welcome continued standards
with compounding, such as those positioned
in DQSA," he says.
In addition, retina specialists risk being
impacted by potential Medicare reforms of
the Average Sales Price (ASP) metric used
for reimbursing provider administered
injectable drugs. Under the so-called "buyand-bill" drug acquisition model, CMS pays
practices 6% above the sales price for these
drugs, but CMS is seeking to change that
formula. In March, CMS proposed a test of
lowering the ASP bonus to 2.5% plus a fixed
$16.80 payment in some geographical areas,
but it is unclear whether this pilot study will
actually move forward.
Retinal surgeons could avoid buy-andbill altogether by obtaining drugs through

new," says Jennifer Waters, VP of sales for
ophthalmology for the drug wholesaler
McKesson. "It's only been around since 2006
[the launch of anti-VEGF agents] that they
have been doing it." Hence her company
makes special efforts to help practices with
inventory management, regulatory updates
and administrative advice: "We have a
consulting arm that will partner with the
practice and look at their managed care
agreements, maybe help them negotiate with
private payers. We have a team that will go
in and do an in-practice diagnostic around
their revenue cycle-how quickly they can
get bills out the door and get reimbursed
better-things like that."
New models
Within the subtext of Shire's marketing
pitch lurks the message that ophthalmology
has been ill served by its current drug
manufacturers, Dempsey says, "Some of the
other companies are going through some
challenges in this space. We believe we are
investing in research and development,
while others are divesting."
He has made similar comments in other
venues, and they could be interpreted as a
criticism of Bausch + Lomb, whose parent
company Valeant (Laval, Canada) has a
reputation for slashing R&D budgets and
artificially driving growth through steep
price hikes, a practice that made headlines
last year. However, in the context of vision
care, one Valeant endeavor does deserve
scrutiny, and perhaps not in an entirely
negative light.
In his final troubled days as CEO last
year, Michael Pearson struck a deal with

For Valeant, the arrangement proved
disastrous. It footed the bill for the 25% of
prescriptions that payers refused to cover
and saw its eye-drug sales plunge 30% in
the first quarter of this year. The company's
new CEO is trying to extract the drug maker
from the deal.
But where some see this as a cautionary
tale, others see a potentially successful new
idea poorly executed. "It's a shame to think
of this as a failure, because I do think a
model like this could work," says Kathleen
Iacocca, PhD, an assistant professor at
Villanova University School of Business,
who has studied drug supply chains. "The
issue was the insured. The company took
a leap of faith without checking to make
sure if insurance would actually pay. But
imagine if a manufacturer could partner
with a third party where pre-authorization
could take place. That model would
be groundbreaking."
Iacocca added that because of its highprofit margins and relative lack of generic
competition, a small specialty like eyecare
would be an ideal space to test such a model.
The bigger picture points to steady
growth in eyecare, if only for demographic
trends. "Almost everybody, if they have
enough birthdays, is going to need to see an
ophthalmologist," notes consultant John B.
Pinto, president of J. Pinto and Associates
in San Diego, CA. "It's not like an oncologist
or a podiatrist where only a fraction of
the nation has a relationship with you.
Almost everybody gets to take a turn at the
ophthalmology dial."

1. Gonzales AL, et al. A survey of optometrists' ophthalmic medication prescribing. Clinical Optometry. March 2014;Vol. 6:11-15. Retrieved:
2. Roach L. (January 2015) "The State of Generic Drugs," EyeNet Magazine. Retrieved:
3. Donnenfeld E. (March 2016) "The Eye-Q Test," EyeWorld Magazine. Retrieved:
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