Recently, Avedro, manufacturer of the KXL System for corneal cross-linking and the riboflavin formulas used in that procedure (Photrexa and Photrexa Viscous), stirred controversy by deciding to raise the price of the drug formulations from $595 to $2,850 as of July 1, 2017. At the same time, Avedro announced an initiative the company says is intended to make the procedure available to more patients in the United States by helping to secure commercial insurance coverage of the procedure, and supporting its reimbursement. That initiative includes the Avedro Reimbursement Customer Hub program, or ARCH, which is comprised of three parts: a reimbursement support service that will assist with appeals to commercial payers for both the drugs and the procedure; a patient-assistance program that will provide the formulations to financially eligible, uninsured patients at no charge; and a prescription-assistance program that will limit patients’ out-of-pocket payments for the formulations to $595, if a commercial insurer denies the claim.
According to Reza Zadno, CEO of Avedro, the change in pricing is one part of an overall reimbursement effort and the result of a combination of factors: Insurance claims were already being submitted by patients and practices; the original pricing wasn’t sustainable; the new price more accurately reflects the clinical and health economic value of the procedure; it helps support the ARCH program; it will allow the company to earn back some of the cost of getting the drugs approved; and it will support future research to improve the procedure.
A surgeon (who asked that his name be withheld) sympathizes with Avedro’s situation. “I understand that’s it’s been a long, frustrating journey for Avedro to get this commercially available and viable,” he says. “Nevertheless, clinicians are disappointed with the price increase. The last thing most of us want to do is haggle with multiple insurance carriers over a procedure that’s done on a limited number of patients. These patients can require a lot of care and chair time, and the uncertainty of getting reimbursement can make it financially challenging, particularly for young, uninsured or underinsured patients, who might benefit the most from the procedure.”
The surgeon notes that the increased drug cost will be added to other substantial costs. “If I spend $80,000 on a unit and amortize it over 20 patients per year for four years, that’s $1,000 per procedure,” he says. “In addition, I have to charge $800 to $1,000 to cover the cost of about eight office visits and performing the procedure, which can take an hour and a half for the surgeon and a technician. With the new drug price, the total cost is then approaching $5,000.
“I understand the rationale for the price increase, but it could be a real hardship for some of the patients that need it the most, and they’ve already been forced to wait years for the procedure to be approved while their vision deteriorated,” he adds. “Meanwhile, no one is excited about having to convince multiple insurance companies to cover the procedure. This procedure could end up being done mostly as a labor of love by surgeons who are willing to do whatever is necessary to help these patients—which, of course, is the right thing to do.”
Avedro’s Mr. Zadno notes that keratoconus is an orphan indication for the procedure. “In the past year, approximately 8,000 procedures were performed,” he says. “The initial price was set to allow immediate patient access while insurance coverage was limited, but it wasn’t sustainable. It also didn’t reflect the benefit of this procedure, which potentially eliminates the need for a corneal transplant—and some patients need more than one transplant. The average cost of a transplant is between $13,000 and $27,000. So even at $2,850, plus the physician-determined cost of performing the procedure, the total cost is well below that of a single corneal transplant. If you look at orphan drugs in general, the average price is much higher than $2,850, and there are other products used in ophthalmology that are not orphan drugs but cost much more. Furthermore, this is a one-time treatment; some expensive drugs have to be used monthly.
“Our company has invested close to $130 million in the development and approval of its cross-linking technology,” he continues. “If 10,000 procedures were performed per year at the $595 cost, that’s only $5 or $6 million in revenue per year. More important, our goal is to pursue new applications for cross-linking and improve the procedure, which requires resources.”
Mr. Zadno says that some doctors are concerned that raising the cost of the drugs will lower their reimbursement for the procedure. “The two reimbursements are not bundled,” he says. “The cost of the drugs is billed separately from the payment to physicians for the procedure. The fee the physician charges is up to him or her.”
What about the cost to the patient? “What the patient pays will depend on the practice and the insurance carrier,” he explains. “When a patient has the procedure, the claim will be submitted to the patient’s insurance company. Our prescription assistance program will come into play if the insurance company says, ‘Sorry, we’re not paying for that new technology at this early stage.’ If that happens, $595 is the maximum the patient will pay for the drug. Meanwhile, our job is to work with the insurance companies to show the benefits of the procedure and convince them of its merits.”
Mr. Zadno notes that the price increase could be an issue for practices that don’t accept insurance. “In cornea, many procedures have been private pay,” he says. “But I suspect that as insurance companies start covering this procedure, patients will go where their insurance is accepted.”
Mr. Zadno says the company’s ARCH initiative is intended to ensure that all parties involved will benefit. “After the product launch last September, we saw that many patients couldn’t afford treatment and were delaying it,” he explains. “Also, some patients started submitting claims for reimbursement on their own. We decided to take the lead in the effort to obtain reimbursement so that more patients could have access to this procedure, including submitting to obtain a J-code for the drugs. In January, there were three insurance companies covering cross-linking. As of May, there are 14 companies across the country covering cross-linking, including Aetna. We’re working hard to get more companies to cover it, and do so at a payment that’s uniform and appropriate. This is not an elective procedure; it’s treating a progressive, sight-threatening disease, so it should be covered.
“For this program to work, all parties should benefit,” he adds. “Patients should have access to it; our ARCH program will help with that. Physicians should be reimbursed for the procedure. Payers should save money by avoiding paying for corneal transplants. And it should make sense for us, the manufacturer, so that we can continue developing this technology for the future.”
Remembering Roger Steinert, MD
On June 6, 2017, the field of ophthalmology lost one of its most respected members: Roger F. Steinert, MD, known for his leadership and expertise in the areas of cataract, refractive and corneal surgery. Dr. Steinert was a pioneer in LASIK, laser refractive surgery and corneal transplantation, developing new techniques that have preserved and improved vision for millions of individuals around the world. He died peacefully at his home in Vail, Colorado, from complications of glioblastoma. He was 66 years old.
Dr. Steinert obtained a BA in psychology from Harvard University in 1973 and his MD from Harvard Medical School in 1977; he then completed his residency at the Massachusetts Eye & Ear Infirmary. He began teaching at Harvard Medical School in 1981, eventually becoming an associate clinical professor; in 2004 he became a professor of ophthalmology at the University of California, Irvine.
His list of accomplishments is remarkable. They include being the Irving H. Leopold Professor and chair of the ophthalmology department at the University of California, Irvine, School of Medicine, as well as a professor of biomedical engineering; being the founding director of The Gavin Herbert Eye Institute; and being chief of staff at the University of California’s Irvine Medical Center. His awards include the American Academy of Ophthalmology’s 2008 Barraquer Award and 2009 Lifetime Achievement Award; the International Society of Refractive Surgery’s Lifetime Achievement Award in 2015; and the Ophthalmology Innovation Summit’s Lifetime Innovator Award in 2016. He was also president of American Society of Cataract and Refractive Surgery from 2005 to 2006.
While achieving all of this, he managed to maintain an active consultative practice in cataract, cornea and refractive surgery, and was on the editorial boards of several major ophthalmology journals. His textbook Cataract Surgery is considered the definitive reference on that topic.
“Roger was more than my mentor; he was one of my best friends,” says Sumit Garg, MD, Medical Director and associate professor at the Gavin Herbert Eye Institute. “I learned so much from him, not just as a doctor, but as a person. He was able to approach almost any situation with a cool and collected demeanor. He approached obstacles with a friendly smile, always taking the long view, keeping things in perspective. He was a creator of possibilities. It was largely because of his dedication that we were able to construct the Gavin Herbert Eye Institute. One of the things I will miss most is his sense of humor. We shared many good times together.
“Roger was more than the sum of his accomplishments and awards,” he adds. “For a generation of ophthalmologists, including me, he was a leader, teacher, mentor, friend and colleague whose daily commitment to excellence provided inspiration and guidance. Roger: One of the greatest gifts ever given to me was to be mentored by you and to call you a friend. Your legacy will live on in those you have trained and we will strive to make you proud. I will miss you. Rest in Peace.”