Eyeing An Opportunity For Genentech

For Roche/Genentech the timing could not be worse.

At a time when cutting healthcare costs could still end up being put back on the frontburner in Washington comes a study showing how to possibly save a heckuva lot of money.

The huge Southern California healthcare plan that I grew with, Kaiser Permanente, is out with a "real-world" study in "Ophthalmology." the journal of the American Academy of Ophthalmology.

Kaiser researchers compared Roche/Genentech's cancer drug Avastin to the company's similar eye drug Lucentis in patients with what's called the wet form of age-related macular degeneration (AMD), which is the leading cause of adult-onset blindness. And they concluded they both do an equally good job of improving peoples' eyesight.

The drugs are injected straight into the eye with a needle. The computer I'm writing this blog on has caused the need for me to where glasses with a minor correction. I wouldn't wish AMD on anyone. The anxiety of getting a needle in the eye...yikes!

The AAO says with the aging population that AMD "is becoming an urgent concern for the healthcare system." I hear a Genentech-sponsored message about AMD at least once a day on the radio. Genentech/Roche sells Lucentis in the U.S. Roche's crosstown Basel, Switzerland rival Novartis sells it everywhere else. It's about a $2 billion-a-year product.

The study is relatively small and the authors acknowledge it has its flaws. But the findings are important because pharmacists and doctors can break Avastin up into little doses for the eye for a tiny fraction of what it costs for a dose of Lucentis. Using the blockbuster cancer drug Avastin for the eye is a so-called "off-label" or unapproved use. It's a common practice in medicine.

The federal government is doing a bigger, gold-standard clinical trial comparing the two drugs. All of the patients have been enrolled and the first results are expected early next year.

In the meantime, Genentech says that while doctors can choose which drugs they want to use, it continues to insist that only Lucentis has been extensively tested, proven safe and effective and approved by the FDA specifically for AMD.

But think of the goodwill and the good PR the company could generate if it tried to get out in front of the government study findings. Couldn't Roche/Genentech do a mea culpa, acknowledge the building body of real-world evidence, at least, that Avastin is just as good and Lucentis and start packaging Avastin in smaller, cheaper AMD-sized doses? I'm just asking. The company will say it has to strictly follow the science. But it's also a business.

When I tweeted the study findings on Twitter, one of my followers, biopharma consultant Aidan Finley replied, "Slow moving debacle." Another industry consultant, Sally Church, tweeted, "Ouch, that was a problem in the making."

Beyond the statement a spokesperson emailed to CNBC, Genentech had nothing to say about the study on Twitter. The company's last tweet was 10 days ago about being named to Fortune's list of best companies to work for.

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