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Medicare is saving money by paying more for an eye medication. Here's how. Avastin is a cancer drug that costs about $30 per dose. While it's not approved for the eye, it's very similar to Lucentis, which is, but which costs $1,970 more. Doctors have traditionally chosen the less expensive drug, but when Medicare cut reimbursement for Avastin from about $50 a dose to about $7 a dose, which is below their costs, they responded by order Lucentis instead.
When CMS announced that it will revert to the higher reimbursement for Avanstin last week, it was ultimately saving the government substantial funds. Unfortunately, the change won't take effect until January.
Source: http://blogs.wsj.com/health/2009/10/02/how-cutting-payments-for-a-drug-could-cost-medicare-more/
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