Genentech, docs resolve dispute on Avastin eye use

(Adds additional company comments)

By Kim Dixon

WASHINGTON, Dec 20 (Reuters) - Genentech Inc DNA.N has resolved a dispute with doctors over the use of its cancer drug Avastin, a much less costly alternative to the biotech company's Lucentis for macular degeneration, both sides said on Thursday.

Avastin works similarly to Lucentis, which was approved last year to treat wet, age-related macular degeneration and quickly became the treatment of choice for the leading cause of blindness among the elderly.

But the price-per-dose of Avastin is about 40 to 50 times cheaper than Lucentis, which costs $2,000, and some doctors have found it works to treat the eye condition, which occurs when abnormal blood vessels behind the retina start to grow.

Lucentis, a hoped-for growth driver for Genentech, had revenue of about $200 million in the third-quarter, but sales have been hampered by use of Avastin for macular degeneration.

The San Francisco-based company angered eye doctors in October when it said it would stop supplying Avastin to compounding pharmacies that repackage vials of the drug into much smaller doses for doctors.

Now, Genentech and two eye doctors' groups have agreed to a deal whereby doctors can buy Avastin from wholesale pharmacies, which will ship Avastin to compounding pharmacies.

Critics, including doctors' groups and at least one U.S. lawmaker, have criticized Genentech's restrictions as a cynical bid to protect Lucentis sales, a charge denied by Genentech.

Issues related to sterilization at a compounding pharmacy processing Avastin and concerns by U.S. regulators related to a Genentech manufacturing plant were among factors that led it to stop selling to compounding pharmacies, company spokeswoman Krysta Pellegrino said.

The company believes concerns by U.S. regulators regarding a Genentech plant have been resolved, she said.

"We're trying to abide by all the regulations and the spirit of the law while at the same time recognizing" that doctors seek access to Avastin for eye use, Pellegrino said.

An American Academy for Ophthalmology spokeswoman said the deal should work for most of its doctors, although it could make paperwork cumbersome. Siobhan Bunaes said Genentech assured the group it would not raise the price of Avastin.

Last month, Wisconsin Sen. Herb Kohl, Democratic head of the U.S. Senate's panel on aging, said he was probing Genentech's move to stop selling Avastin to compounding pharmacies. He cited estimates that the move could cost U.S. taxpayers from $1 billion to $3 billion a year.

More than 40 million elderly and disabled individuals in the United States get health insurance through government-funded Medicare.