When NICE News Isn't Very Nice for Roche

| About: Roche Holding (RHHBY)

By Daniel S. Levine

Lately when regulatory bodies have turned their eyes to Roche’s (OTCQX:RHHBY) cancer drug Avastin, it’s not been good news for the company. So when the National Institute for Health and Clinical Excellence, the United Kingdom’s healthcare advisory body that rules on what drugs can be made available through the National Health Service, wants to look at whether to expand the approved use of Avastin to an area that its maker Roche hasn’t asked them to consider, that should be good news, right? Not so.

In March 2010, the National Health Service asked NICE to take a look at Avastin and whether the clinical and cost effectiveness of the drug to treat wet age-related macular degeneration would justify its use. Wet age-related macular degeneration is the leading cause of blindness in the United Kingdom.

The Guardian reported that NICE has now decided to move towards an official appraisal of Avastin. A drug first approved to treat colon cancer, Avastin has been used off-label by doctors to treat wet age-related macular degeneration as an alternative to its pricier sister drug Lucentis. Both drugs were developed by Roche’s Genentech and both are monoclonal antibodies that work by choking off the growth of new blood vessels. AMD is caused by abnormal growth of blood vessels around the eye. Novartis (NYSE:NVS) markets Lucentis in the United Kingdom.

There’s a big financial incentive to allow Avastin to be used and for the drugmaker to fight it. The Royal Liverpool and Broadgreen University Hospitals pharmacy, which has been producing doses of Avastin for eyes, charges $117 a dose. Lucentis costs about $1,170 a dose, the Guardian reported.

In a July 2010 NICE workshop to consider whether to pursue Avastin as a treatment for wet age-related macular degeneration, Roche told NICE it’s never sought approval of the drug as an eye treatment “due to corporate considerations” and it has no plans to do so.

Pharmaceutical company representatives at the meeting argued that patient safety would be compromised unless safety management is undertaken. This would include creating safety registers, tracking the origin of a batch and recalling it in the event of a defect, writing periodic safety reviews, looking for safety signals, and undertaking post marketing surveillance. It was suggested that this would not be possible if the company were not willing to be involved. As a consequence, they argued that an appraisal would not be appropriate.

The NICE report (pdf) from the meeting says, however, that other stakeholders disagreed with that view and that feasibility of an appraisal would not be compromised, although adequate safety monitoring is important and should be considered in parallel with an appraisal. They said it would be relatively easy to track a batch because it is a specialist product which is only likely to be made by a few pharmacies. It is not likely to be any more difficult than tracking the manufacturer of a generic drug. The National Health Service, they said, could maintain safety registers.

Two clinical trials comparing the use of the Avastin against Lucentis are expected to be available in late 2011 and early 2012. The outcome of those studies should determine what NICE does, but also could increase the pressure elsewhere to use Avastin as a more cost-effective choice as government wrestle to reign in the cost of healthcare.