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March 2011

Ethics & Economics
By Jean Shaw, Contributing Writer
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The implications of rebate programs reach much further than a practice’s bottom line. Whether they can adversely affect patient care is up for debate, but this much is clear: The issue offers ophthalmologists a platform for discussing conflicts of interest and the ethics of decision-making.

Rebate programs in medicine are legal, but are they ethical? That question was thrust into the spotlight when the news broke that Genentech, the developer of ranibizumab (Lucentis), had established a confidential rebate program for selected high-volume users of the drug.1

This news emerged in a perfect storm of unfortunate timing just as a substantive decrease in the Medicare reimbursement for intravitreal injections went into effect; incoming members of the 112th Congress prepared to face off over health care legislation; and the NEI’s head-to-head study of Lucentis and its competitor bevacizumab (Avastin, also from Genentech) was coming into the final stretch—a study that might impact physician choice of drugs. (For more about the study, read “Avastin vs. Lucentis,” on page 60.)

Even 10 years ago, a drug rebate program might not have garnered the level of attention that this one has. But times have changed, and conflict-of-interest issues are firmly in the public consciousness, thanks to a confluence of forces that includes spiraling health care costs, increased scrutiny of ties between physicians and industry and an emerging body of research suggesting that even small, seemingly innocuous marketing efforts can have an impact on decision-making.

Thus, in this era of greater transparency, one discrete action—an individual physician’s decision to prescribe a particular drug—is anything but an isolated one. Now, more than ever, no decision goes unnoticed.

Here’s a brief overview of some of the ethical, sociopolitical and scientific ramifications of rebates and other commercial interests—and some advice for clinicians on how to navigate today’s complex conflict-of-interest decisions.



When ophthalmologists are considering potential conflicts of interest, the ethical bottom line is as straightforward as can be: Patient care comes first. As the Academy’s Advisory Opinion Disclosure of Professionally Related Commercial Relationships and Interests puts it, a conflict of interest (COI) exists when there is a “discrepancy between an ophthalmologist’s professional responsibilities to serve the patient’s best interests and his or her own personal interests or incentives.”2

The Institute of Medicine, which appointed a committee in 2007 to study COI issues, published similar language in its 2009 consensus report: “A clinical practice COI . . . occurs when a secondary financial interest creates the risk that the primary duty to the patient and the delivery of optimal care will be unduly influenced by personal financial interest of the care provider or care provider institution.”3

But finding one’s way through the COI labyrinth can be tricky. For instance, while the Academy’s opinion goes on to say, “It is essential that conflicting commercial interests be disclosed to the patient and to colleagues who may be affected by them,” it acknowledges that “not all commercial interests necessarily raise conflicts.”

Nuances of rebates. That point has relevance with regard to rebate programs, which are relatively common in medicine. While not all rebate programs are unethical, “sometimes they can be, and that’s why it’s important to sensitize physicians to the issues involved,” said David W. Parke II, MD, executive vice president and CEO of the Academy.

For instance, in basic rebate programs, volume discounts are available for common office supplies. But the choice of one brand of copier paper over another obviously has no impact on either patient care or practice ethics.

Elsewhere in ophthalmology, a rebate program for the Crystalens accommodating IOL is (as of press time) scheduled to end this month. In this program, patients who choose to have the Crystalens IOL implanted receive up to $250 per eye. The Crystalens rebate is “obviously an inducement or incentive, but the distinguishable fact is that the patient clearly understands what the incentive is,” said Charles M. Zacks, MD, former chairman of the Academy’s Ethics Committee and a cornea and external disease specialist in private practice in Portland, Maine. Moreover, a patient who doesn’t wish to receive a Crystalens IOL presumably can choose freely among other alternatives, provided they are presented in an otherwise objective manner. Though any inducement can be presented inappropriately, in the case of a patient-targeted rebate like this one the process is more transparent than scenarios in which financial incentives remain undisclosed, he said.

And those points go to the heart of the Lucentis controversy. In this instance, the rebate angered patients and physicians precisely because of the level of perceived secrecy and lack of transparency—as well as the paucity of other options for AMD patients.

It’s important to note that Genentech vigorously asserts that the Lucentis program is not a secret program. “It’s available to all practices that met the minimum prescribing level,” said John Snisarenko, MBA, Genentech’s vice president of sales and marketing for Lucentis. He added, “Business contracts that Genentech enters into commonly include language about confidentiality, and although the specific contract terms are confidential, the rebates are transparent to the government through price reporting.”

Think like a patient. Before ophthalmologists get caught up in parsing the legality of this or any other rebate program, the Ethics Committee encourages clinicians to take a step back and consider the ethical bottom line: patient care. How can a practicing physician, in muddled or unclear situations, know he or she might have a conflict of interest? When in doubt, physicians “should put themselves in their patients’ shoes,” said Dr. Zacks. If the tables were turned in this way, he asked, “Would the physician be comfortable with the degree of disclosure and explanation if he or she was on the receiving end” of the explanation? Or, as the Academy’s Advisory Opinion puts it, “Would you be willing to have these arrangements or inducements generally known?”

Dr. Zacks added, “The ethical principle is to disclose any information that would reasonably make a difference in a patient’s decision to proceed with treatment or to choose one treatment over another. If a doctor says, ‘We can use drug A or drug B,’ it clearly is of material interest to the patient for the doctor to then say, ‘When I use drug B, I get a rebate for doing so.’”

Dr. Zacks noted that several COI analyses and reports have suggested that, under the fee-for-service medical model, the very act of practicing medicine presents a potential COI. Retina specialist Nancy M. Holekamp, MD, agreed, and she cited other common daily conflicts of interest. In addition to the fee-for-service model, she said, there is “the ordering of in-office tests, from which we profit, and the ownership of ambulatory surgery centers, which are becoming more common in ophthalmology.” In each instance, Dr. Holekamp said, “Ophthalmologists have the responsibility to ask themselves, ‘Am I doing this in the best interest of the patient, or is it in my best interest?’ This is true of Lucentis. Is the patient receiving Lucentis because it is in the patient’s best interest or is there a tendency to use it over other treatments because a financial incentive/reward exists for the physician?” Dr. Holekamp is professor of clinical ophthalmology at Washington University and in private practice in St. Louis.

Ophthalmologists who are looking for more in-depth guidance have a unique resource: the Academy’s Ethics Committee. For more information, see “Making It Through the Ethics Maze,” on page 58.



In 2011, transparency is all. “If you think you’re going to keep anything secret in this day and age, you’re mistaken,” said George A. Williams, MD, member of the Academy’s Health Policy Committee and chairman of ophthalmology and director of the Beaumont Eye Center at the William Beaumont Hospital in Royal Oak, Mich.

On the federal level, the “sunshine provisions” in the Patient Protection and Affordable Care Act of 2009 were aimed at promoting greater reporting of biomedical COIs; draft regulations are expected to be issued in October. At the state level, patients who live in certain states, including Minnesota and Massachusetts, can search databases that report financial ties between manufacturers and physicians.

For his part, Genentech’s Mr. Snisarenko affirmed that the company will “absolutely” include the Lucentis rebate figures in its quarterly reports to the government. He also stated that all of the company’s rebate programs are designed to comply with the applicable laws and regulations. “Specifically, they are designed in compliance with the regulatory safe harbors to the federal anti-kickback statute.”

The patient’s perspective. However, some patients have had a different take on the matter. “I’ve had patients ask me point-blank, ‘Are you getting a kickback?’” said Philip J. Rosenfeld, MD, PhD, professor of ophthalmology at the Bascom Palmer Eye Institute. As it happens, Dr. Rosenfeld’s financial disclosure information is up on the University of Miami’s website, per the Association of American Medical Colleges’ recommendations in its June 2010 COI report.4

Some retina specialists report that, once they walk patients through the mechanics of the Lucentis rebate, any financial concerns tend to dissipate. This is the experience of Dr. Williams, who said that he has fielded only a handful of questions about the rebate. “I have a detailed discussion with the patient about both drugs,” he said. “I explain the financial implications with respect to overall cost and the patient’s copayments for each drug. I explain that physicians do make more money when they use Lucentis and that there are higher costs associated with Lucentis. I discuss what is known and unknown about the risks, benefits and treatment frequency for both drugs as well as the respective FDA approval status. I then let the patient decide which drug they are most comfortable with.”

Societal costs. In contrast, other ophthalmologists report significant, ongoing patient concerns over costs. “My patients are deeply concerned about the federal deficit and any increased cost burden to Medicare,” said James H. Guildford, MD, a retina specialist in private practice in West Palm Beach, Fla. He has noted patients’ resistance to the price of Lucentis for some time, and this latest development has only served to heighten their concerns. Indeed, a Wall Street Journal article reported last year that Dr. Rosenfeld and three CMS employees estimate that Medicare could save more than $500 million per year if ophthalmologists chose the less-expensive Avastin over Lucentis.5

At the moment, Dr. Rosenfeld said, “The real problem is how this incentive program is being perceived. It’s seen as a way to increase the number of times an eye is injected, since we assume clinicians are providing appropriate care and there aren’t a lot of patients in need of treatment who aren’t [already] receiving it. The only way to increase sales significantly is to inject more frequently, which increases the overall risk of endophthalmitis and the overall cost to Medicare and the taxpayer.”

Moreover, he said, the mechanics of the program are contrary to what has been called the “march toward greater transparency.”6 It’s abundantly clear that the zeitgeist has changed, and the pressure to disclose and better manage physician-industry relationships is on. Nondisclosure of the Lucentis program “infringes on the patient’s right to know,” Dr. Rosenfeld said. “Doesn’t a patient have the right to know that his or her physician is receiving an incentive whenever the decision is made to inject? How can a patient ever feel confident that the decision would have been the same if the financial incentives were not in place?”



No ophthalmologist wants to think that he or she is being manipulated by a manufacturer or drug company. “I would find it difficult to accept a rebate in exchange for increased utilization of a particular drug or device,” said Dr. Guildford. “I do not wish to be perceived as being manipulated by economic incentives.”

While it’s relatively easy to spot overt efforts to influence physician decision-making, subtler influences are harder to identify and combat. And a growing body of research—what’s known as the science of reciprocity—indicates that physicians may be more susceptible to sales and marketing efforts than they recognize.

There’s no question, in fact, that companies offer incentive programs because they are effective in changing physician behavior. In a comprehensive and influential review of 29 articles on the effects of physician-industry interactions published in 2000 in the Journal of the American Medical Association, Canadian psychiatrist Ashley Wazana, MD, concluded that those interactions led to increased prescription drug costs and to nonrational prescribing, in that the newly prescribed drugs had no therapeutic advantage over the alternatives.7

A few years later, in a JAMA article laying out a policy by which academic medical centers might eliminate conflicts of interest with pharmaceutical and medical device companies, the authors noted, “the rate of drug prescriptions by physicians increases substantially after they see sales representatives, attend company-supported symposia or accept drug samples.”8

More recently, neuroscientist P. Read Montague, PhD, and his research team conducted an fMRI imaging study in 151 people.9 The study used art as a measure of subjective preference in part because there’s no “correct” answer as to why a person prefers a particular piece of art—and then introduced the topic of influence through monetary favors and sponsoring logos (Figs. 1 and 2). The results show that “the obligation of a gift inscribes a neural signature,” said Dr. Montague, professor of physics and director of the human neuroimaging lab at Virginia Polytechnic Institute. “More important, the results show that it’s an automatic response,” he said.

When confronted with studies on the impact of industry influence, physicians commonly argue that their training and experience serve as a counterbalance. That may be true for some physicians, Dr. Montague said. “However, we don’t know that yet. Among our questions: Are different people predisposed to react differently? Can you arrange or identify mitigating factors?” Dr. Montague is studying decision-making in physicians but has not yet published his research.



Over the last several years, COI policies have been implemented within the world of academic medicine. As difficult as this has been, doing so within the confines of the clinical care setting may be even more challenging. But there’s no question that ophthalmologists and other physicians will continue to find themselves under the COI microscope. Federal and state governments, the public, the media and other watchdogs are only likely to push for more oversight, not less. In other words, this issue isn’t going away.

Since he began working in this area, Dr. Montague said, he has had a number of conversations with medical school deans about COI issues. “I tell them, ‘We’re living in a capitalist society. We need drug companies to develop medications. So what you have to do is to take a critical look at the way you’re paid and compensated. That’s why we have double-blind experiments.’”

The Academy appreciates the support provided by the American Society of Retina Specialists, the Retina Society and the Macula Society in addressing the ethical issues surrounding conflicts of interest and the potential introduction of bias in the delivery of high-quality patient care.

1 Pollack, A. “Genentech Offers Secret Rebate for Eye Drug,” The New York
Nov. 3, 2010.
2 Go to and select “Advisory Opinions.”
3 Go to and search on the IOM consensus report “Conflict of Interest in Medical Research, Education and Practice.”
4 Go to and search on the AAMC report “In the Interest of Patients: Recommendations for Physician Financial Relationships and Clinical Decision Making.”
5 Mundy, A. “Medicare Eye Study Finds Untapped Savings,” The Wall Street Journal June 17, 2010.
6 Stevenson, G. AHLA Connections 2010;10(12):26–31. Go to and select “News Center.”
7 Wazana, A. JAMA 2000;283:373–380.
8 Brennan, T. A. et al. JAMA 2006;295:429–433.
9 Harvey, A. H. et al. J Neurosci 2010;30:9597–9602.



If an ophthalmologist is on the verge of signing an agreement with a manufacturer or drug company, and it may not pass the “smell test,” who can be called upon for help?

The Academy provides a number of resources, notably the Code of Ethics and its accompanying Advisory Opinions and Policy Statements ( ).

In addition, the Academy’s Ethics Committee and staff are available to answer questions. Academy members can query the committee at any time, even before a situation is finalized. Here’s what to expect:

  • In-depth information. Academy members should not expect legal advice. Rather, they can expect to receive information designed to help understand the issues involved.
  • A frank discussion. The Ethics Committee members and staff can walk members through the potential pros and cons. They also can outline both professional and clinical responsibilities.
  • Reminders and referrals. If there are federal and/or state laws that may have a bearing on a particular situation, it is incumbent upon each physician and his or her lawyer to ferret those out. It’s important to note that the lawyer must be experienced in health care. If he or she does not fit that bill, ophthalmologists may wish to contact their state ophthalmology association, as it may be able to make referrals to attorneys who are familiar with local health care laws.

For more information or to submit an inquiry, write to the Ethics Committee at To find contact information for your state society, visit, then choose “Related Organizations.”



The first head-to-head comparison of Avastin and Lucentis is about to wrap up—and it’s no exaggeration to say that retina specialists are eagerly awaiting the results. Avastin and Lucentis, derived from the same monoclonal antibody, are both manufactured by Genentech. Lucentis, which costs approximately $2,000 per injection, was approved in 2006 for the treatment of neovascular AMD.

Avastin was approved in 2003 for intravenous use in treating colorectal cancer. However, it has also been used off-label for the treatment of wet AMD, at a cost of about $50 per injection. Its half-life is estimated to be twice as long in the eye as that of Lucentis, leading researchers to theorize that it might require fewer injections.

“When it was discovered that bevacizumab could be used to preserve vision in AMD patients, retina specialists started using it until ranibizumab was approved,” said Dr. Parke. “As the benefits of Avastin became more widely known, the public and profession called for this comparative study. The Academy salutes Genentech for having given ophthalmologists and their patients two highly effective drugs for the management of AMD and various retinal vascular diseases. It is now in the hands of ophthalmic researchers to refine what we know about the two drugs in a comparison study. The information gleaned will benefit not only individual patient care but will have socioeconomic repercussions as well.”

The Comparison of AMD Treatments Trial (CATT) study will address questions of efficacy and dosing, with visual acuity as the primary outcome measure. The prospective, randomized trial is funded by the NEI. Results are expected in the first half of this year.

For more information, see The CATT Manual of Procedures at



James H. Guildford, MD Retina specialist in private practice in West Palm Beach, Fla. Financial disclosure: No related interests.

Nancy M. Holekamp, MD Director of retinal services at the Pepose Vision Institute in St. Louis and professor of clinical ophthalmology at Washington University. Financial disclosure: Consultant to Genentech and an investigator in the CATT study, but she is not a participant in the Lucentis rebate program.

P. Read Montague, PhD Professor of physics and director of the human neuroimaging lab at Virginia Polytechnic Institute. Financial disclosure: Consultant to EmSense, which manufactures neuromeasurement devices for market research.

David W. Parke II, MD Executive vice president and CEO of the Academy. Financial disclosure: No related interests.

Philip J. Rosenfeld, MD, PhD Professor of ophthalmology at the Bascom Palmer Eye Institute. Financial disclosure: He was a principal investigator in the Lucentis trials and received research funding for PrONTO, an investigator-sponsored trial, but has not received financial support from Genentech in more than three years.

John Snisarenko, MBA Genentech’s vice president of sales and marketing for Lucentis.

George A. Williams, MD Member of the Academy’s Health Policy Committee, and chairman of ophthalmology and director of the Beaumont Eye Center at the William Beaumont Hospital in Royal Oak, Mich. Financial disclosure: Investigator in the CATT study and a participant in the Lucentis rebate program.

Charles M. Zacks, MD Former chairman of the Academy’s Ethics Committee, and cornea and external disease specialist at the Maine Eye Center in Portland. Financial disclosure: No related interests.


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