BB&T Contributing Writer

SAN FRANCISCO – It is beginning to sound like a broken record, but the same theme that has become so well appreciated in the ophthalmic surgery world in the past two years has clearly been evident during the annual symposium of the American Society of Cataract and Refractive Surgery (ASCRS; Reston, Virginia), which took place here at the Moscone Center in mid-March.

A confluence of favorable events – the “perfect storm” in the words of refractive surgery industry consultant Shareef Mahdavi, president of SM2 Consulting (Pleasanton, California) – has created a tidal wave of interest in refractive surgery that has never been seen in the ophthalmic surgery industry.

Speaking at a meeting for investment analysts sponsored by one of the industry’s leaders, Advanced Medical Optics (AMO; Santa Ana, California), Mahdavi cited several favorable factors that are driving the refractive surgery market. These include improved technology, a favorable reimbursement environment and an aging, but affluent, population that is demanding quality vision care.

Mahdavi, who has spent well over a decade in the refractive surgery field, noted that five new intraocular lenses (IOLs) have been approved by the FDA in the past three years, setting the stage for strong industry marketing and more consumer choice. These lenses include ReSTOR from Alcon (Fort Worth, Texas), ReZoom from AMO and the Crystalens from Eyeonics (Aliso Viejo, California). The latter is privately owned and venture capital-backed while the other two are large, well-capitalized and prominent public companies.

In addition, AMO and STAAR Surgical (Monrovia, California) both now market phakic IOLs aimed primarily at treating high myopia, generally defined at eight diopters and above. Whereas the market potential of the first three IOLs mentioned is considered to be very large, phakic IOLs are generally considered to be niche products, with modest sales potential.

All-important: reimbursement

The reimbursement climate changed dramatically in May 2005, when the Centers for Medicare & Medicaid Services (CMS) began allowing patients to opt for higher technology, more costly lenses and could do so by paying the difference over a standard IOL. The impact of this ruling was dramatic. In only seven months, Alcon, the industry’s dominant ophthalmic surgery player, racked up $35 million in domestic ReSTOR revenues, with an additional $19 million generated outside the U.S. – by any measure an impressive performance for a new product.

Marketscope (Manchester, Missouri), which publishes the highly-respected monthly newsletter Ophthalmic Market Perspectives, noted in its April 7, 2006, issue that presbyopic IOLs accounted for 14% of domestic IOL dollar revenue in 2005 but is expected to more than double its share in 2006, reaching 30%.

It is important to note that the premium-priced IOL sector also is a financial boon to both manufacturers and physicians. The former, which have been selling IOLs for the Medicare population at about $100 per lens, now are reaping a veritable windfall, with average lens prices in the $850 range. With average manufacturing costs-per-lens at no more than $50, this represents pharmaceutical-like gross profit margins.

Similarly, physicians are prospering tremendously as their per-procedure IOL fee from CMS has soared from between $600 and $700 to $3,000 or more under this new, private pay scheme.

In a report issued early February by medical technology analyst Joanne Wuensch of the investment banking firm Harris Nesbitt (New York), she forecast that global ReSTOR revenue would reach $178 million, more than tripling the total of 2005. She also has forecast very robust growth for AMO’s ReZoom, with U.S. sales in 2006 predicted to be $35 million to $40 million, up dramatically from only $5 million in 2005.

Assessing strengths, weighing weaknesses

Although the new multi-focal IOLs represent a significant upgrade over older generation monofocal IOLs, these three lenses, individually, have distinct strengths and weaknesses. The relative merits of the three approved presbyopia correcting IOLs is already well understood as a plethora of papers were presented here and at other ophthalmic meetings in the past year.

It is well-appreciated that ReSTOR provides the best near vision, especially in bright light, as well as providing good distance vision. However, it is clearly not ideal at intermediate (computer reading) distance and can cause glare and halos.

On the other hand, ReZoom is slightly better than ReSTOR at distance, and notably better at intermediate. However, it provides poorer near vision than ReSTOR.

The Crystalens avoids the compromises associated with multifocals and appears to provide the best visual quality. However, it provides the least add-power of the three lenses and is thus is the weakest at near distance.

Consistent with their creativity and willingness to experiment, refractive surgeons have taken the best of each of these products and created a solid strategy called ”mix and match.” It stems from the fact that these two lenses are clearly complementary. The ReSTOR/ReZoom combination appears to be the current favorite combination, followed by ReSTOR/Crystalens.

Speaking at the AMO-sponsored meeting, Frank Bucci, MD, Bucci Cataract and Laser Vision Institute (Wilkes Barre, Pennsylvania), presented his findings from two cohorts of patients: 55 with bilateral ReSTOR lenses and 39 with a combination of ReZoom/ReSTOR.

He told analysts that 14 patients of the 55 bi-lateral ReSTOR patients complained of poor intermediate vision and, overall, were not pleased with their vision. Then, he switched to mix and match, using ReSTOR in one eye and ReZoom in the other, and there were no complaints from the next 39 patients.

“It is clear to me that ReZoom can rescue ReSTOR patients from a mediocre or disappointing outcome,” he asserted. Bucci further noted that the outcomes with the ReSTOR/ReZoom combination are helped by the fact that for near tasks ReSTOR performs best in bright light and ReZoom performs best in dim light; for distance vision the opposite is true.

Mixing and matching

Richard Lindstrom, MD, Minnesota Eye Consultants (Minneapolis), and a key thought leader in ophthalmic surgery, is also a strong advocate of mix and match. In a presentation titled, “Staged Implantation.” (see Table 5), Lindstrom’s strategy involves selecting an IOL for the first eye based upon the patient’s perceived greatest vision need – near, intermediate or distance. This strategy, he noted, has been used by contact lens implanters for many years.

After implanting the first presbyopic IOL, Lindstrom typically waits two to four weeks before choosing the IOL for the fellow eye. The choice of the second IOL is dictated by the patient’s feedback. If the patient is happy with the first implant, the same lens is implanted in the second eye. However, if the patient is unhappy with their near, intermediate or distance vision capabilities, Lindstrom selects a different IOL that he believes may better serve the patient’s needs. Many of Lindstrom’s patients often end up with mixed IOLs, including those with very different optics.

The concept of mix and match is by no means widely accepted, however; indeed, it is quite controversial. A front page story in the Jan. 15, 2006, issue of Ocular Surgery News discussed objections to the practice by some prominent ophthalmologists.

In a roundtable discussion at the meeting, Robert Lehmann, MD, Clearview Laser Vision Center (Grapevine, Texas), said: “I just do not have a need to consider mixing and matching because my patients do well with the single technology in both eyes.”

And Lehmann’s sentiments were echoed by Stephen Lane, MD, clinical professor of ophthalmology at the University of Minnesota (Minneapolis), who dismissed the concept and said that “I have not mixed ReSTOR with ReZoom.”

Since its market launch about a year ago, Alcon’s message to the market has been that this lens is the best bilateral solution for cataract patients seeking accommodation or multifocality. However, after about a year of real-world clinical experience, the reality is that ReSTOR is not a panacea for all.

Older and affluent

According to Mahdavi, today’s affluent consumers, between the ages of 40 and 64 years, have the financial resources to spend for the highest quality vision care that they can find.

“This group does not want to admit they are getting older,” he said, and “therefore they will not readily accept reading glasses. They are seeking a refractive product that will enable them to get the best solution for their needs.”

Mahdavi predicted that in just five years, 20% of the IOL industry would be premium-priced, providing patients with superior quality vision.

One of AMO’s most promising products is the Tecnis aspheric multi-focal lens, the subject of several positive papers here during ASCRS. Aspheric IOLs have become very popular recently, as their design appears to provide superior vision relative to conventional IOLs.

In late-January, AMO reported that the Tecnis lens had been designated as a New Technology Intraocular Lens (NTIOL) by CMS. The designation follows FDA-approved labeling claims in April 2004 that the lens reduced postoperative spherical aberrations compared to lenses with spherical optics and improved night driving simulator performance.

A NTIOL is defined as an IOL that CMS determines has been approved by the FDA for use in labeling and advertising an IOL’s claims of specific clinical advantages and superiority over existing IOLs. The Tecnis IOL is the only lens approved for NTIOL reimbursement, providing for additional Medicare reimbursement of $50 per lens for ambulatory surgical centers, where more than half of all cataract surgeries in the U.S. are performed.