Medical Device Daily Contributing Writer

WASHINGTON – Cosmetic procedures make up by far the fastest-growing segment of the surgery market in the U.S. in the past several years as aging Americans seek to maintain a youthful and attractive appearance.

Based upon the number of sessions devoted to refractive surgery at the American Society of Cataract and Refractive Surgery’s (ASCRS; Reston, Virginia) annual Symposium on Cataract, IOL and Refractive Surgery, held at the Washington Convention Center, ophthalmology clearly is participating in this mega-trend.

The surgical correction of refractive error already has become a huge business for the industry and its physician customers, as the 1.4 million annual laser vision correction (LVC) procedures in the U.S. generate in excess of $2.5 billion in fees to the profession.

While there are clear-cut signs that the LVC market has begun to mature, with estimated procedures in 2005 of about 1.4 million essentially flat compared to 2000, recently approved and emerging technologies appear to have enormous clinical and commercial potential.

Whereas LVC primarily addresses the correction of myopia and to a lesser extent, astigmatism, these new techniques offer hope for the about 90 million aging Americans who will be presbyopic in the next 10 years.

The lion’s share of these technologies is based on an intraocular lens (IOL) implant, a skill that has been well-honed over many years by surgeons who remove a cataractous, clouded natural lens and then replace it with an IOL.

In the U.S., there now are five approved refractive IOLs. Publicly traded Advanced Medical Optics (AMO; Santa Ana, California) has three approved lenses, the Array and the recently approved Re-Zoom for multifocality and the phakic (natural lens remains intact) IOL Verisyse for patients with high myopia. AMO also has an option to acquire privately owned Quest Vision Technologies (Tiburon, California), which is in the early stages of developing an accommodative IOL designed to closely resemble the natural lens in design and function.

In late 2003, privately owned, venture capital-backed Eyeonics (Aliso Viejo, California) became the first U.S. company to gain approval for an accommodative, refractive intraocular lens, and recently the industry’s dominant player in cataract surgery, Alcon, (Fort Worth, Texas) gained FDA marketing clearance for its ReSTOR lens.

The approval of the Eyeonics Crystalens culminated about two decades of ardurous and frustrating work to perfect a design that mimics the movement of the natural lens as it shifts back and forth from a reading to distance mode.

In spite of very carefully controlled rollout and meticulous physician training, Eyeonics enjoyed strong sales momentum in 2004, as physicians and their patients responded well to its excellent efficacy and safety profile.

Clinical data presented in recent days at the ASCRS-sponsored conference was quite favorable, as numerous presenters reported that the Crystalens was performing as well or better than expected. Both John Doane, MD, of Discover Vision Centers (Kansas City, Kansas) and Steven Dell, MD, of Dell Laser Consultants (Austin, Texas) noted that their patients are enjoying outstanding reading and distance vision that has actually improved between year one and year three.

Both physicians indicated that more than 95% of the patients enjoy spectacle-free reading and very sharp distance vision. Most importantly, patient satisfaction is extremely high.

The ophthalmic industry’s juggernaut, Alcon, with annual global revenue of nearly $4 billion, is now prominently involved in the accommodative IOL market, having gained FDA approval for its ReSTOR IOL about a month ago (Medical Device Daily, March 28, 2005). This lens has been marketed in Europe since late 2003 and more than 11,000 eyes have been implanted to date.

ReSTOR is made from the same acrylic material as its hugely successful Acrysof conventional IOL and is based on a unique design that features apodization, refraction and diffraction qualities. The first term refers to a change in the characteristics of the lens from the center, moving out to the periphery. In particular, the center of this lens provides the patient with near vision, while out in the periphery, distance clarity is provided.

In addition to a plethora of podium papers that were strongly supportive of ReSTOR’s performance, Alcon held a press conference on Monday. CEO Cary Rayment said that it took a decade to develop this lens, with the goal to provide excellent near, intermediate and far vision. It appears that the company has achieved that goal, as 80% of the patients in the FDA pivotal trial were spectacle-free after implantation.

Richard Mackool, MD, a veteran ophthalmologist from the New York Eye & Ear Infirmary (New York), noted that while these results were clearly impressive, an additional 13% of patients could have been spectacle-free if enhancements had been allowed during the trial. In real life, these patients can and likely would opt for a procedure such as laser in situ keratomileusis (LASIK) that could further improve their vision.

Most importantly, about 94% of the patients said they were “very satisfied” and would have the procedure again, despite some who reported incidence of nighttime glare and halos.

Mackool, who called ReSTOR a “major breakthrough in IOL technology,” said he expects to use this product extensively in his practice upon market release next month. His surgical scheduling nurse, Susan Byrne, who received the implant in the pivotal trial, told the audience that it has been a “liberating experience” to get rid of her contact lenses and glasses.

Conventional cataract surgery and IOL implants are reimbursed by Medicare and these IOLs are typically priced in the $100 to $150 range in the U.S. Medicare patients are estimated to account for about 80% of the 2.8 million domestic annual IOL implants, while private-pay, pre-Medicare patients account for the rest.

Taking its cue from the enormous success for consumer-paid LVC procedures, Eyeonics is only selling to the private pay market and Alcon, after considerable soul-searching, has decided to follow the same strategy. Eyeonics priced Crystalens at $800 in the U.S., which will be leap-frogged by Alcon’s $895 price tag for ReSTOR.

These lenses are not marketed for any Medicare reimbursement and physicians charge the patient for both the full cost of the lens and the surgical fee.

Over the past several months, there has been an intense lobbying effort by the cataract and refractive surgery companies to educate the Centers for Medicare & Medicaid Services (CMS; Baltimore) that these new IOLs are truly for both a therapeutic (cataractous lens) and a refractive (restoring accommodation) purpose.

The industry and its supporters would like to see CMS adopt a policy whereby it would cover the therapeutic aspect of the IOL and the patient would pay for the refractive remainder. That is clearly divergent from its current policies, which treats an IOL as solely a therapeutic device.

John Ciccone, director of communications for ASCRS, said that “Medicare patients should have access to refractive and accommodating IOLS following cataract surgery and they should be allowed to pay the difference between what Medicare would normally reimburse for a conventional IOL and the cost of the accommodating or refractive lens.”

The outcome of this initiative will have important implications for not only today’s refractive IOL contenders but also for the myriad of startups that are diligently working to perfect accommodative IOL technology and garner a share of what promises to be a large and lucrative market.

Domestic sales of refractive IOLS are currently paltry, but rapid growth is expected in the coming years. Ken Taylor, OD, the CEO of Taylor Consulting Group (Marblehead, Massachusetts), a firm specializing in ophthalmic industry analysis, told Medical Device Daily that he projects that the embryonic refractive IOL market will grow at a robust 45% annual rate in the 2004 to 2009 period.

Taylor added that such a rate would be four to five times the rate of growth of the overall refractive surgery market.