1. New Toric IOLs Improve Outcomes and Reduce Costs Compared to Conventional IOLs Robert Pineda 1, Svetlana Denevich 2, Won Chan Lee 3, Curtis Waycaster 4, Sarah Pennie 3, Chris L. Pashos 2 Supported by Alcon Labs 1 Massachusetts Eye and Ear Infirmary, Boston, MA 2 HERQuLES, Abt Bio-Pharma Solutions, Inc., Lexington, MA 3 HERQuLES, Abt Bio-Pharma Solutions, Inc., Bethesda, MD 4 Alcon Labs, Fort Worth, TX S Denevich, WC Lee, S Pennie, and CL Pashos are employees of Abt Bio-Pharma Solutions Inc., an independent research organization. C Waycaster is an employee of Alcon Labs

2. 2 Approx. 30% of people ≥ 65 are affected by cataracts 1 Approx. 30% of people ≥ 65 are affected by cataracts 1 –15-29% of patients with cataract also have some degree of astigmatism 2 Astigmatism is routinely corrected at the time of cataract treatment using: Astigmatism is routinely corrected at the time of cataract treatment using: –Corneal surgery and/or –Implanting a toric intraocular lens (IOL) 3 Toric IOLs effectively improve visual acuity and quality of life in astigmatism patients compared to conventional monofocal IOLs 4,5,6 Toric IOLs effectively improve visual acuity and quality of life in astigmatism patients compared to conventional monofocal IOLs 4,5,6 Medicare does not cover the correction of astigmatism so the additional costs must be paid by cataract patients Medicare does not cover the correction of astigmatism so the additional costs must be paid by cataract patients 1. Dick, et al. Ophthalmol Clin North Am 2006. 2. American Academy of Ophthalmology. www.aao.org/ppp. 3. Gills. Curr Opin Ophthalmol 2002. 4. Ruhswurm, et al. J Cataract Refract Surg 2000. 5. Mendicute et al. J Cataract Refract Surg 2008. 6. DHHS Ruling 2007.www.aao.org/ppp Background and Introduction

3. 3 Our objective was to analyze the economic value of a toric IOL from the perspective of cataract patients with astigmatism Our objective was to analyze the economic value of a toric IOL from the perspective of cataract patients with astigmatism We hypothesized that the use of toric IOLs would prove cost-effective over the long- term through improved uncorrected visual acuity and reduced spectacle need We hypothesized that the use of toric IOLs would prove cost-effective over the long- term through improved uncorrected visual acuity and reduced spectacle need Objectives

4. 4 A decision analytic cost-effectiveness model was developed using MS Excel ® software A decision analytic cost-effectiveness model was developed using MS Excel ® software Data Sources Data Sources –Systematic literature review –Surveys of 60 U.S. practicing cataract/refractive surgeons who  Performed ≥ 20 cataract procedures per month using conventional or toric IOLs  Performed ≥ 10 surgical corrections of astigmatism per month  Practiced for ≥ 2 years & spent ≥ 50% of time in clinical setting Clinical Inputs Clinical Inputs –Distance vision spectacle independence –Proportion of patients achieving UCVA level ≥ 20/25 Clinical Pathway Clinical Pathway –All patients underwent cataract removal –Some patients could further transition to the second intervention (surgical or non- surgical) to correct residual refractive cylinder, and to the third intervention (a repeat refractive surgery) to optimize vision if needed Outcomes Outcomes –Average per patient cost of cataract surgery including the concomitant correction of astigmatism –Incremental cost-effectiveness ratio (ICER) of cataract surgery with concomitant correction of astigmatism  The effectiveness measure used was the proportion of patients achieving a UCVA level ≥ 20/25  ICER = (Cost A – Cost B)/(proportion ≥ 20/25 A – proportion ≥ 20/25 B) Study Design

5. 5 Decision Analysis Tree Abbreviations: AK=astigmatic keratotomy; CK=Conductive Keratoplasty; ICS=Incision Corneal Surgery; IOL=Intraocular Lens; LRI=Limbal Relaxing Incision; LVC=Laser Vision Correction; PCRI=Peripheral Corneal Relaxing Incision Cataract patients age ≥ 65 with ≤3.0 D, for whom distance vision correction was ultimate goal Legend XX/XX/XX = Probability of Treatment 1/ Treatment 2/ Treatment 3 = End node * The probability of re-treatment after Intervention B was assumed to be the same regardless of the treatment received during Intervention A

6. 6 Total costs Total costs –FY 2008 Medicare physician and ambulatory surgical facility fee reimbursement amounts –Patient out-of-pocket costs Cost components Cost components –Short term costs (1 st year post cataract removal): costs of procedures (cataract and refractive surgery), cost of one year of wearing glasses/contact lenses –Long term costs (all years following the 1 st year post cataract removal): cost associated with glasses/contact lens wear Cost Calculation Cost Calculation –Costs were assessed through 1 st year post cataract surgery and over an average remaining lifetime  Remaining lifetime was estimated at 17 years, based on the average life expectancy for a general US population at 65 years of age 1 –Lifetime costs combined the 1 st year costs and the costs over remaining lifetime –The lifetime costs were discounted at 3% annually 1. CDC. US Life tables 2008. Cost Assessment

7. 7 Cost components Patient Cost Total Cost Cataract treatment options Toric IOL Toric IOL Conventional IOL without intra-operative refractive correction Conventional IOL without intra-operative refractive correction Conventional monofocal IOL with intra-operative LRI/PCRI Conventional monofocal IOL with intra-operative LRI/PCRI $ 1,750 $ 1,750 $ 823 $ 823 $ 1,544 $ 1,544 $ 5,040 $ 5,040 $ 4,113 $ 4,113 $ 4,834 $ 4,834 Follow-up intervention to optimize vision Glasses (over 1 st year post cataract surgery) Glasses (over 1 st year post cataract surgery) Glasses (over each of the following years post cataract surgery) Glasses (over each of the following years post cataract surgery) Contacts (over 1 st year post cataract surgery) Contacts (over 1 st year post cataract surgery) Contacts (over each of the following years post cataract surgery) Contacts (over each of the following years post cataract surgery) LVC spectrum procedures LVC spectrum procedures ICS ICS CK CK $ 59 $ 59 $ 313 $ 313 $ 198 $ 198 $ 335 $ 335 $ 4,085 $ 4,085 $ 721 $ 721 $ 3,092 $ 3,092 $ 297 $ 297 $ 313 $ 313 $ 319 $ 319 $ 335 $ 335 $ 4,085 $ 4,085 $ 721 $ 721 $ 3,092 $ 3,092 Medical Costs of Services, Procedures and Devices per Patient 1,2,3 Abbreviations: AK=astigmatic keratotomy; CK=Conductive Keratoplasty; ICS=Incision Corneal Surgery; IOL=Intraocular Lens; LRI=Limbal Relaxing Incision; LVC=Laser Vision Correction; PCRI=Peripheral Corneal Relaxing Incision 1. Alcon Labs Inc. 2008. 2. AMA 2008. 3. CMS 2008. Unit Costs

8. 8 Legend Treatment Arms: 1. Toric IOL 2. Conventional Monofocal IOL with glasses 3. Conventional Monofocal IOL with LRI/PCRI Medicare payments Patient payments Results – Average Costs per Patient Toric IOL yielded better clinical outcomes than the conventional IOL with and without intra-operative refractive correction: 67%, 63%, and 53% of patients achieved spectacle independence, and 53%, 48%, and 44% of patients had UCVA ≥20/25, respectively. Toric IOL yielded better clinical outcomes than the conventional IOL with and without intra-operative refractive correction: 67%, 63%, and 53% of patients achieved spectacle independence, and 53%, 48%, and 44% of patients had UCVA ≥20/25, respectively. Toric IOLs incurred the highest first year costs compared to the other two treatment options. However, once life time costs were accrued the Toric provided an average cost savings to patients. Toric IOLs incurred the highest first year costs compared to the other two treatment options. However, once life time costs were accrued the Toric provided an average cost savings to patients. Total Cost of Cataract and Follow-up Astigmatism Correction Treatments First YearLifetime 2150 1270 1977 3964 4170 4090 3379 3408 3388 3379 3408 3387

9. 9 Incremental cost of treatment* ICER per patient with UCVA ≥ 20/25* Incremental cost of treatment* ICER per patient with UCVA ≥ 20/25* First Year Lifetime Toric IOL Total costs Total costs Patient costs Patient costs $ 851 $ 880 $ 9,768 $ 9,768 $ 10,099 $ -235.15 $ -206.29 $- 2,699 $ -2,368 CM IOL with intra- operative LRI/PCRI Total costs Total costs Patient costs Patient costs $ 687 $ 707 $ 16,567 $ 17,060 $ -100 $ -80 $ -80 $ -2,417 $ -1,925 CM=conventional monofocal; ICER = Incremental Cost Effectiveness Ratio; IOL=Intraocular Lens; LRI=Limbal Relaxing Incision; PCRI=Peripheral Corneal Relaxing Incision Results – Cost-Effectiveness In the first year, both astigmatism-correcting cataract treatments were cost- ineffective compared to the conventional monofocal IOL with glasses/contacts. In the first year, both astigmatism-correcting cataract treatments were cost- ineffective compared to the conventional monofocal IOL with glasses/contacts. Once lifetime costs were considered, the Toric IOL proved the better value compared to either a conventional monofocal IOL with LRI/PCRI or a conventional monofocal IOL with glasses/contacts. Toric ICERs were lower (better) due to a larger proportion of patients achieving an uncorrected visual acuity of ≥ 20/25 Once lifetime costs were considered, the Toric IOL proved the better value compared to either a conventional monofocal IOL with LRI/PCRI or a conventional monofocal IOL with glasses/contacts. Toric ICERs were lower (better) due to a larger proportion of patients achieving an uncorrected visual acuity of ≥ 20/25 * CM IOL without intra-operative refractive correction was used as a baseline comparator

10. 10 Sensitivity Analysis Parameter Best-case scenario value Default model value Worse-case scenario value Patient cost of cataract surgery with toric IOL $750 per eye $825 per eye $1,000 per eye Probability of distance vision spectacle independence with toric IOL 90%67%50% To test the robustness of the model results, we varied the cost of toric IOL to account for possible cost range To test the robustness of the model results, we varied the cost of toric IOL to account for possible cost range Proportion of patients achieving distance vision independence was also varied to account for possible better and worse outcomes as identified in clinical studies. Proportion of patients achieving distance vision independence was also varied to account for possible better and worse outcomes as identified in clinical studies. All best-case scenarios indicated better value (negative ICER) with the toric IOL compared to that obtained with default model values. Results were more sensitive to the change in distance vision spectacle independence than in the cost of the toric IOL. Result sensitivity was greatest when the probability of distance vision spectacle independence and toric IOL cost were modified simultaneously. All best-case scenarios indicated better value (negative ICER) with the toric IOL compared to that obtained with default model values. Results were more sensitive to the change in distance vision spectacle independence than in the cost of the toric IOL. Result sensitivity was greatest when the probability of distance vision spectacle independence and toric IOL cost were modified simultaneously. $750 per eye - $2,90 0 $1,000 per eye +$20 1 Cost of toric IOL 90% - $15,0 00 50% +$12, 670 Spectacle independence $750 per eye 90% - $17,5 00 $1,000 per eye 50% +$16, 000 Simultaneous modifying of both parameters Best-case: ICERs with toric IOL vs. conventional monofocal IOL Worse-case: ICERs with toric IOL vs. conventional monofocal IOL

11. 11 The Toric IOL is the economically dominant treatment for the correction of astigmatism in cataract patients compared to conventional monofocal IOLs with either glasses or intra-operative refractive surgery. The Toric IOL is the economically dominant treatment for the correction of astigmatism in cataract patients compared to conventional monofocal IOLs with either glasses or intra-operative refractive surgery. Nearly all of the cost savings afforded by the Toric IOL are accrued by the patient. Nearly all of the cost savings afforded by the Toric IOL are accrued by the patient. These results may be informative to physicians and patients regarding the value and long-term benefits of the toric IOL to treat cataract with preexisting astigmatism. These results may be informative to physicians and patients regarding the value and long-term benefits of the toric IOL to treat cataract with preexisting astigmatism. Future research quantifying lost productivity and other intangible costs of wearing glasses/lenses is warranted to ensure that the outcomes of alternative treatments are as comprehensively evaluated as possible. Future research quantifying lost productivity and other intangible costs of wearing glasses/lenses is warranted to ensure that the outcomes of alternative treatments are as comprehensively evaluated as possible. Our findings should be cautiously applied to patients who require correction of more than three diopters or patients whose likelihood of becoming distance vision spectacle independent is low. Our findings should be cautiously applied to patients who require correction of more than three diopters or patients whose likelihood of becoming distance vision spectacle independent is low. Conclusion

12. 12 Alcon Laboratories Inc. 2008 Market Scope Reports. Alcon data on file. American Academy of Ophthalmology. Cataract in the Adult Eye, Preferred Practice Pattern. Available at: www.aao.org/ppp Accessed June, 2007. www.aao.org/ppp www.aao.org/ppp American Medical Association. CPT Code/Relative Value Search. Available at: https://catalog.amaassn.org/Catalog/cpt/cpt_search.jsp?_requestid=18642?checkXwho=done, Accessed August, 2008. https://catalog.amaassn.org/Catalog/cpt/cpt_search.jsp?_requestid=18642?checkXwho=done, Center for Disease Control and Prevention. US Life tables. Available at: http://www.cdc.gov/nchs/data/hus/hus07.pdf#027. Accessed August, 2008. http://www.cdc.gov/nchs/data/hus/hus07.pdf#027 Center for Medicare and Medicaid Services. Ambulatory Surgical Payments. Available at:http://www.cms.hhs.gov/ASCPayment/01_Overview.asp. Accessed August, 2008. http://www.cms.hhs.gov/ASCPayment/01_Overview.asp Department of Health and Human Services. Ruling No. CMS-1536-R. Jan.22, 2007. Dick HB, Dell S. Single optic accommodative intraocular lenses. Ophthalmol Clin North Am 2006; 19(1):107- 24. Gills JP. Treating astigmatism at the time of cataract surgery. Curr Opin Ophthalmol 2002; 13(1):2-6. Mendicute J, Irogoyen C, Aramberri J, Ondarra A, Montes-Mico R. Foldable toric intraocular lens for astigmaticsm correction in cataract patients. J Cataract Refract Surg 2008; 34(4):601-607. Ruhswurm I, Scholz U, Zehetmayer M, Hanselmayer G, Vass C, Skorpik C. Astigmatism correction with a foldable toric intraocular lens in cataract patients. J Cataract Refract Surg 2000; 26(7):1022-1027. References