The biotech caused a stir this month after restricting distribution of its Avastin cancer med, which is widely used to treat wet macular degeneration, even though the drug was never approved for that purpose. At the time, Genentech planned to halt sales to compounding pharmacies, citing FDA concerns about contamination when an Avastin vial is split into different doses. Opthalmologists, however, complained the move will hurt patients - the alternative is Genentech’s newer Lucentis, which is approved for the eye disease, but costs 40 times as much, or about $2,000.

The decision renewed criticism that Genentech is trying to steer business toward Lucentis at the expense of patients, especially since the biotech won’t study Avastin for the eye disease (but the NIH is doing so). For instance, Herb Kohl, the Democrat from Wisconsin who chairs the Senate’s Special Committee on Aging, wrote Medicare that he’s worried the move will cost taxpayers a great deal of money.

And so yesterday, the biotech delayed its plans - the restrictions will begin January 1 instead of November 30, according to a letter posted on its website.

“Genentech’s decision was not motivated by a desire for increased profits,” the company wrote…

“We did not and do not expect that this change in policy toward compounding pharmacies will lead to any increase in Lucentis sales. Further, we expect Avastin to be available and that physicians will continue to prescribe it for ocular indications.” The biotech explained that it had to destroy 350,000 Avastin vials after an FDA inspection because standards weren’t met for use in eyes. (Sounds like the FDA inspectors were acting on the practical reality, but we have only Genentech’s word at the moment). That cost Genentech about $200 million in lost sales, because the product supposedly did meet standards for use in cancer patients.

To appease upset docs, Genentech senior execs last week met with reps from the American Academy of Ophthalmology and the and American Society of Retina Specialists. And the biotech agreed not only to rolling back the start date on the restrictions, but also to reinstate its supply of Avastin to compounding pharmacies if the FDA gave the company legal and regulatory authorization to do so. Will Genentech pursue this? Not clear. UPDATE: A Genentech spokeswoman tells us the biotech hasn’t committed to seeking FDA clearance.

The biotech, by the way, also says it’s looking to create patient assistance program for Avastin and Lucentis patients with different eye problems.

Hat tip to WSJ Health Blog