Competing against cheap rivals -- even if they're not the exact same drug -- can be quite challenging. Pfizer's (NYSE: PFE) Lipitor took a major hit when Merck's (NYSE: MRK) Zocor went generic.

It's even worse when launching a new drug. Spectrum Pharmaceuticals' (Nasdaq: SPPI) Fusilev was slow to take off because a related generic was on the market and picked up steam only when generic-drug makers ran into shortages.

For Regeneron Pharmaceuticals (Nasdaq: REGN), getting its wet age-related macular degeneration treatment, Eylea, approved is only half the battle. The biotech and its marketing partner Bayer have to compete with Roche's Avastin, which isn't a generic but is cheap enough that it serves as the same type of roadblock.

That threat seems to be dissipating just in time for an approval. Yesterday, the Department of Veterans Affairs said it will stop using Avastin to treat wet age-related macular degeneration. Avastin is approved to treat cancer, but it's essentially the same drug as Roche's Lucentis, which is approved to treat the disease.

Doctors can split one vial of Avastin into multiple treatments, bringing the cost down to just $50 a dose, compared with $2,000 for Lucentis. But recent reports of serious infections -- probably resulting from contamination when the vial is split -- led the VA to reconsider saving a buck.

On the surface, this wouldn't seem like that big of a deal. I mean, really, of all the wet age-related macular degeneration patients in the U.S., how many are treated by the VA?

But that's not really the point. The VA's move should be seen as projection of things to come. The agency might influence other doctors, but the bigger point here is that it's a sign that doctors are heeding the Food and Drug Administration's warning about the infections a few weeks ago.

Assuming it's approved in November, Eyela will still have to compete with Lucentis. But it should be able to meet the price, and it's already proved as efficacious with fewer injections. Considering that the drug needs to be injected into the eye, that should be a huge selling point.

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Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Pfizer. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.