Value of Personalized Medicine: What is it? How to measure it? Why care? Kathryn A. Phillips, PhD Professor of Health Economics & Health Services Research Director & Principal Investigator Center for Translational & Policy Research on Personalized Medicine (TRANSPERS) University of California, San Francisco e

What have we learned about adoption of personalized medicine? Value Evidence What needs to occur for personalized medicine to be adopted? Value Evidence

What have we learned about adoption of personalized medicine?

Value

Evidence

What needs to occur for personalized medicine to be adopted?

Value

Evidence

Key Challenges for Personalized Medicine Aligning Incentives for Maximal Benefit & Efficiency Balancing Regulation & Innovation Designing Appropriate Reimbursement Policies Building an Evidence Base Measuring & Demonstrating Value

Aligning Incentives for Maximal Benefit & Efficiency

Balancing Regulation & Innovation

Designing Appropriate Reimbursement Policies

Building an Evidence Base

Measuring & Demonstrating Value

Today’s Discussion Understanding perspectives Defining and measuring “value” Two case studies HER2 testing for trastuzumab (Herceptin) Gene expression profiling for breast cancer recurrence (Oncotype and Mammaprint)

Understanding perspectives

Defining and measuring “value”

Two case studies

HER2 testing for trastuzumab (Herceptin)

Gene expression profiling for breast cancer recurrence (Oncotype and Mammaprint)

Understanding Perspectives

VALUE FDA Public Payers Government/Evidence Groups/”Society” Industry Patients “ Value” is in Eyes of Beholder Physicians Private Payers PBMs Employers

Goal : Develop evidence of how personalized medicine can be translated to improve health outcomes Focus: Breast and colorectal cancer initially The Center for Translational and Policy Research on Personalized Medicine

Academia Stakeholders Society

Critical Questions for the Center Translation into improved health outcomes requires evidence on: Who has access to the newest technologies ? Do the underserved have equal access ? What approaches do patients & providers prefer ? What interventions have the most value ? How can research be translated to the real world ?

Translation into improved health outcomes requires evidence on:

Who has access to the newest technologies ?

Do the underserved have equal access ?

What approaches do patients & providers prefer ?

What interventions have the most value ?

How can research be translated to the real world ?

Private Payer Perspective TRANSPERS Reimbursement Board Senior executives 6 of 7 largest US private health plans Regional plans Others, e.g., PBM, self-insured employers, consultants Blue Shield of CA Foundation & NIH funding 2006 – ongoing Three meetings & multiple interviews

TRANSPERS Reimbursement Board

Senior executives

6 of 7 largest US private health plans

Regional plans

Others, e.g., PBM, self-insured employers, consultants

Blue Shield of CA Foundation & NIH funding

2006 – ongoing

Three meetings & multiple interviews

Challenges to Establishing Value

“ Poor Step-Child” Diagnostic industry historically “secondary” to pharma industry – but no longer Oncotype is “darling” Integration of historically divided industries & regulatory mechanisms Focus on diagnostics in drug development

Diagnostic industry historically “secondary”

to pharma industry – but no longer

Oncotype is “darling”

Integration of historically divided industries & regulatory mechanisms

Focus on diagnostics in drug development

“ Flying Under the Radar ” Reimbursement system is challenging Traditionally not “value-based” reimbursement for diagnostics Personalized medicine can be either “screening” or “diagnosis” or both Payers want evidence of value - but can’t track use & outcomes of diagnostics

Reimbursement system is challenging

Traditionally not “value-based” reimbursement for diagnostics

Personalized medicine can be either “screening” or “diagnosis” or both

Payers want evidence of value - but can’t track use & outcomes of diagnostics

“ The Black Box” Little data on clinical utility of diagnostics Few economic analyses Linking targeting to improved outcomes Testing then treatment then outcomes Impact on family members

Little data on clinical utility of diagnostics

Few economic analyses

Linking targeting to improved outcomes

Testing then treatment then outcomes

Impact on family members

Wall Street Journal FRIDAY, JANUARY 4, 2008 Bad Cancer Tests Drawing Scrutiny

HER2/neu testing for Herceptin Clinical Practice Patterns and Cost-Effectiveness of HER2 Testing Strategies in Breast Cancer Patients. Phillips KA, Marshall DA, Haas JS, Elkin EB, Liang SY, Hassett MJ, Ferrusi I, Brock JE, Van Bebber SL , 2009

~ 30% of breast cancer patients overexpress HER2/neu and can benefit from Herceptin Testing is required to determine who can benefit Herceptin a clinical success – but gaps remain in translation Oldest Example of Personalized Medicine Portends Promises & Challenges

~ 30% of breast cancer patients overexpress HER2/neu and can benefit from Herceptin

Testing is required to determine who can benefit

Herceptin a clinical success – but gaps remain in translation

Evidence Gap: Who Tested? NO data on uninsured, Medicaid recipients, or minorities 2/3 of eligible Medicare patients had no documentation of testing in claims records

NO data on uninsured, Medicaid recipients, or minorities

2/3 of eligible Medicare patients had no documentation of testing in claims records

Implementation Gap: Accuracy? Substantial percentage of HER2 tests performed by community laboratories are inaccurate 20% inaccurate based on comparison to central labs

Substantial percentage of HER2 tests performed by community laboratories are inaccurate

20% inaccurate based on comparison to central labs

Translation Gap: Treatment? - Patients may receive Herceptin despite test results Large health plan data: up to 20% of patients

- Patients may receive Herceptin despite test results

Large health plan data: up to 20% of patients

Economic Gap: Efficiency? No analyses of most efficient testing strategies Cost-effectiveness studies assume perfect testing

No analyses of most efficient testing strategies

Cost-effectiveness studies assume perfect testing

“ Oncotype DX is the most commercially successful genomic based prognostic test to date”

Gene Expression Profiling Tests To determine risk of recurrence & benefit from chemotherapy for breast cancer Adoption & coverage spanned several years Two studies Factors influencing adoption Factors influencing coverage decisions

To determine risk of recurrence & benefit from chemotherapy for breast cancer

Adoption & coverage spanned several years

Two studies

Factors influencing adoption

Factors influencing coverage decisions

Factors Influencing Adoption Test characteristics Sample collection: ease & availability Adequate test performance Clinical characteristics Clinical need Highly visibility study results Recommendations Market factors Reimbursement strategy Lack of regulation Cost-effectiveness analyses

Test characteristics

Sample collection: ease & availability

Adequate test performance

Clinical characteristics

Clinical need

Highly visibility study results

Recommendations

Market factors

Reimbursement strategy

Lack of regulation

Cost-effectiveness analyses

Factors Influencing Coverage All consider clinical utility – impact on outcomes – as primary determinant Although definition & interpretation varies All consider market factors But which factors & when varies Payers must consider how market factors intersect w/ clinical utility Patient & provider demand Regulatory issues Guidelines Other payers Economic issues

All consider clinical utility – impact on outcomes – as primary determinant

Although definition & interpretation varies

All consider market factors

But which factors & when varies

Payers must consider how market factors intersect w/ clinical utility

Patient & provider demand

Regulatory issues

Guidelines

Other payers

Economic issues

Tip of the Iceberg ASCO 2009: New Oncotype DX Assay Predicts Risk for Recurrence in Stage 2 Colon Cancer ASCO Supports KRAS Testing Before Anti-EGFR Therapy (1/15/09)

ASCO 2009: New Oncotype DX Assay Predicts Risk for Recurrence in Stage 2 Colon Cancer

ASCO Supports KRAS Testing

Before Anti-EGFR Therapy (1/15/09)

Conclusion Inevitable trend Evidence of value is critical to adoption But “slippery” What you see depends on where you sit Increasingly available “ There’s a wonderful rule of thumb for American health care: Shift happens” Uwe Reinhardt

Inevitable trend

Evidence of value is critical to adoption

But “slippery”

What you see depends on where you sit

Increasingly available

“ There’s a wonderful rule of thumb for American health care: Shift happens”

Uwe Reinhardt