”Show Me the Money ” What is the “Real” Value of Personalized Medicine for Cancer Care ?

1. School of Pharmacy ”Show Me the Money” What is the “Real” Value of Personalized Medicine for Cancer Care? Kathryn A. Phillips PhD Professor of Health Economics and Health Services Research  Director and Founder, UCSF Center for Translational and Policy Research on Personalized Medicine University of California, San Francisco

2. Today’s Conversation • What is the value of personalized medicine in cancer care? • How are payers considering coverage and reimbursement policies? • How may new sequencing technologies change the playing field?

3. 2008: TRANSPERS Born • Objective: Develop evidence of how personalized medicine can be beneficial and efficient • Who has access to the newest technologies? • How do patients and providers make decisions about using personalized tests or drugs? • What information do insurers need to make the most appropriate decisions about coverage policies? • How can we design better policies to encourage the most effective use of technologies?

4. TRANSPERS Talks with Payers to Understand Reimbursement • Evidence & Reimbursement Council • Founded 2007 • Senior executives: • All 7 largest US plans & leading regional plans • Thought leaders with industry (bio, pharma, lab, PBMs), government, & Medicare perspectives • Semi-annual meetings • Funded by multiple NIH grants & foundations

5. Why is a Health Economist/Health Services Researcher Working on Personalized Medicine?

6. Using Toolbox of Social Science Approaches & Methods…

7. …To Understand Health Policy Issues…

8. …In the Brave New World of New Technologies & Personalized Medicine

9. Wearing Four Hats Academia Patients & Providers Industry Government

10. What is the value of personalized medicine in cancer care?

11. Shifting Industry Paradigms Determining Value & Reimbursement Balancing Innovation & Regulation Building Evidence Base Challenges/Opportunities for Personalized Medicine

12. Research on HER2/neu Testing for Herceptin – Paradigm for the Future 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

13. Translating HER2 Testing to Practice & Policy No data on uninsured, Medicaid recipients, or minorities Up to 20% of negative women still get Herceptin ~20% of IHC tests at community labs may be inaccurate Cost-effectiveness analyses assume perfect testing Some women get IHC, some FISH, some both Claims & medical records for testing do not match 25% of time 60% of positive women – esp. lower income – do not get Herceptin

15. Summary of policy implications • Information on clinical utility, economic value, affordability, and public health implications is essential for appropriately assessing new technologies. • Methods are needed to prioritize and conduct early and rapid assessments of clinical utility and economic value, before widespread adoption of new technologies. • It is critical to consider the true value of diagnostics and not impede the need for innovation because of the need to consider economic value. • Balancing innovation and affordability is a shared responsibility.

16. How are payers considering coverage and reimbursement policies?

17. Long Adoption Curve for Plan Coverage for OncotypeDx • OncotypeDX took four years to be adopted by all payers • Payers considered same evidence but weighted factors differently • Tipping points: • How clinical evidence interpreted • Health care system factors (patient & provider demand, Medicare coverage, guidelines) • Lack of FDA approval not deal-breaker

18. Variation in Health Technology Assessments Used by Payers

19. How may new sequencing technologies change the playing field?

20. Many Different Types of Sequencing - Inherited/germline vs. acquired/somatic - Disease specific vs. general genomic medicine

21. Tumor vs. Germline Sequencing “Person” sequencing – germline Tumor sequencing Whole genome sequencing Multi-gene susceptibility panels Individual tumor targets Tumor Sequencing panels Incidental findings Whole tumor –ome sequencing Individual gene tests

22. Sequencing = Sequencing Sequencing of tumors for immediate treatment decisions using established gene panel to look for variants with known clinical utility VS Sequencing in general population to look for any variants that may be predictive of future risk of disease regardless of lack of any known clinical utility for those variants

23. 2008, $1.5M, 4 months Mutation inhibiting beta-blockers – but fatal illness? 8 babies in extended family died before sequencing identified cause Sequencing found genetic risk for diabetes – but then couldn’t get life insurance 2011, $100K Money well-spent?

24. Cost of Whole Genome Sequencing is Falling

25. Emerging Debates: Should Sequencing Be Widely Used? “We will only achieve the promises of sequencing if the information gathered is “useful, cost-effective, and welcomed” • Jim Evans, Science, 2011

26. Emerging Debates:Who Will Pay? “It would be very, very challenging to collect and analyze enough information to convince CMS that whole-genome sequencing should be covered by Medicare” • Jeffrey Roche, CMS medical officer, 2011

27. Emerging Debates:Who Will Decide What Results are Returned? • Whole genome sequencing will find “incidental” or secondary findings that are not the primary reason for testing • Patients should decide prior to testing? OR • Experts should determine a standard set of results to be returned based on evidence of clinical utility?

28. TRADE-OFFS: No Free Lunch • Would you get sequenced if no cost? • 81% • Would you want to know everything? • 74%

29. Emerging Debate: Will We Open Pandora’s Box? Treatment Decisions Types of Information Outcomes Treat Health Benefits Costs Tests Anxiety Regret Side Effects Clinically actionable Do Not Treat WGS Test Not directly clinically actionable WGS testing Decision Unknown or no clinical significance No WGS Test No additional information

30. Initial Findings about Sequencing Reimbursement • Payers are very interested in sequencing • Game-changing technology • Concerns: • Complexity • Clinical utility & potential costs • Is sequencing just a bundle of tests • How will be delivered – infrastructure, stored results, pan-cancer/off-label uses • Distinguishing research vs. clinical use

31. Our Ongoing NIH Study: Benefit-Risk Tradeoffs for Genomic Sequencing • What matters to patients and physicians when they make decisions about sequencing? • How can payers, guideline organizations, & society facilitate appropriate & efficient use of sequencing? • With Harvard Medical School MedSeq study • Conducting 1st RCT of whole genome sequencing in general population