TRANSFORMING PATHOLOGY: Emerging technology driving practice innovation

1. TRANSFORMING PATHOLOGY:Emerging technology driving practice innovation

2. Personalized Medicine & Pathology Friend or Foe? Mara G. Aspinall CAP Foundation Chicago, Illinois June 7, 2008

3. Personalized Medicine- Friend or Foe? • What is it? • Why now? • When will it be real? • Call to Action for Pathologists

4. Personalized Medicine Old Paradigm: Trial and Error Medicine Successful When it Leads to Innovation and Improves Standard of Care. Fails When We Settle for “Trial and Error” Medicine AS the Standard of Care.

5. Personalized Medicine New Paradigm: Personalized Medicine Linking Tests to Action and Therapy PredictableResponse Observation Test Action Breaking The Cycle of Trial and Error Medicine

6. Personalized Medicine Why is it Important? DiagnosisSaveLives DiagnosisSaveMoney

7. Personalized Medicine Test Categories

8. 100 Years Ago 80 Years Ago “Disease of the Blood” 60 Years Ago Leukemia or Lymphoma Chronic LeukemiaAcute Leukemia Preleukemia Indolent Lymphoma Aggressive Lymphoma Today 38 Leukemia types identified: Acute myeloid leukemia (12 types) Acute lymphoblastic leukemia (2 types) Acute promyelocytic leukemia (2 types) Acute monocytic leukemia (2 types) Acute erythroid leukemia (2 types) Acute megakaryoblastic leukemia Acute myelomonocytic leukemia (2 types) Chronic myeloid leukemia Chronic myeloproliferative disorders (5 types) Myelodysplastic syndromes (6 types) Mixed myeloproliferative/myelodysplastic syndromes (3 types) 51 Lymphomas identified: Mature B-cell lymphomas (14 types) Mature T-cell lymphomas (15 types) Plasma cell neoplasm (3 types) Immature (precursor) lymphomas (2 types) Hodgkin’s lymphoma (5 types) Immunodeficiency associated lymphomas (5 types) Other hematolymphoid neoplasms (7 types) Personalized Medicine Saves Lives 5 Year Survival ~ 0% 70% Ries LAG, Eisner MP, Kosary CL, Hankey BF, Miller BA, Clegg L, Mariotto A, Feuer EJ, Edwards BK (eds). SEER Cancer Statistics Review, 1975-2002, National Cancer Institute. Bethesda, MD, http://seer.cancer.gov/csr/1975_2002/, based on Nov 2004 SEER data submission, posted to the SEER web site 2005.

9. Molecular CharacterizationStandard Practice In Hematologic Oncology Morphology Evaluation + Fluorescence-Activated Cell Sorting + Cytogenetic Analysis + Molecular Analysis Expanded Characterization and Response Prediction Identification of t(15;17) translocation in AML patients leads to specific treatment (ATRA) which changed the overall survival from 0% 40 years ago to 80% now

10. Personalized Medicine Reduces Ineffective Treatment in Colon Cancer Do Not Treat     kras Testing             Treat with Erbitux             Treat with Erbitux Treatment Success                Langreth, R. (2008), ‘Imclone’s Gene Test Battle’, Forbes.com, 16May

11. Personalized Medicine is Cost Effective in Treatment of Colon Cancer • 60% reduction in cost per success • 40% of patients spared side effects from ineffective treatment • Overall success rate is unchanged at 25% Langreth, R. (2008), ‘Imclone’s Gene Test Battle’, Forbes.com, 16May

12. Personalized Medicine is Beneficial in Treatment of Pancreatic Cancer Watch And Wait Increased Risk Two Bad Choices Suspected Pancreatic Cancer Pancreatectomy Insulin Insufficiency 30% Pancreatic Cancer Treat Aggressively Suspected Pancreatic Cancer PathFinderTG Diagnostic Informed Choices Benign Condition Do Nothing 70% Rina Wolf Testimony before House Committee on Small Business, Subcommittee on Regulations, Healthcare and Trade, May 14, 2008

13. Patients Don’t Have Time for Trial & Error 93% 2007 USRDS Annual Data Report Levy, et. al., Long-term trends in the incidence and survival from heart failure, NEJM, 2002; 347(18):1397-402 CancerMpact, MattsonJack; NCI SEER data, average across all stages at Dx

14. Personalized Medicine- Friend or Foe? • What is it? • Why now? • When will it be real? • Call to Action

15. Why Now? The Human Genome Project

16. Why Now? Explosion of the “Omics” • Proteomics • Allergenomics • Bibliomics • Biomics • Cardiogenomics • Cellomics • Chemogenomics • Chemoproteomics • Chromatinomics • Chromonomics • Chromosomics • Combinatorial Peptidomics • Computational RNomics • Cryobionomics • Crystallomics • Cytochromics • Cytomics • Degradomics • Ecotoxicogenomics • Eicosanomics • Embryogenomics • Enviromics • Epigenomics • Epitomics • Expressomics • Fluxomics • Fragmentomics • Fragonomics • Etc… http://www.genomicglossaries.com

17. Why Now?Diagnostic Technology Has Improved Past – Macro Level Testing Tests differentiated disease from non-disease Disease defined by location and size Today – Molecular Level Testing Disease defined by individual biology and /or DNA of tumor or virus Tests to subcategorize disease: predict outcomes of specific therapeutic screen for adverse events monitor disease

18. Why Now?Diagnostic Technology Has Improved Tomorrow – Predictive Testing Multiple technology platforms needed for higher analytic validity Multi-factorial testing for common, complex diseases Multi-gene signatures as standard for cancer New Sample Types – Urine, Saliva, Breath, others? Increased Use of Diagnostic Imaging

19. Why Now: Increased Government Interest • FDA • In-vitro Diagnostic Multivariate Index Assay (IVD MIA) Draft Guidance • Pharmacogenomics voluntary data submission • HHS Secretary’s Committee on Genetics, Health and Society (SACGHS) • Report recommending filling gaps in oversight of genetic tests • President’s Council on Science and Technology • Upcoming Report of Personalized Medicine

20. Personalized Medicine- Friend or Foe? • What is it? • Why now? • When will it be real? • Call to Action for Pathologists

21. The Personalized Medicine Timeline Fear Value Acceptance

22. The Personalized Medicine Timeline Fear Payers: Adds to My Cost Without Return Treating Physicians: Too Prescriptive for Me Patients:Will I Be Denied Access to New Drugs? Regulators:How Do We Handle New Complexities? Diagnostics: More Tests With Poor Reimbursement Pharma: Reduces My Market Pathologists:Reduces My Market

23. Pharma FearSpending Up but New Drug Approvals Not Pharmaceutical Research and Manufactures of America: Pharmaceutical Industry Profile 2006 www.fda.gof/oc/initiatives/criticalpath/whitepaper.html

24. Pharma FearBlockbusters Going Off Patent • 105 blockbuster drugs with $237 billion in sales • 37 % of all prescription pharmaceutical sales • 7 of the top 10 drug launches in 2006 were generics Big Pharma Faces Grim Prognosis, Wall Street Journal, 12/06/2007 Cowen and Company

25. Pharma Fear (and Opportunity) Drug Efficacyis Too Low Therapeutic Area Effective Rate (%) 25% Spears et al. TRENDS in Molecular Medicine Vol. 7 No. 5 May 2001

26. Pharma Fear (and Opportunity) Adverse Events are Too High • 2.2 Million People Impacted Annually • $177 billion annual cost • Single largest cause of drug market withdrawals National Vital Statistics Reports, Vol. 56, No. 10, March 7, 2008, 2001United States Data

27. Pharma Fear (and Opportunity)Prescription Compliance is Too Low Source: American Heart Association

28. Pharma Fear (and Opportunity) Drug Reimbursement System Changing? • Reimbursement ONLY if patient benefits from drug • REFUND if patient does not benefit after treatment • Current Examples: • Velcade for multiple myeloma • Johnson & Johnson and Government Payors in UK and France • Full refund to payor if patient does not achieve 50% biomarker reduction • Oncotype DX • Genomic Health and United Healthcare • Price adjusted if tests do not show change in clinical practice Pricing Pills by the Results, New York Times, July 14, 2007

29. Velcade For Multiple Myeloma • Protocol • Patient is treated with a maximum of 4 cycles of treatment ($24,800 US) • Serum M protein, a biomarker for tumor load, is monitored with blood or urine test Electrophoresis: Normal plasma Serum M protein www.nytimes.com/2007/07/14/business/14drugprice.html?_r=1&oref=slogin Nature Reviews, Drug Discover: December 2007, v 6, p 945 www.nice.org.uk/nicemedia/pdf/MyelomaDofHSummaryResponderScheme.pdf

30. Velcade For Multiple Myeloma • Biomarker is linked to drug efficacy • Biomarker results are then linked to payment • Complete response (CR): minimal / no serum M protein - PAID • Partial response (PR): > 50 % reduction of serum M protein – PAID • Minor or Minimal response (MR): < 50 % reduction of serum M protein - REFUND www.nytimes.com/2007/07/14/business/14drugprice.html?_r=1&oref=slogin Nature Reviews, Drug Discover: December 2007, v 6, p 945 www.nice.org.uk/nicemedia/pdf/MyelomaDofHSummaryResponderScheme.pdf

31. Pathologist Fear? New Sample TypesBeyond Tissue • Molecular Blood Tests • Breath Tests • Urine Tests

32. Pathologist Fear? New Technology Trumps Morphology Currently, 17 % of Burkitt Lymphoma are incorrectly diagnosed as Diffuse Large B Cell Lymphoma Classic Burkitt Lymphoma Atypical Burkitt Lymphoma Diffuse Large B Cell Lymphoma Source: Louis Staudt, MD, PhD. National Cancer Institute

33. Diffuse Large B-cell Lymphoma Burkitt Lymphoma Atypical Classic Pathologist Fear? New Technology Beyond Morphology Gene Expression Differentiates Burkitt Lymphoma from Diffuse Large B Cell Lymphoma, Improving Patient Care Louis Staudt, MD, PhD, National Cancer Institute

34. Pathologist Fear?Molecular Tests are Exploding Source: In Development – Coalition for 21st Century Medicine Survey 2007

35. Venture Capital is focused on DX Increased Venture Capital Spending Nature Biotechnology Volume 24 Number 8 August 2006, BioCentury's BCIQ, Genzyme Analysis

36. Pharma and Pathologist Fear and Opportunity FDA Stance On Valid Genomic Biomarkers In The Context of Approved Drug Labels • Drugs with Labels Containing Pharmacogenomic Information – 121 • Drugs with Tests Required - 2 • Drugs with Tests Recommended - 3 • Drugs with Tests for Information Only – 16 • Drugs with No Test Mentioned – 100 Clinical Ligand Assay Society 32nd International Meeting Louisville, KY May 22, 2006 Felix W. Frueh, PhD Associate Director for Genomics, Office of Clinical Pharmacology CDER/FDA

37. Personalized Medicine- Friend or Foe? • What is it? • Why now? • When will it be real? • Call to Action

38. Call to Action Need to Capture the Future

39. Call to ActionFriend or Foe? Personalized Medicine Needs to be a Friend Pathologists Need to : - Own Personalized Medicine - Source of expertise on all tests available - Interpreter and consolidator of all test results - Educator of all other physicians on diagnosis Move Industry from Fear to Acceptance

40. Moving From Fear To Acceptance • Physician Education • Data – Integration into the EHR / EMR • Policy – Reimbursement and Regulatory Aspinall and Hamermesh, Harvard Business Review, Oct 2007

41. Move From Fear to Acceptance • Physician Education • Build commitment through education for community physicians • Publish new PM practice guidelines – tests and technologies • Data & Integration into EHR • Create Convincing Data on the positive outcomes and health economics of appropriate use of PM diagnostics • Leadership in the build of the EHR / EMR • Policies Needed • Reimbursement based on value rather than activity • Regulatory options that encourage diagnostic and drug combinations • Embrace “Era of Diagnostics” For Improved Outcomes

42. Move From Fear to Acceptance • Physician Education – PATHOLOGIST LEAD • Build commitment through education for community physicians • Publish new PM practice guidelines – tests and technologies • Data & Integration into EHR – PATHOLOGIST LEAD • Create Convincing Data on the positive outcomes and health economics of appropriate use of PM diagnostics • Leadership in the build of the EHR / EMR • Policies Needed – PATHOLOGIST LEAD • Reimbursement based on value rather than activity • Regulatory options that encourage diagnostic and drug combinations • Embrace “Era of Diagnostics” For Improved Outcomes

43. Call to Action • Opportunities… • Expand scope of practice • Increase impact on patient treatment • Institutional Knowledge Coordinator • Cutting edge expertise • Leadership in Personalized Medicine • – it is here to stay

44. Future Health Care Spending Individual Health Care Spending Curve Current Practice Improved Quality of Life & Financial Savings Health Care $ Potential of Personalized Medicine Investment In Diagnostics And Prevention Years Source: Deloitte Development LLC 2006

45. Acknowledgements • David Turnquist, Boston College • Deloitte Center for Health Solutions • Personalized Medicine Coalition

47. TRANSFORMING PATHOLOGY:Emerging technology driving practice innovation