1. What is the “Real” Value of Personalized Medicine for Cancer Care?
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…
Nutshell

7. …To Understand Health Policy Issues…
Apply toolbox to understanding health policy issues
How to balance 3 key issues in HC:
The need to provide access to care – fairness in who gets what care
The need to have high quality care – people get care they need
But also need to be efficient by focusing on high value care - don’t waste resources
My field called HSR – study of how we organize, deliver, & pay for HC
- HS researchers work with basic & clinical scientists to solve health policy problems

8. …In the Brave New World of New Technologies & Personalized Medicine
Specific focus: Taking toolbox and applying it to emerging technologies
Personalized/precision medicine – the study of how to target health care to patients based on their genetics
- Question: How do we take new discoveries about the genetic nature of disease and actually use them to improve patient outcomes – while also doing what’s right for our health care system and society?

9. Wearing Four Hats Academia Industry Government Patients & Providers
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To Do Research – 4 Hats
*Academia: Main hat – fortunate to have training in both HSR – UCB - and policy analysis – Harvard
* Patients & Providers: W/o these wouldn’t need health care
* Government: Govt & research groups drive much health policy
Institute of Medicine, President’s Council of Advisors on Science and Technology, GenomeCanada, Food and Drug Administration
 *Industry: W/o industry, wouldn’t have anyone to produce or to pay for new technologies
Investors – VCs
Developers – biotech, dx, Pharma
Payers – health plans
Government

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

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

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
# of payers
BCBS TEC  10
USPSTF  9
ICER  7
Hayes  5
EGAPP  5
ECRI  3
UP-TO-DATE  2
Total per payer 7 6 5 3 2 1 18

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

20. Many Different Types of Sequencing
Single Gene Testing
Gene Panels
Whole Exome Sequencing
Whole Genome Sequencing
- Inherited/germline vs. acquired/somatic
- Disease specific vs. general genomic medicine

21. Tumor vs. Germline Sequencing
Tumor sequencing
“Person” sequencing – germline
Individual tumor targets
Tumor Sequencing panels
Whole genome sequencing
Multi-gene susceptibility panels
Whole tumor –ome sequencing
Incidental findings
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. Mutation inhibiting beta-blockers – but fatal illness?
2008, $1.5M, 4 months
Mutation inhibiting beta-blockers – but fatal illness?
8 babies in extended family died before sequencing identified cause
2011, $100K
Money well-spent?
Sequencing found genetic risk for diabetes – but then couldn’t get life insurance
DNA pioneer James Watson, 1st full nextgen sequencing 2008, $1.5M, 4 months
Found he had mutation making BB’s ineffective
Initially told he had mutation for terminal illness and should be dead – but mistake
Steve Jobs before died in 2011 had sequencing for $100K – DNA and tumor – pancreatic cancer
Michael Snyder – Stanford – found predisposition to diabetes & changed lifestyle – but then couldn’t buy life insurance

24. Cost of Whole Genome Sequencing is Falling
Can now sequence entire genome
$100M in 2001 to almost $1K in 2012
Example - Steve Jobs - $100K before he died in 2011
Bottleneck is no longer technology – but what to DO with information
WGS provides different types of info
Have disease right now that can be treated – really want to know
Terrible disease that will kill you in your prime – and there is no tx – maybe you don’t want to know
Lots of info that tells you that you have something – but we have no idea what to do about it!

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%
Patients and providers must evaluate tradeoffs between the benefits and risks of information that may be useful but also may be complex, confusing, and potentially misleading.
Health care decision makers must evaluate tradeoffs between their mission to cover medical care that is clinically useful but that is not investigational, and the likelihood that WGS will lead to ineffective and unnecessary care.
Society must evaluate tradeoffs inherent in fairly allocating both the benefits and harms among various stakeholders in developing health policies and in assessing the costs and effectiveness of WGSs

29. Will We Open Pandora’s Box?
Emerging Debate:
Will We Open Pandora’s Box?
Clinically actionable
WGS Test
No WGS
Test
Outcomes
Treatment Decisions
WGS testing Decision
No additional information
Not directly clinically actionable
Unknown or no clinical significance
Health Benefits
Costs
Tests
Anxiety
Regret
Side Effects
Treat
Do Not Treat
Types of Information
Ex’s: (1) BRCA, Lynch (2) Alzheimer’s, Huntington’s

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