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

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?

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?

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

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

Using Toolbox of Social Science Approaches & Methods… Nutshell

…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

…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?

Wearing Four Hats Academia Industry Government Patients & Providers {animation} 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

What is the value of personalized medicine in cancer care?

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

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

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

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.

How are payers considering coverage and reimbursement policies?

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

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

How may new sequencing technologies change the playing field?

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

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

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

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

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!

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

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

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?

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

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

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

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