Value of Personalized Health Care

Value of Personalized Medicine:Value of Personalized Medicine:What is it?What is it?

How to measure it?How to measure it?Why care?Why care?

Kathryn A. Phillips, PhDProfessor of Health Economics & Health

Services Research

Director & Principal Investigator Center for Translational & Policy Research Center for Translational & Policy Research

on Personalized Medicine (TRANSPERS)on Personalized Medicine (TRANSPERS)

University of California, San Francisco

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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

1. Aligning Incentives for Maximal Benefit & Efficiency

2. Balancing Regulation & Innovation3. Designing Appropriate Reimbursement

Policies4. Building an Evidence Base5. 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

VALUE

FDA

Public Payers

Government/Evidence Groups/”Society”

Industry

Patients

“Value” is in Eyes of Beholder

Physicians

Private PayersPBMs 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?

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

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

“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

“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

Wall Street JournalFRIDAY, 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

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

Implementation Gap: Accuracy?

• 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

Economic Gap: Efficiency?

• 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

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

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

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)

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