”Show Me the Money” What is the “Real” Value of

Personalized Medicine for Cancer Care?

Kathryn A. Phillips PhDProfessor 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

School of Pharmacy

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?

NCI (P01) NHGRI Aetna Foundation Blue Shield Foundation of CA

Department of Veterans Affairs UCSF Comprehensive Cancer Center UCSF CTSI

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…

…To Understand Health Policy Issues…

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

Academia

Wearing Four Hats

Government

Industry

Patients & Providers

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

~20% of IHC tests at community labs may be inaccurate

Claims & medical records for testing do not match 25% of time

Some women get IHC, some FISH, some both

Up to 20% of negative women still get Herceptin

60% of positive women – esp. lower income – do not get Herceptin

Cost-effectiveness analyses assume perfect testing

The economic value of personalized medicine tests: what we know and what we need to know

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

P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 # of payers

BCBS TEC 10

USPSTF 9

ICER 7

Hayes 5

EGAPP 5

ECRI 3UP-TO-DATE 2

Total per payer

7 6 6 5 3 3 3 3 2 2 1

How may new sequencing technologies change the playing field?

Many Different Types of Sequencing

Single Gene Testing

Gene PanelsWhole Exome Sequencing

Whole Genome Sequencing

- Inherited/germline vs. acquired/somatic

- Disease specific vs. general genomic medicine

Tumor vs. Germline Sequencing

“Person” sequencing – germlineTumor sequencing

Individual gene tests

Whole genome

sequencing

Multi-gene susceptibility

panels

Tumor Sequencing

panels

Individual tumor targets

Whole tumor –ome sequencing

Incidental findings

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

2008, $1.5M, 4 monthsMutation inhibiting beta-blockers – but fatal illness?

2011, $100KMoney well-spent?

8 babies in extended family died before sequencing identified cause

Sequencing found genetic risk for diabetes – but then couldn’t get life insurance

Cost of Whole Genome Sequencing is Falling

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%

Emerging Debate:Will We Open Pandora’s Box?

Clinically actionable

WGS Test

No WGS Test

OutcomesTreatment 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

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