Economic Aspects of Personalised Health Care

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1 Economic Aspects of Personalised Health Care Thomas D. Szucs European Center of Pharmaceutical Medicine, University of Basel

2 Disclaimer The explanations, opinions and facts expressed relate to the personal point of view of the lecturer. The perspective hereby represented does not particularly correspond to the official point of view of Helsana and is accordingly not binding in any way for Helsana. 2

3 Overview 1. What is PM? 2. What are the benefits of PM? 3. Why health economics? 4. Is PM costeffective? 5. What lies ahead? 4

4 Welcome to the Tower of Babel 5

5 Three definitions of personalized medicine Definition 1 The use of combined knowledge (genetics, or otherwise) about a person to predict treatment response and thereby improve that person s health Definition 2 The use of combined knowledge (genetics, or otherwise) about a person to predict disease prognosis or treatment response and thereby improve that person s health Definition 3 The use of combined knowledge (genetics, or otherwise) about a person to predict disease susceptibility, disease prognosis or treatment response and thereby improve that person s health 5

6 Personalized medicine Identify risk factors Identify genetic or molecular basis of disease factors Prevent Treat 6

7 Diagnostic process Today Tomorrow 7

8 Overview 1. What is PM? 2. What are the benefits of PM? 3. Why health economics? 4. Is PM costeffective? 5. What lies ahead? 10

9 Potential benefits of PHC Increased certainty about diagnosis and mechanism of disease Improved estimation of patients risks of later outcomes (e.g., prognosis) which could influence treatment management decisions Better prediction of response to therapy or drug metabolism rates or a reduced potential for adverse events Reduced wastage of health resources associated with treating non-responders Improvement in the quality and cost-effectiveness of patienttailored treatment versus empirical approaches to prescribing 9

10 Potential economic consequences of PGx: Patient view Increased costs Higher drug prices Pharmacogenetic test costs Decreased costs Reduced likelihood of adverse events Avoidance of ineffective medication Improved medication compliance Improved health outcomes Deverka PA

11 Potential economic consequences of PGx: Provider/payor view Increased costs Higher drug prices Pharmacogenomic test costs (including costs of false positive and false negative tests) Decreased costs Reduced health care resource utilization Avoidance of treatment for those who don't need it Expanded patient population for drugs Expanded patent protection for drug and test combination Improved response rates for treatment of diseases Avoidance of unsafe medications Genetic test training, interpretation Decreased liability and malpractice Deverka PA

12 Potential economic consequences of PGx: Industry view Increased costs Decreased costs Higher development costs in short term (development and validation of biomarkers) Evolving regulatory environment (test approval process for diagnostics becoming more rigorous) Loss of blockbuster drug business model Cultural differences between drug and diagnostic industries Improved decision making and lower attrition Focused discovery and development programs Earlier approval of new therapies Greater confidence in postmarketing surveillance systems Expanded patient population for drugs Deverka PA

13 Stop using and paying stuff that does not work!!! 13

14 Overview 1. What is PM? 2. What are the benefits of PM? 3. Why health economics? 4. Is PM costeffective? 5. What lies ahead? 16

15 Why health economics? Because it lets us determine value-for-money 17

16 Skylla and Charybdis Expectations of improving health outcomes Rapidly changing regulatory and reimbursement environment Füssli,

17 From price to value Value = Benefit Price 22

18 It s so simple 23

19 Decision tree for modeling economic outcomes of a novel medicine-diagnostic combination 19

20 Gained life-years as denominator Cost-effectiveness = costs / life-year gained or Cost-utility = Costs per quality-adjusted life-year gained 25

21 Economic view on the value-table HIGHER relative value B D Acctepted value (price/costs) Incremental value C A LOWER relative costs Here economists are in heaven Incremental costs The economic reality HIGHER relative costs Potential adaptation LOWER relative value 26

22 Overview 1. What is PM? 2. What are the benefits of PM? 3. Why health economics? 4. Is PM costeffective? 5. What lies ahead? 27

23 How cost-effective is testing APC resistance among women who are starting to take oral contraceptives? 23

24 1996 Public health economic evaluation of screening for APC resistance (Leiden mutation) in new oral contraceptive users 24

25 Testing for APCR: clinical and economic impact Economic input (per women (in K Euros per year) Clinical impact (per women per year) With test Without Diff. test Testing Thrombosis Pulmonary embolism Avoided thrombosis 22 Avoided pulmonary embolism 3 Avoided death 0,24 Total costs Euro 22'000.- Net-investment 12 life-years gained 1 1: average life-expectancy of 50,25 years Szucs TD et al. Med Klin 1996; 91:

6233 5533 Colon cancer LETS ALL 1544 4500 LETS WH 682 0 5000 10000 15000 20000

26 League-table: APCR screening compared to other screening measures Osteoporosis Mammography Zervix Ca LETS ALL 9000 BATERS WH BATERS ALL Colon cancer LETS ALL LETS WH Cost per life-year gained Szucs TD et al. Med Klin 1996; 91:

27 Cost-effectiveness ratios according to type of tests used in PHC Type of test used Test to stratify for patients with potential adverse reactions Test to stratify for responders/nonresponders Base case ICER (USD/QALY gained) Test for disease prognosis Test for screening Hatz MHM,

28 Distribution of ICER s in 84 PHC studies Hatz MHM,

29 League-table of pharmacogenetic screening programs Study Gene Drug ICER You (2004) CYP2C9 Coumadin EUR 7 326/bleeding avoided Schafekamp (2006) CYP2C9 Coumadin EUR 4 233/bleeding avoided Desta (2002) CYP2C19 PPI Favourable Lehman (2003) CYP2C19 PPI Dominant Furuta (2007) CYP2C19 PPI Dominant Chou (2000) CYP2D6 Antipsychotics Undetermined Marra (2002) TPMT AZA Dominant Oh (2004) TPMT AZA Dominant Winter (2004) TPMT AZA GBP487/LYG Dubinskiy (2005) TPMT AZA Dominant Priest (2005) TPMT AZA Dominant Tavadia (2000) TPMT AZA Favourable Van den Akkeren (2006) TPMT 6-MP EUR 4 800/LYG Pedis (2005) Multiple Clozapine EUR /QALY Meckley (2006) α-adductin Thiazide Dominant Maitland van der Zee (2004) ACE Statins Dominant Costa (2007) ACE ACE inhibitors Dominant Kim (2006) MTHFR MTX Dominant Hughes (2004) HLA Abacavir Dominant to EUR /hypersensitivity reaction avoided Veenstra (2007) A1555G Aminoglycosides EUR 59759/QALY Vegter S et al. Pharmacoeconomics 2008; 26:

30 Cost-effectiveness of high profile drugs and companion diagnostics Drug Trastuzumab Cetuximab Imatinib Abacavir Irinotecan Erlotinib Cohen J 2013 Results 12 Peer-reviewed clinical- and/or cost-effectiveness studies with varied results: Cost-per-QALY* ranged from $ to $ Two peer-reviewed clinical- and/or cost-effectiveness studies: Both > $ cost-per-qaly 12 Peer-reviewed clinical- and/or cost-effectiveness studies with varied results: Cost-per-QALY ranged from $ to $ Four peer-reviewed clinical- and/or cost-effectiveness studies with varied results Cost-per-QALY ranged from <0 or cost-saving to $ Six peer-reviewed clinical- and/or cost-effectiveness studies with varied results All > $ cost-per-qaly Five peer-reviewed clinical- and/or cost-effectiveness studies with varied results Cost-per-QALY ranged from <0 or cost-saving to $

31 Cost-effectiveness in colon cancer KRAS and BRAF as the most cost-effective approach Blank P (2011) 31

32 Cost-effectiveness HER2 testing strategies in breast cancer Blank P (2010) 39

33 Test reimbursement policy Cohen DA

34 Dutch Pharmacogenetics Working Group Guidelines Swen JJ (2011) 34

35 Cost-effectiveness is dependent on three factors (1) Strength of intervention (2) Baseline risk... (3) follow up costs!! 36

36 Expected costs of treatment by strategy Lyman et al ; Cancer 2007 Lyman G,

37 Increase in oncology drug costs Jackson,

38 Example of gefitinib treatment : EUR 69 mio spared cost for the health insurance Calvo F; Institut National du Cancer,

39 Is personalized medicine costeffective? Yes! 40

40 Overview 1. What is PM? 2. What are the benefits of PM? 3. Why health economics? 4. Is PM costeffective? 5. What lies ahead? 51

Oscar Fingal O Flahertie Wills Wilde (1854 1900) "The past is of no importance.

41 Oscar Fingal O Flahertie Wills Wilde ( ) "The past is of no importance. The present is of no importance. It is with the future that we have to deal..." 42

42 Education and training A lot of clinicians don t know how to interpret genetic results. They know how to look at a graph of chemistry results. They know how to read a pathology report. But they actually don t know how to look at this data and to make decisions based on it. John Glaser, Chief Information Officer, Partners Healthcare 53

43 Survey on physician knowledge of pharmacogenomics Stanek EJ et al

44 Geographic distribution of CYP2C19 Sistonen J

45 Factors influencing payor adoption, coverage and reimbursment Strength of evidence drives payors' decisions about coverage and reimbursement Strength of evidence varies widely across type of PHC technology Professional society guidelines seem to strongly influence reimbursement Type of regulation and cost-effectiveness do not appear to be associated with reimbursement yet Modified from Meckley & Neumann; Health Policy

46 Conclusion Concluding remarks PM is a key opportunity for improving efficiency in health care provision and drug development Understanding the economics of PM is crucial Empirical evidence clearly demonstrates that PM is value-for-money Quality of genomic testing needs to be exceptional 47

47 Die Zukunft ist schon heute 48

48 Thank you for your attention 65

49 Questions 50

Personalised Healthcare. will it deliver? Bob Holland Head of Personalised Healthcare & Biomarkers Innovative Medicines AstraZeneca R&D

Personalised Healthcare. will it deliver? Bob Holland Head of Personalised Healthcare & Biomarkers Innovative Medicines AstraZeneca R&D Personalised Healthcare x will it deliver? Bob Holland Head of Personalised Healthcare & Biomarkers Innovative Medicines AstraZeneca R&D Personalised Healthcare It is delivering! Bob Holland Head of Personalised