CTAF Overview. Agenda. Evidence Review. Mepolizumab (Nucala, GlaxoSmithKline plc.) for the Treatment of Severe Asthma with Eosinophilia

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CTAF Overview Mepolizumab (Nucala, GlaxoSmithKline plc.) for the Treatment of Severe Asthma with Eosinophilia February 12, 2016 Core program of the Institute for Clinical and Economic Review (ICER) Goal: Help patients, clinicians, insurers, and policymakers understand and apply evidence to improve the quality and value of health care Deliberation and voting by CTAF Panel independent clinicians, methodologists, and public representatives Supported by grants from the Blue Shield of California Foundation, the California HealthCare Foundation, and the Laura and John Arnold Foundation 1 2 Agenda Public Meeting Convened, Topic Overview 12:40 pm Presentation of the Evidence and Economic Modeling, Q&A 12:45 1:30 pm (Dr. Jeff Tice, Melanie Whittington, and Dr. Dan Ollendorf) Public Comments 1:30 2:00 pm CTAF Deliberation and Votes 2:00 2:30 pm Policy Roundtable Discussion 2:30 3:20 pm Reflections from CTAF Panel 3:20 3:30 pm Summary, Closing Remarks 3:30 pm Download meeting materials: http://tinyurl.com/ctaf-mepo Evidence Review Jeffrey A. Tice, MD Division of General Internal Medicine University of California, San Francisco 3 4 1

Disclosures: I have no conflicts of interest Key review team members: Dan Ollendorf, PhD Jed Weissberg, MD Shanshan Liu, MS, MPH Elizabeth Russo, MD Topic in Context Asthma: 22 million Americans Severe asthma Daily symptoms limiting normal activities; 2+ exacerbations requiring oral corticosteroids (OCS) in past year 5-10% of asthma but 50% of costs Standard treatment: inhaled corticosteroids (ICS) plus long acting beta agonist (LABA) Additional therapies: leukotriene inhibitors, theophylline, and omalizumab OCS used for asthma exacerbations and chronically for severe asthma not controlled without OCS Chronic OCS associated with many long-term complications: infections, diabetes, osteoporosis, myopathy, obesity, glaucoma, depression, delirium, hypertension, adrenal suppression, cataracts, etc. 5 6 Mepolizumab Humanized monoclonal antibody to IL-5 Binds to IL-5, decreasing IL-5 signaling, leading to decreased eosinophils in blood and tissue FDA-approved November 2015 Mepolizumab 100 mg SC every 4 weeks in MD office Requires reconstitution by office staff Indication: Patients 12 years old with severe eosinophilic asthma Blood eosinophils 150 cell/µl at initiation or eosinophils 300 cell/µl in prior year 7 Methods Systematic review following PRISMA guidelines Target population (FDA indication): Adults and children ages 12 years and older with severe, uncontrolled asthma and evidence of eosinophilic inflammation Intervention Mepolizumab 100 mg SC (primary) Mepolizumab 75 mg IV (similar pharmacodynamics) Comparator: Standard treatment for severe asthma (OCS added to daily ICS and other controller therapy alone) 8 2

Double-blind RCTs MENSA trial (100 mg SC or 75 mg IV vs. placebo): 576 patients age 12+ years and at least 2 asthma exacerbations in past year 24 week F/U SIRIUS trial (100 mg SC vs. placebo): 135 patients age 12+ years requiring 5-35 mg of prednisone daily for at least 6 months 36 week F/U DREAM trial (75 or 250 or 750 mg IV q 4 weeks): 616 patients age 12+ years and at least 2 asthma exacerbations in past year 52 week F/U Annual Exacerbation Rates N Baseline End Rate Ratio MENSA 100 SC 194 3.8 0.8 0.5 (0.4-0.6) 75 IV 191 3.5 0.9 0.5 (0.4-0.7) Placebo 191 3.6 1.7 SIRIUS 100 SC 69 3.3 1.4 0.7 (0.5-1.0) Placebo 66 2.9 2.1 DREAM 75 IV 153 3.7 1.2 0.5 (0.4-0.7) Placebo 155 3.7 2.4 9 10 Oral Corticosteroid Use (mg/day) Median dose N Baseline End Difference SIRIUS 100 SC 69 10.0 3.1 6.9 Placebo 66 12.5 10.0 2.5 Quality of Life Statistically significant modest improvements Asthma Control Questionnaire St. George s Respiratory Questionnaire Mean dose N Baseline End Difference SIRIUS 100 SC 69 12.4 8.6 3.8 Placebo 66 13.2 10.5 2.7 Median dose reduction: 50% versus 0%, P=0.007 11 12 3

Adverse Events Injection site reactions 8% versus 3% No difference in SAEs No difference in hypersensitivity reactions Opportunistic infections Patients with parasitic infections excluded Nominally more herpes zoster infections 2/263 versus 0/257 Effectiveness: Controversies and Uncertainties Relatively small number of patients treated with SC MENSA: 194 participants SIRIUS: 69 participants Short duration of follow-up MENSA: 32 weeks SIRIUS: 24 weeks Key subgroups too small to evaluate African descent: n = 39 Ages 12 to 17 years: n = 27 13 14 Effectiveness: Summary Moderate certainty of comparable or better net benefit for mepolizumab as add-on maintenance treatment compared with standard of care Other benefits or disadvantages: Potential reduction in long-term harms associated with chronic OCS use Injection that requires office visit every four weeks creates travel burden and may decrease long-term adherence Conversely, monitoring and opportunity for patient education may offer additional benefits New mechanism of action to treat severe asthma Public Comments Received Mepolizumab 75 mg IV data should be included as it has equivalent pharmacodynamics Unpublished, ongoing open label continuation studies of the published trials provide data on the durability of the benefits Potential long term benefits through effects on airway remodeling may lead to greater benefits with mepolizumab treatment The large placebo effect on exacerbation rates suggests that optimization of standard therapy alone may greatly improve outcomes 15 16 4

Disclosures: Incremental Costs per Outcomes Achieved Jon Campbell, PhD & Melanie Whittington, MS Department of Clinical Pharmacy Center for Pharmaceutical Outcomes Research University of Colorado Anschutz Medical Campus Financial support provided to the University of Colorado from the Institute for Clinical and Economic Review (ICER). Key review team members: Rick Chapman, PhD, MS Jeff Tice, MD Dan Ollendorf, PhD 17 18 Research Question What are the outcomes, costs, and cost-effectiveness of mepolizumab plus standard of care (SoC) compared with SoC alone? Methods Population: adults with severe, uncontrolled asthma and evidence of eosinophilic inflammation Value Source Mean age 50 Ortega et al., 2014 Female 57% Ortega et al., 2014 Caucasian 90% Ortega et al., 2014 Mean FEV 1 % of predicted 61% Ortega et al., 2014 Mean reversibility 28 Ortega et al., 2014 Mean blood eosinophil 445 Ortega et al., 2014 Payer perspective: direct medical care and drug costs Time Horizon: lifetime 19 20 5

Model Structure Key Assumptions Treatment effect observed during the trials is consistent throughout the model time horizon Excess risk of death from exacerbation assumed only for hospitalized cases Oral corticosteroid use above 5mg/day is potentially harmful to the patient Exacerbation utility is the same across treatment strategies Exacerbation is defined as one of three subcategories: 1. Asthma related event that requires an oral steroid burst of at least three days (but not ED visit or hospitalization) 2. Asthma related event that requires ED visit (but not a hospitalization) 3. Asthma related event that requires a hospitalization 21 Non-exacerbation utilities are different across treatment strategies based on SGRQ mapping 22 Results: Base Case Results: One-way Sensitivity Analysis Mepolizumab + SoC vs. SoC Alone QALYs Treatment Non-Treatment Costs Costs Mepolizumab + 15.12 $706,111 $15,465 SoC SoC alone 13.59 $98,083 $33,552 ICER ($/QALY) Incremental 1.53 $608,028 -$18,087 $385,546/QALY Treatment costs include the cost of mepolizumab and SoC. Non-treatment costs include the cost of exacerbations and chronic OCS use. 23 This value is a function of three inputs: (1) Annual cost of chronic oral corticosteroid use, (2) Annual cost of adverse events due to chronic oral corticosteroid use, (3) Treatment-specific percent using chronic oral corticosteroids >5mg per day. 24 6

Results: Scenario Analysis Cost of Mepolizumab ICER Price per Vial (discount from base-case) Price per Year $50,000/QALY $266 (89.4%) $3,458 $100,000/QALY $599 (76.0%) $7,787 $150,000/QALY $932 (62.7%) $12,116 $385,546/QALY $2,500 $32,500 Results: Scenario Analysis Incremental Cost per QALY Length of Time Horizon $500,000 ICER $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $- 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 Time Horizon (in years) 25 26 Key Model Limitations Limited long-term follow-up data Clinical outcomes and benefits observed in trial may not be constant through time Lack of absenteeism data to account for productivity differences from a societal perspective Responder scenario and comparison with omalizumab not conducted Wholesale acquisition cost of drugs may not represent true transaction cost of drugs Conclusions Adding mepolizumab to SoC for adult patients with severe eosinophilic asthma appears to confer clinical benefits in terms of reduced rates of exacerbation and improved quality of life However, the estimated cost-effectiveness of mepolizumab exceeds commonly-cited thresholds Achieving levels of value more closely aligned with patient benefit would require discounts of two-thirds to three-quarters from current list price of mepolizumab 27 28 7

Public Comments Received Omalizumab (Xolair) was not modeled as a comparator Thresholds of $50,000 to $150,000/QALY are too low when assessing primarily employed populations More clarity needed on how trial data was extrapolated to assume lifetime clinical effects Payer perspective does not account for substantial out-of-pocket costs incurred by patients on multiple medications Potential Budgetary Impact Daniel A. Ollendorf, PhD Chief Scientific Officer Institute for Clinical and Economic Review 29 30 Disclosures: I have no conflicts of interest. Key review team members: Rick Chapman, PhD, MS Budget Impact: Methods Estimated # of patients age 12 and older with severe asthma with poorly controlled disease (defined as 2+ exacerbations in prior year) and eosinophilic inflammation (150+ cells/μl at treatment initiation): ~320,000 Assumed uptake: 10% by year 5 Year 5 treated estimate: 32,035 31 32 8

Annual Budget Impact Threshold: Methods Based on calculations involving: Budget Impact: Results at 5 Years Target for overall health care cost growth (GDP+1%) Number of new drug approvals annually Contribution of drug spending to overall health care spending Serves as policy trigger for discussion of managing cost of new interventions Treatment Eligible Population (thousands) Number Treated (thousands) Weighted BI per Patient ($)* Average BI per year (millions) Mepolizumab 320 32.0 $93,043 $596.1 2015-2016 threshold is $904 million for drugs 33 34 Public Comments Received No comments received on budget impact analysis SUPPLEMENTAL SLIDES 35 36 9

Model-wide Inputs Value Sources Asthma-related mortality per 100 0.4 de Vries et al. 2010 person years Additional risk of death given asthma 2.48% Watson et al., 2007 hospitalization Additional risk of death given ED visit 0% Assumed Additional risk of death given oral 0% Assumed corticosteroid burst Disutility for hospitalization -0.2 Lloyd et al., 2007 Disutility for ED visit -0.15 Lloyd et al., 2007 Disutility for oral corticosteroid burst -0.10 Lloyd et al., 2007 Disutility for chronic oral corticosteroid use -0.023 NICE omalizumab manufacturer s base-case, 2013 Cost for asthma-related hospital stay $9,960 Cangelosi et al., 2015 Cost for asthma-related ED visit $684 Cangelosi et al., 2015 Cost for oral corticosteroid burst exacerbation $156 Cangelosi et al., 2015 & Redbook Annual cost for Standard of Care $5,738 Cangelosi et al., 2015 & Redbook Annual cost of chronic oral $73 Redbook corticosteroid use Annual cost of adverse events due to chronic oral corticosteroid use $784 Shah et al., 2013 Treatment-Specific Model Inputs Value Source SoC Annual exacerbation rate per person year 1.74 Ortega et al., 2014 Proportion of hospitalizations 5.75% Ortega et al., 2014 Proportion of ED visits 5.75% Ortega et al., 2014 Proportion of oral corticosteroid bursts 88.51% Ortega et al., 2014 Discontinuation rate over entire time horizon 6% Ortega et al., 2014 Utility value for non-exacerbation health state 0.77 Ortega et al., 2014 Percent using chronic oral corticosteroids >5mg per day 68% Bel et al., 2014 Mepolizumab + SoC (limited to parameters that differ from SoC alone) Annual exacerbation rate per person year 0.83 Ortega et al., 2014 Proportion of hospitalizations 3.61% Ortega et al., 2014 Proportion of ED visits 6.02% Ortega et al., 2014 Proportion of oral corticosteroid bursts 90.36% Ortega et al., 2014 Annual cost for mepolizumab $32,500 Redbook Discontinuation rate over entire time horizon 5% Ortega et al., 2014 Utility value for non-exacerbation health state 0.828 Ortega et al., 2014 Difference in utility value for non-exacerbation health 0.059 Ortega et al., 2014 state (compared to SoC alone) Percent using chronic oral corticosteroids 46% Bel et al., 2014 38 Public Comments Mepolizumab (Nucala, GlaxoSmithKline plc.) for the Treatment of Severe Asthma with Eosinophilia Questions for Deliberation February 12, 2016 39 10

Comparative Clinical Effectiveness Example Question For patients with condition X, is the evidence adequate to demonstrate that the net health benefits of intervention A is greater than that of comparator B? Yes No Care Value Example Question Given the available evidence, what is the care value of intervention A vs. comparator B? A. Low B. Intermediate C. High Comparative Clinical Effectiveness Incremental Cost per Outcomes Achieved Additional Benefits Contextual Considerations Care Value 41 42 Provisional Health System Value Example Question Given the available evidence, what is the provisional health system value of intervention A vs. comparator B? A. Low B. Intermediate C. High Mepolizumab: Clinical Effectiveness Q1. For patients with severe asthma and with an eosinophilic phenotype, is the evidence adequate to demonstrate that the net health benefit of adding mepolizumab to standard of care is greater than that of standard of care alone? Yes Care Value Potential Health System Budget Impact Provisional Health System Value Mechanisms to Maximize System Value Achieved Health System Value No 43 44 11

Mepolizumab: Care Value Q2. Given the available evidence for patients with severe asthma and with an eosinophilic phenotype, what is the care value of adding mepolizumab to standard of care vs. standard of care alone? A. Low B. Intermediate C. High Mepolizumab: Provisional Health System Value Q3. Given the available evidence for patients with severe asthma and with an eosinophilic phenotype, what is the provisional health system value of adding mepolizumab to standard of care vs. standard of care alone? A. Low B. Intermediate C. High Comparative Clinical Effectiveness Incremental Cost per Outcomes Achieved Additional Benefits Contextual Considerations Care Value Care Value Potential Health System Budget Impact Provisional Health System Value Mechanisms to Maximize System Value Achieved Health System Value 45 46 Policy Roundtable Participants Neal Kohatsu, MD, MPH, Medical Director, California Department of Health Care Services Michael Peters, MD, MAS, Assistant Professor, UCSF Division of Pulmonary and Critical Care Medicine and Pulmonologist, UCSF Severe Asthma Clinic Kristina Philpott, MD, Chair, Allergy and Immunology Department, Palo Alto Foundation Medical Group Tony Van Goor, MD, MMM, CPE, FACP, Senior Director, Medical Affairs, Medical Director for Policy and Technology Assessment, Blue Shield of California Tonya Winders, MBA, President and CEO, Allergy & Asthma Network Reflections from CTAF Panel 47 48 12

Summary and Closing Remarks Meeting Adjourned 49 50 13