The Paradigm Shift of Personalized Medicine Economic and Policy Challenges

The Genomics “Revolution”: Challenges in Translating New Drugs and Diagnostics into Practice & Policy Kathryn A. Phillips, UCSF (Chair) Speakers: Katrina Armstrong, U of Penn Jennifer Haas, Brigham/Harvard & Su-Ying Liang, UCSF (in absentia) Patricia Keenan, Yale Kathryn A. Phillips, UCSF Will our new knowledge of genetics “revolutionize” health care? Or is there a train wreck coming? Why is application of genetics important? • Increased understanding of genetics raises hopes that health care can become more “personalized” • Pharmacogenomics (PGx) - targeting of drugs based on genetic characteristics of individual or disease – is key component of personalized medicine But changes the landscape for health care Where are we today? • Hundreds of genetic tests available • PGx is being used in clinical practice – E.g. HER2 testing for trastuzumab (Herceptin®) hugely successful example • Industry using PGx data for drug development • Biotech industry developing targeted therapies based on genetics • FDA pursuing PGx policy initiatives But Many Challenges….. • We need to speed up the use of PGx…to give people more health benefit for the money… • Former FDA Commissioner McClellan • How much will the expanded use of genetic information further escalate the cost of health care, and who will pay for it? • H. Varmus, NEJM • There is an embarrassing dichotomy between the body of PGx knowledge and its clinical application – J. DeLeon, U of KY Challenges PATIENTS •What factors will determine adoption? •Will PGx increase or decrease costs? •How will providers overcome barriers? •How should PGx be evaluated and by whom? •Will insurers cover PGx interventions? •How will industry balance the incentives & disincentives? •What will be the role of regulation? •How will PGx be implemented w/in a costcontainment context? •Can society afford the cost of new drugs? •Will PGx increase or decrease disparities? PROVIDERS INSURERS INDUSTRY GOVERNMENT Challenges to the Audience • What can be the role of health services research? • What are barriers to health services research on these topics? Economic & Policy Challenges to Implementing Personalized Medicine & Pharmacogenomics Kathryn A. Phillips, UCSF Objective • Discuss illustrative economic & policy challenges to implementing PGx: – Adoption – Regulation – Evaluation What is an Economist Doing in a Nice Place Like This? Wearing Three Hats 1. Academic (primary role) – Research on clinical & economic issues relevant to adoption of PGx 2. Government – Advisor to the FDA on PGx – Member of CDC-sponsored national group on application of genetic testing (EGAPP) 3. Industry – Board member/consultant to biotechnology companies on how to measure value Challenges to Adoption • Diagnostics & dx/drug combos increasingly important Requires: – Integration of historically divided industries & regulatory mechanisms – Early consideration of diagnostics in development – Better understanding of incremental contribution of diagnostics Phillips KA, Van Bebber S, Issa A. Priming the pipeline: A review of the clinical research and policy agenda for diagnostics and biomarker development, Nature Reviews Drug Discovery (June 06) • Challenges to Regulation • • New technologies often require new approaches to regulation US lacks cohesive approach to evaluation of new technologies – No single agency reviews technologies (e.g., demise of OTA) • Regulation of dx is less extensive & less focused on clinical utility than for drugs – FDA does not consider cost-effectiveness Phillips KA, Van Bebber S. Regulatory perspectives on pharmacogenomics: A review of the literature on key issues faced by the US FDA. Medical Care Research and Review 2006: 63(3):301-326. Challenges to Evaluation • • Limited data – Linking PGx to outcomes Complex data – Multi-factorial conditions – Dx/drug combinations more complex to analyze than separate interventions – One intervention often relevant to multiple drugs & diseases, e.g., P450 testing Phillips KA, Van Bebber S. Measuring the value of pharmacogenomics. Nat Rev Drug Discov. 2005 June;4:500-509. Phillips KA, Veenstra DL, Sadee W, Oren E, Lee JK. Potential role of pharmacogenomics in reducing adverse drug reactions: a systematic review. JAMA. 2001;286(18):2270-2279. Limited Evidence on Value • Only 11 cost-effectiveness studies found in 2004 review (maybe ~20 now) – 7 favorable cost-effectiveness ratio, 2 not costeffective, 2 equivocal • Even for HER2/Herceptin range of findings on cost-effectiveness – Elkin (2004): $125,000 per QALY gained Phillips KA, Van Bebber SL. A systematic review of costeffectiveness analyses of pharmacogenomic interventions. Pharmacogenomics. 2004 Dec;5(8):1139-49. Herceptin: Successful Adoption despite Small Market & Value Concerns • HER2/neu testing & Herceptin for breast cancer • Patients & providers were early demanders – Life threatening disease, few options, poor prognosis – Despite high costs ~ $4000/month • U.S. payers cover treatment – Test is gatekeeper to expensive drug • Industry success – Enormous financial success for Genentech – Best known example of PGx success Iressa: Unsuccessful Diffusion Despite Fast Approval • Used for lung cancer • Early demand – But post approval trial results essentially led to withdrawal from market • Versus Herceptin – Alternative treatments available – Potential biomarker found post approval but until recently no diagnostic has been available so drug could not be targeted – Test now developed but limited availability, expensive ($975), & unknown benefits P450 Testing (AmpliChip®): Slow Adoption Despite Potential Wide Impact • Tests for CYP2D6 & 2C19 mutations – Involved in metabolism of many drugs • CYP2D6 testing could have high value – Relevant to 189M prescriptions and $12.8B expenditures/annually in US – Particularly mental health and heart disease drugs • Insufficient data to assess impact of testing – Very limited data on clinical outcomes of testing – Uncertain what population is the “target” Conclusions: “GET ON THE BUS OR GET RUN OVER” • Application of genetics will impact health care delivery in future – Personalized medicine is key overarching trend • Demonstrating value of PGx will be critical – Will require more data & impetus to assess societal value • Must occur w/in: – policy context of high drug expenditures – safety concerns – need to facilitate the drug/dx pipeline to bring beneficial products to market Challenges for Audience • What can be the role of health services research? • What are barriers to health services research on these topics?