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Precision Lung Cancer Drugs on Pricing Evaluation Group's Agenda

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NEW YORK (GenomeWeb) – A group that evaluates the cost- and comparative-effectiveness of drugs is turning its attention to precision treatments for advanced non-small cell lung cancer, aiming to come up with a "fair" price for them.

The non-profit Institute for Clinical and Economic Review (ICER) on June 21 released a draft "scoping" document outlining several tyrosine kinase inhibitors for EGFR mutation-positive NSCLC patients and immunotherapies for those without driver mutations that it will evaluate for comparative-effectiveness, cost-effectiveness, and budgetary impact. The organization is accepting public input on the draft document until June 28.

This document, once finalized, will guide ICER's evaluations as to how well these therapies work and the value they add for their price, after which the institute will draft a report. The public will have 10 days to provide input on the draft. ICER's Midwest Comparative Effectiveness Public Advisory Council will discuss the findings at a public meeting in October, and the institute plans to issue a final evidence report seven days later.

The drugs under review are three tyrosine kinase inhibitors — Boehringer Ingelheim's Gilotrif (afatinib), Genentech's Tarceva (erlotinib), and AstraZeneca's Iressa (gefitinib) for the EGFR mutation-positive subset — and immunotherapies that inhibit PD-1 and PD-L1 proteins — Genentech's Tecentriq (atezolizumab), Bristol-Myers Squibb's Opdivo (nivolumab), and Merck's Keytruda (pembrolizumab).

These drugs are expensive. ICER estimates that a course of treatment with a TKI is $90,000 annually, while a year-long course of immunotherapy is $150,000. "One of the things we're going to look at is the incremental cost-effectiveness of these therapies compared to other treatments, and do that with an eye toward coming up with a value-based price that we would suggest is a fair price for these therapies," David Rind, ICER's chief medical officer, told GenomeWeb.

The acronym ICER also stands for incremental cost-effectiveness ratio, a statistic that payors commonly use to compare the price and outcomes impact of healthcare interventions and calculate what they are willing to pay for. In the US, payors have historically determined interventions as cost effective when their ICER estimates range between $50,000 and $150,000 per quality-adjusted life year (QALY) gained. QALYs are a way to measure a person's health state on a scale of 0 to 1, where how long someone lives is adjusted to their quality of life.

The institute uses these same measures to come up with a value-based price benchmark for drugs it evaluates. The term "value" has become a buzzword in healthcare circles, since one of the aims of the Affordable Care Act is to shift from a fee-for-service payment system to one that rewards healthcare providers when they meet quality benchmarks but come under budget for providing that care.

For ICER, "the broad sense of value is what are you getting for what you're paying," Rind said. As an example, he noted that a consumer might try out a $2 bottle of generic detergent against a $4 bottle of a brand-name product to figure out if spending the extra bucks results in cleaner clothes. When it comes to healthcare, "the information isn't readily available" to allow people to compare treatments for themselves, Rind said, "and the stakes are much higher."

Perhaps because the stakes are so high for patients with incurable diseases like advanced lung cancer, ICER has not received a friendly response from many patient advocates. For example, the Multiple Myeloma Research Foundation recently distanced itself from ICER, after it evaluated several drugs for the disease and named MMRF as a stakeholder in a draft report. In June, the MMRF clarified that although it had some discussions with ICER and expressed its concerns, the organization doesn't support or endorse the report.

"Some believe ICER wants to put low benchmark prices on these drugs and provide this as a tool for pharmacy benefit managers and insurers to hit manufacturers over the head for discounts," Jennifer Hinkel, a partner at consulting firm McGivney Global Advisors, a healthcare economist, and a cancer survivor, told GenomeWeb. Hinkel has challenged ICER's cost-effectiveness evaluation methodologies, criticized the expertise of its evaluation committees, and questioned its ties to the insurance industry. "Many feel that perhaps ICER is allied mostly with the managed care industry," Hinkel said. "And, so, they have some inherent bias in terms of what they want their information to be used for."

The Centers for Medicare & Medicaid Services recently proposed changes to the way it pays for drugs under the Part B benefit, and indicated that in moving toward a value-based reimbursement model, it would consider the assessments of groups like ICER. The Personalized Medicine Coalition has submitted comments to CMS expressing concern that its proposed rule will result in the deepest cuts for the most innovative drugs and hinder patient access to personalized medicine.

Rind noted, however, that by putting a "fair price" on drugs, ICER aims to spur much-needed conversation on the cost of drugs between different stakeholders. The IMS Institute for Healthcare Informatics reported earlier this year that the annual growth rate in cancer drug costs increased from 2 percent in 2011 to nearly 14 percent in 2015. The report found that although advancing science has led to a number of new treatment options for narrowly defined diseases and is “transforming the oncology treatment landscape,” most healthcare systems are struggling to adapt.

Genentech has been a leader in developing and launching new cancer drugs for molecularly-defined patient subpopulations. "Value frameworks like ICER can allow for meaningful dialogue between doctors and patients and account for an individual patient's needs and preferences without limiting access to potentially life-extending medicines," Genentech spokesperson Andrew Villani told GenomeWeb. Villani noted though that there are complex considerations at play, and Genentech will provide ICER data to inform its evaluation.

ICER said it developed the draft scoping document with input from pharma companies that developed and market the NSCLC drugs under review, from physicians and from patient organizations, such as LUNGevity Foundation, the Addario Lung Cancer Foundation, and Friends of Cancer Research. Based on ICER's past reports on drugs, however, some advocacy organizations fear that the group's evaluations could end up restricting patient access to the latest molecularly informed therapies.

"Genomics is the key to personalizing treatments for cancer patients," Bonnie Addario, head of the Addario Lung Cancer Foundation, told GenomeWeb. "We simply must open doors to innovation and not close them. I believe what ICER is doing at this time is preparing to close the doors."

Addario said she didn't pay too much attention to ICER's work until the group released its report on multiple myeloma drugs a few months ago. In that report, ICER concluded that though the drugs it reviewed appear to have a positive impact on survival and quality of life, their wholesale acquisition costs exceed the cost-effectiveness threshold of $100,000 to $150,000 per QALY. In the case of some drugs, ICER's pricing would be more than a 90 percent discount to the list price.

In its response , the MMRF criticized ICER's methodologies and called the group out for characterizing "multiple myeloma as a single disease, without taking into account its various subtypes."

"We work with [lung cancer] patients who are alive today because of groundbreaking personalized treatments and genomics," Addario said. "I can't imagine how many of them wouldn't be here today if a group like ICER said their treatment wasn't worth the cost and a payor denied paying for it because of that."

This year, close to 160,000 people will die from lung cancer, the top cancer killer in the US. The five-year survival rate for patients diagnosed while the disease is localized to the lungs is 54 percent, but the disease is not typically detected so early. Once the cancer has spread to other parts of the body, only 4 percent of patients live for five years.

However, genomic advances in recent years have led to the approval of multiple precision therapies, such as EGFR inhibitors and immunotherapies, for NSCLC, the most common type of lung cancer. These therapies have helped improve survival rates in molecularly defined NSCLC subpopulations.

"In 1971, Richard Nixon declared war on cancer, but the war on lung cancer is just getting started," Addario said. Although the five-year survival rate for lung cancer patients has only increased by 3 percent during the past 30 years, Addario noted personalized medicines are steadily extending patients' lives between one and five years. More than a decade earlier, when she was diagnosed with lung cancer, people with advanced disease lived around 90 days. "If they lived a year it was amazing," she said. "That's not the case anymore. Now is not the time to put the breaks on."

Diagnostic value

Although there are a number of precision medicines available in lung cancer, improving understanding of the genomic underpinnings of the disease has also increased scientific complexity in drug development and patient care. For example, acquired resistance is an inevitable problem for the 10 percent of NSCLC patients with EGFR mutations, who after experiencing robust response for a while almost always relapse. Moreover, the increasing power of next-generation sequencing often identifies genomic alterations that don't have drugs to target them.

Still, for the personalized drugs that are available, researchers have modeled the economic impact of genetic testing to guide treatment and generally found such interventions to improve outcomes and lower costs. A group in Japan, for example, found that EGFR testing ahead of administering Iressa was cost-effective compared to patients who weren't tested and received a combination carboplatin-paclitaxel treatment.

ICER, however, does not plan to calculate the cost-effectiveness of EGFR testing, but will calculate cost-effectiveness of TKIs assuming that patients with EGFR mutations will get them. For the TKIs, "we're not trying to judge whether people should get EGFR [mutation] testing," Rind explained. "For the ones who are found to have that [mutation], we're modeling what's the cost-effectiveness of these agents."

However, ICER is still mulling whether to model the impact of PD-L1 testing in the context of immunotherapies. Rind said he would be surprised if PD-L1 testing has a "major impact" on the cost-effectiveness of immunotherapies, but noted that when ICER spoke to drugmakers, they were interested in this analysis.

At the American Society of Clinical Oncology's annual meeting this year, researchers presented data from a cost-effectiveness analysis of Opdivo and Keytruda when administered with PD-L1 testing and without. In studies of patients who had non-squamous cell tumors with PD-L1 expression in 1 percent or more of cells, the cost per QALY gained decreased from $176,000 to $105,000. For Keytruda, when patients had PD-L1 expression in 50 percent of more cells, the cost per QALY gained dipped from $163,000 to $138,000.

Currently, there is much uncertainty among oncologists about whether to test patients for PD-L1 expression. The US Food and Drug Administration approved Keytruda with a companion diagnostic, which means PD-L1 testing is necessary for the safe and effective use of the drug. But in the case of Opdivo and Tecentriq, the agency approved complementary diagnostics, which means testing isn't required but may be useful for determining which patients will likely derive the most benefit. 

Diaceutics, a personalized medicine-focused consulting firm, has conducted surveys showing that the different PD-L1 expression diagnostics on the market and the nuances in drug labels about the necessity of biomarker analysis is confusing for healthcare providers. CEO Peter Keeling noted that a cost-effectiveness analysis of PD-L1 testing could help oncologists get a better handle on the utility of PD-L1 testing.

While two of the drug labels don't require PD-L1 expression analysis, predictive testing of this kind may become more critical as these drugs garner approval in earlier and earlier treatment settings. "It would be a backward step if the evaluation did not consider the costs of testing and articulate the cost benefit of therapy selection when testing is integrated into clinical decision making," Keeling reflected. "To ensure the continued relevance of ICER's evaluation beyond 2016 [and] 2017, it would be important that this future test integration is costed into the calculations."

Critical concerns

Industry observers have described ICER as the US version of UK's cost watchdog National Institute for Health and Care Excellence (NICE), which advises the National Health Service on which drugs it should fund. Keeling noted that ICER should take note of the fact that NICE has included testing costs in its assessments of precision cancer drugs, such as Iressa and Herceptin, as well as into pricing and discount negotiations with drug companies.

Hinkel also drew a comparison between the two groups, noting they both use QALYs as a way to determine cost-effectiveness. "It has been a matter of debate for 20 to 30 years in health economics as to whether QALYs should be used," she said. "There is growing evidence that using this measure leads to decisions and outcomes that are not good for patients."

QALYs are a widely used measure in health economics but have certain drawbacks. In a 2009 Health Affairs article entitled, "Is the United States Ready for QALYs?," Peter Neumann from Tufts Medical Center and Dan Greenberg from Ben-Gurion University of the Negev in Israel noted that QALYs don't distinguish between the aggregation of modest benefits to many from the substantial benefit of an intervention to a few people. "Single-minded and uncompromising use of QALYs in cost-effectiveness analysis to inform reimbursement decisions will almost certainly encounter a hostile reception in the US," they wrote.

Rind emphasized that a key difference is that NICE is a governmental body, while ICER is independent. The group, nonetheless, has come under fire for having too close a relationship with the insurance industry. Critics have pointed out, for instance, that ICER President Steven Pearson was a senior fellow for the trade organization America's Health Insurance Plans.

ICER received 9 percent of its 2016 funding from health plans and provider groups, 17 percent from manufacturers, 4 percent from government grants and contracts, and 70 percent from non-profit foundations. Rind noted that its reports are financed with contributions from non-profit foundations.

One of its biggest benefactors is the Laura and John Arnold Foundation, which gave ICER $5.2 million last year and more recently awarded $4.7 million to Memorial-Sloan Kettering Cancer Center's Evidence Driven Drug Pricing Project. Within the MSKCC effort, a team led by health policy expert Peter Bach developed a tool called Abacus, which allows users to track the actual and value-based price of various drugs. The monthly "Abacus Price" for many of the NSCLC drugs under review by ICER, such as Opdivo, Keytruda, and Iressa, is significantly lower than their actual price.

MSKCC launched Abacus last year hoping to encourage the drug industry to take a rational approach to drug pricing. ICER claims this is also its aim, particularly since the high price of drugs is a concern for patients.

Patient groups ICER spoke with for the lung cancer report expressed concern over the "financial toxicity" of cancer treatments, Rind recalled. "This is coming from the patient side, that apart from how we usually think of toxicities of agents, these agents cause financial toxicity where people are running out of money trying to pay for the therapies," he said.

But instead of focusing on just the price tag, Addario believes that pharmaceutical firms, patients, and payors would all benefit if stakeholders put their energies behind making the drug development process more efficient. "Rather than dangle drugs in front of patients only to prevent access, we should be looking for ways to decrease the cost of drug development," she said. "If we work harder and smarter on clinical trial design and the time it takes to get drugs to market we can reduce the cost and pass it on to the price of drugs."

Addario also isn't a fan of the way ICER has engaged physicians and patients in the development of its reports. ICER provided GenomeWeb with a list of patient and consumer representatives on its various advisory boards and councils. However, patient advocates GenomeWeb spoke to criticized that these groups don't have adequate representation from the patients who suffer from and doctors who treat the diseases ICER reports on.

Because ICER is focused on comparative and cost effectiveness, several of the MDs on its advisory councils are experts in health services and policy research. Hinkel noted, however, that doctors that aren't caring for patients day to day will likely think of the value of treatments very differently than an MD mainly doing health economics research.

ICER also doesn't provide sufficient time or venues for the public to comment, Addario added, and called the five-day comment period for the draft scoping document "ridiculous." Nonetheless, the Addario Lung Cancer Foundation, along with a group of advocacy organizations, plan to jointly respond to ICER's draft scoping document by the Tuesday deadline.

There are a lot of chances throughout the report development process for people to comment, Rind said, adding that ICER aims to work expeditiously to keep up with the rapid pace of healthcare advancements. "You cease to be relevant if you take a long time to start and finish a report like this," he said. "By the time the report comes out, the world will have moved on."