AHDB May 2015

THE PEER-REVIEWED FORUM FOR REAL-WORLD EVIDENCE IN BENEFIT DESIGN ™ MAY 2015

VOLUME 8, NUMBER 3

FOR PAYERS, PURCHASERS, POLICYMAKERS, AND OTHER HEALTHCARE STAKEHOLDERS

EDITORIAL

Did the “HEN” Lay a Rotten Egg? David B. Nash, MD, MBA REGULATORY

Breaking the Bank: Three Financing Models for Addressing the Drug Innovation Cost Crisis J.D. Kleinke; Nancy McGee, DrPH ™

Stakeholder Perspective: Financing Drug Innovation: Cost versus Cure

By Joseph R. Antos, PhD BUSINESS

Demonstrating Value for Biosimilars: A Conceptual Framework Sotiris Rompas, PhD; Thomas Goss, PharmD; Sally Amanuel, BSc, MA, MBA; Victoria Coutinho, BSc, PhD; Zhihong Lai, PhD; Paola Antonini, MD, PhD; Michael F. Murphy, MD, PhD Stakeholder Perspective: Challenges Surrounding the New Biosimilars Landscape

By Michael Kleinrock

Adherence to Insulin Pen Therapy Is Associated with Reduction in Healthcare Costs Among Patients with Type 2 Diabetes Mellitus Arthi Chandran, MS, MPH; Machaon K. Bonafede, PhD, MPH; Sonali Nigam, MPH; Rita Saltiel-Berzin, RN, MPH, CDE, CHES; Laurence J. Hirsch, MD; Betsy J. Lahue, MPH Stakeholder Perspective: Adherence to Antihyperglycemic Treatment Regimen Also Reduces Overall Costs

By Quang T. Nguyen, DO, FACP, FACE, FTOS AMCP 2015 HIGHLIGHTS

Payers’ Perspectives: Health Economics Outcomes in Managed Care

8 8 © 2015 Engage Healthcare Communications, LLC

www.AHDBonline.com

DISCOVERING HOW FAR THERAPY CAN GO IMPORTANT SAFETY INFORMATION WARNINGS AND PRECAUTIONS Hemorrhage - Fatal bleeding events have occurred in patients treated with IMBRUVICA®. Grade 3 or higher bleeding events (subdural hematoma, gastrointestinal bleeding, hematuria, and post-procedural hemorrhage) have occurred in up to 6% of patients. Bleeding events of any grade, including bruising and petechiae, occurred in approximately half of patients treated with IMBRUVICA®.

The mechanism for the bleeding events is not well understood.

IMBRUVICA® may increase the risk of hemorrhage in patients receiving antiplatelet or anticoagulant therapies. Consider the benefit-risk of withholding IMBRUVICA® for at least 3 to 7 days pre and post-surgery depending upon the type of surgery and the risk of bleeding.

Infections - Fatal and non-fatal infections have occurred with IMBRUVICA® therapy. Grade 3 or greater infections occurred in 14% to 26% of patients. Cases of progressive multifocal leukoencephalopathy (PML) have occurred in patients treated with IMBRUVICA®. Monitor patients for fever and infections and evaluate promptly.

Cytopenias - Treatment-emergent Grade 3 or 4 cytopenias including neutropenia (range, 19 to 29%), thrombocytopenia (range, 5 to 17%), and anemia (range, 0 to 9%) occurred in patients treated with IMBRUVICA®. Monitor complete blood counts monthly.

Atrial Fibrillation - Atrial fibrillation and atrial flutter (range, 6 to 9%) have occurred in patients treated with IMBRUVICA®, particularly in patients with cardiac risk factors, acute infections, and a previous history of atrial fibrillation. Periodically monitor patients clinically for atrial fibrillation. Patients who develop arrhythmic symptoms (eg, palpitations, lightheadedness) or newonset dyspnea should have an ECG performed. If atrial fibrillation persists, consider the risks and benefits of IMBRUVICA® treatment and dose modification.

Second Primary Malignancies - Other malignancies (range, 5 to 14%) including non-skin carcinomas (range, 1 to 3%) have occurred in patients treated with IMBRUVICA®. The most frequent second primary malignancy was non-melanoma skin cancer (range, 4 to 11%).

IMBRUVICA® (ibrutinib) is the first and only FDA-approved therapy for use in patients with Waldenström’s macroglobulinemia (WM) IMBRUVICA® is approved for use in 4 indications IMBRUVICA® is indicated for the treatment of patients with Mantle cell lymphoma (MCL) who have received at least one prior therapy.

Accelerated approval was granted for this indication based on overall response rate. Continued approval for this indication may be contingent upon verification of clinical benefit in confirmatory trials.

Chronic lymphocytic leukemia (CLL) who have received at least one prior therapy.

Chronic lymphocytic leukemia with 17p deletion.

Waldenström’s macroglobulinemia (WM).

Tumor Lysis Syndrome - Tumor lysis syndrome has been reported with IMBRUVICA® therapy. Monitor patients closely and take appropriate precautions in patients at risk for tumor lysis syndrome (e.g. high tumor burden).

DRUG INTERACTIONS

Embryo-Fetal Toxicity - Based on findings in animals, IMBRUVICA® can cause fetal harm when administered to a pregnant woman. Advise women to avoid becoming pregnant while taking IMBRUVICA®. If this drug is used during pregnancy or if the patient becomes pregnant while taking this drug, the patient should be apprised of the potential hazard to a fetus.

CYP3A Inducers - Avoid co-administration with strong CYP3A inducers.

ADVERSE REACTIONS The most common adverse reactions (≥25%) in patients with B-cell malignancies (MCL, CLL, WM) were thrombocytopenia, neutropenia, diarrhea, anemia, fatigue, musculoskeletal pain, bruising, nausea, upper respiratory tract infection, and rash.

Seven percent of patients receiving IMBRUVICA® discontinued treatment due to adverse events.

CYP3A Inhibitors - Avoid co-administration with strong and moderate CYP3A inhibitors. If a moderate CYP3A inhibitor must be used, reduce the IMBRUVICA® dose.

SPECIFIC POPULATIONS Hepatic Impairment - Avoid use in patients with moderate or severe baseline hepatic impairment. In patients with mild impairment, reduce IMBRUVICA® dose.

Please review the Brief Summary of full Prescribing Information on the following page.

To learn more, visit

www.IMBRUVICA.com © Pharmacyclics, Inc. 2015 © Janssen Biotech, Inc. 2015 1/15 PRC-00770

Brief Summary of Prescribing Information for IMBRUVICA® (ibrutinib) IMBRUVICA® (ibrutinib) capsules, for oral use See package insert for Full Prescribing Information INDICATIONS AND USAGE Mantle Cell Lymphoma: IMBRUVICA is indicated for the treatment of patients with mantle cell lymphoma (MCL) who have received at least one prior therapy.

Accelerated approval was granted for this indication based on overall response rate. Continued approval for this indication may be contingent upon verification of clinical benefit in confirmatory trials [see Clinical Studies (14.1) in Full Prescribing Information].

Chronic Lymphocytic Leukemia: IMBRUVICA is indicated for the treatment of patients with chronic lymphocytic leukemia (CLL) who have received at least one prior therapy [see Clinical Studies (14.2) in Full Prescribing Information].

Chronic Lymphocytic Leukemia with 17p deletion: IMBRUVICA is indicated for the treatment of patients with chronic lymphocytic leukemia (CLL) with 17p deletion [see Clinical Studies (14.2) in Full Prescribing Information].

Waldenström’s Macroglobulinemia: IMBRUVICA is indicated for the treatment of patients with Waldenström’s macroglobulinemia (WM) [see Clinical Studies (14.3) in Full Prescribing Information].

CONTRAINDICATIONS None WARNINGS AND PRECAUTIONS Hemorrhage: Fatal bleeding events have occurred in patients treated with IMBRUVICA. Grade 3 or higher bleeding events (subdural hematoma, gastrointestinal bleeding, hematuria and post procedural hemorrhage) have occurred in up to 6% of patients. Bleeding events of any grade, including bruising and petechiae, occurred in approximately half of patients treated with IMBRUVICA. The mechanism for the bleeding events is not well understood.

IMBRUVICA may increase the risk of hemorrhage in patients receiving antiplatelet or anticoagulant therapies.

Consider the benefit-risk of withholding IMBRUVICA for at least 3 to 7 days pre and post-surgery depending upon the type of surgery and the risk of bleeding [see Clinical Studies (14) in Full Prescribing Information].

Infections: Fatal and non-fatal infections have occurred with IMBRUVICA therapy. Grade 3 or greater infections occurred in 14% to 26% of patients. [See Adverse Reactions]. Cases of progressive multifocal leukoencephalopathy (PML) have occurred in patients treated with IMBRUVICA. Monitor patients for fever and infections and evaluate promptly.

Cytopenias: Treatment-emergent Grade 3 or 4 cytopenias including neutropenia (range, 19 to 29%), thrombocytopenia (range, 5 to 17%), and anemia (range, 0 to 9%) occurred in patients treated with IMBRUVICA. Monitor complete blood counts monthly.

Atrial Fibrillation: Atrial fibrillation and atrial flutter (range, 6 to 9%) have occurred in patients treated with IMBRUVICA, particularly in patients with cardiac risk factors, acute infections, and a previous history of atrial fibrillation. Periodically monitor patients clinically for atrial fibrillation. Patients who develop arrhythmic symptoms (e.g., palpitations, lightheadedness) or new onset dyspnea should have an ECG performed.

If atrial fibrillation persists, consider the risks and benefits of IMBRUVICA treatment and dose modification [see Dosage and Administration (2.3) in Full Prescribing Information].

Second Primary Malignancies: Other malignancies (range, 5 to 14%) including non-skin carcinomas (range, 1 to 3%) have occurred in patients treated with IMBRUVICA. The most frequent second primary malignancy was non-melanoma skin cancer (range, 4 to 11 %).

Tumor Lysis Syndrome: Tumor lysis syndrome has been reported with IMBRUVICA therapy. Monitor patients closely and take appropriate precautions in patients at risk for tumor lysis syndrome (e.g. high tumor burden).

Embryo-Fetal Toxicity: Based on findings in animals, IMBRUVICA can cause fetal harm when administered to a pregnant woman. Ibrutinib caused malformations in rats at exposures 14 times those reported in patients with MCL and 20 times those reported in patients with CLL or WM, receiving the ibrutinib dose of 560 mg per day and 420 mg per day, respectively. Reduced fetal weights were observed at lower exposures. Advise women to avoid becoming pregnant while taking IMBRUVICA. If this drug is used during pregnancy or if the patient becomes pregnant while taking this drug, the patient should be apprised of the potential hazard to a fetus [see Use in Specific Populations].

ADVERSE REACTIONS The following adverse reactions are discussed in more detail in other sections of the labeling: • Hemorrhage [see Warnings and Precautions] • Infections [see Warnings and Precautions] • Cytopenias [see Warnings and Precautions] • Atrial Fibrillation [see Warnings and Precautions] • Second Primary Malignancies [see Warnings and Precautions] • Tumor Lysis Syndrome [see Warnings and Precautions]

IMBRUVICA® (ibrutinib) capsules Because clinical trials are conducted under widely variable conditions, adverse event rates observed in clinical trials of a drug cannot be directly compared with rates of clinical trials of another drug and may not reflect the rates observed in practice.

Clinical Trials Experience: Mantle Cell Lymphoma: The data described below reflect exposure to IMBRUVICA in a clinical trial that included 111 patients with previously treated MCL treated with 560 mg daily with a median treatment duration of 8.3 months.

The most commonly occurring adverse reactions (≥ 20%) were thrombocytopenia, diarrhea, neutropenia, anemia, fatigue, musculoskeletal pain, peripheral edema, upper respiratory tract infection, nausea, bruising, dyspnea, constipation, rash, abdominal pain, vomiting and decreased appetite (see Tables 1 and 2).

The most common Grade 3 or 4 non-hematological adverse reactions (≥ 5%) were pneumonia, abdominal pain, atrial fibrillation, diarrhea, fatigue, and skin infections.

Fatal and serious cases of renal failure have occurred with IMBRUVICA therapy. Increases in creatinine 1.5 to 3 times the upper limit of normal occurred in 9% of patients.

Adverse reactions from the MCL trial (N=111) using single agent IMBRUVICA 560 mg daily occurring at a rate of ≥ 10% are presented in Table 1.

Table 1: Non-Hematologic Adverse Reactions in ≥ 10% of Patients with MCL (N=111) System Organ Class Gastrointestinal disorders

Infections and infestations

General disorders and administrative site conditions Skin and subcutaneous tissue disorders Musculoskeletal and connective tissue disorders Respiratory, thoracic and mediastinal disorders Metabolism and nutrition disorders Nervous system disorders

Preferred Term Diarrhea Nausea Constipation Abdominal pain Vomiting Stomatitis Dyspepsia Upper respiratory tract infection Urinary tract infection Pneumonia Skin infections Sinusitis Fatigue Peripheral edema Pyrexia Asthenia Bruising Rash Petechiae Musculoskeletal pain Muscle spasms Arthralgia Dyspnea Cough Epistaxis Decreased appetite Dehydration Dizziness Headache

All Grades (%) 51 31 25 24 23 17 11

Grade 3 or 4 (%) 5 0 0 5 0 1 0

34 14 14 14 13 41 35 18 14 30 25 11 37 14 11 27 19 11 21 12 14 13

0 3 7 5 1 5 3 1 3 0 3 0 1 0 0 4 0 0 2 4 0 0

Table 2: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or Neutrophils in Patients with MCL (N=111)

Platelets Decreased Neutrophils Decreased Hemoglobin Decreased

Percent of Patients (N=111) All Grades Grade 3 or 4 (%) (%) 57 17 47 29 41 9

* Based on laboratory measurements and adverse reactions Ten patients (9%) discontinued treatment due to adverse reactions in the trial (N=111). The most frequent adverse reaction leading to treatment discontinuation was subdural hematoma (1.8%). Adverse reactions leading to dose reduction occurred in 14% of patients.

IMBRUVICA® (ibrutinib) capsules

IMBRUVICA® (ibrutinib) capsules

Patients with MCL who develop lymphocytosis greater than 400,000/mcL have developed intracranial hemorrhage, lethargy, gait instability, and headache. However, some of these cases were in the setting of disease progression.

Forty percent of patients had elevated uric acid levels on study including 13% with values above 10 mg/dL. Adverse reaction of hyperuricemia was reported for 15% of patients.

Chronic Lymphocytic Leukemia: The data described below reflect exposure to IMBRUVICA in an open label clinical trial (Study 1) that included 48 patients with previously treated CLL and a randomized clinical trial (Study 2) that included 391 randomized patients with previously treated CLL or SLL. The most commonly occurring adverse reactions in Study 1 and Study 2 (≥ 20%) were thrombocytopenia, neutropenia, diarrhea, anemia, fatigue, musculoskeletal pain, upper respiratory tract infection, rash, nausea, and pyrexia.

Approximately five percent of patients receiving IMBRUVICA in Study 1 and Study 2 discontinued treatment due to adverse events. These included infections, subdural hematomas and diarrhea. Adverse events leading to dose reduction occurred in approximately 6% of patients.

Study 1: Adverse reactions and laboratory abnormalities from the CLL trial (N=48) using single agent IMBRUVICA 420 mg daily occurring at a rate of ≥ 10% are presented in Tables 3 and 4.

Table 3: Non-Hematologic Adverse Reactions in ≥ 10% of Patients with CLL (N=48) in Study 1 System Organ Class Gastrointestinal disorders

Infections and infestations

General disorders and administrative site conditions Skin and subcutaneous tissue disorders Respiratory, thoracic and mediastinal disorders Musculoskeletal and connective tissue disorders Nervous system disorders Metabolism and nutrition disorders Neoplasms benign, malignant, unspecified Injury, poisoning and procedural complications Psychiatric disorders Vascular disorders

All Grades (%)

Grade 3 or 4 (%)

Diarrhea Constipation Nausea Stomatitis Vomiting Abdominal pain Dyspepsia Upper respiratory tract infection Sinusitis Skin infection Pneumonia Urinary tract infection Fatigue Pyrexia Peripheral edema Asthenia Chills Bruising Rash Petechiae Cough Oropharyngeal pain Dyspnea Musculoskeletal pain Arthralgia Muscle spasms Dizziness Headache Peripheral neuropathy Decreased appetite

63 23 21 21 19 15 13

4 2 2 0 2 0 0

48 21 17 10 10 31 25 23 13 13 54 27 17 19 15 10 27 23 19 21 19 10 17

2 6 6 8 0 4 2 0 4 0 2 0 0 0 0 0 6 0 2 0 2 0 2

Second malignancies*

10*

0

Laceration

10

2

Anxiety Insomnia Hypertension

10 10 17

0 0 8

Preferred Term

*One patient death due to histiocytic sarcoma.

Table 4: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or Neutrophils in Patients with CLL (N=48) in Study 1 Percent of Patients (N=48) All Grades Grade 3 or 4 (%) (%) Platelets Decreased 71 10 Neutrophils Decreased 54 27 Hemoglobin Decreased 44 0 * Based on laboratory measurements per IWCLL criteria and adverse reactions Study 2: Adverse reactions and laboratory abnormalities described below in Tables 5 and 6 reflect exposure to IMBRUVICA with a median duration of 8.6 months and exposure to ofatumumab with a median of 5.3 months in Study 2.

Table 5: Non-Hematologic Adverse Reactions ≥ 10% Reported in Study 2

System Organ Class ADR Term Gastrointestinal disorders Diarrhea Nausea Stomatitis* Constipation Vomiting General disorders and administration site conditions Fatigue Pyrexia Infections and infestations Upper respiratory tract infection Pneumonia* Sinusitis* Urinary tract infection Skin and subcutaneous tissue disorders Rash* Petechiae Bruising* Musculoskeletal and connective tissue disorders Musculoskeletal Pain* Arthralgia Nervous system disorders Headache Dizziness Injury, poisoning and procedural complications Contusion Eye disorders Vision blurred

IMBRUVICA (N=195) All Grade Grades 3 or 4 (%) (%)

Ofatumumab (N=191) All Grade Grades 3 or 4 (%) (%)

48 26 17 15 14

4 2 1 0 0

18 18 6 9 6

2 0 1 0 1

28 24

2 2

30 15

2 1

16 15 11 10

1 10 1 4

11 13 6 5

2 9 0 1

24 14 12

3 0 0

13 1 1

0 0 0

28 17

2 1

18 7

1 0

14 11

1 0

6 5

0 0

11

0

3

0

10

0

3

0

Subjects with multiple events for a given ADR term are counted once only for each ADR term.

The system organ class and individual ADR terms are sorted in descending frequency order in the IMBRUVICA arm. * Includes multiple ADR terms

IMBRUVICA® (ibrutinib) capsules

IMBRUVICA® (ibrutinib) capsules

Table 6: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or Neutrophils in Study 2

Neutrophils Decreased Platelets Decreased Hemoglobin Decreased

IMBRUVICA (N=195) Grade All 3 or 4 Grades (%) (%) 51 23 52 5 36 0

Ofatumumab (N=191) Grade All 3 or 4 Grades (%) (%) 57 26 45 10 21 0

* Based on laboratory measurements per IWCLL criteria Waldenström’s Macroglobulinemia The data described below reflect exposure to IMBRUVICA in an open label clinical trial that included 63 patients with previously treated WM. The most commonly occurring adverse reactions in the WM trial (≥ 20%) were neutropenia, thrombocytopenia, diarrhea, rash, nausea, muscle spasms, and fatigue.

Six percent of patients receiving IMBRUVICA in the WM trial discontinued treatment due to adverse events. Adverse events leading to dose reduction occurred in 11% of patients.

Adverse reactions and laboratory abnormalities described below in Tables 7 and 8 reflect exposure to IMBRUVICA with a median duration of 11.7 months in the WM trial.

Table 7: Non-Hematologic Adverse Reactions in ≥ 10% of Patients with Waldenström’s Macroglobulinemia (N=63) System Organ Class Gastrointestinal disorders

Skin and subcutaneous tissue disorders General disorders and administrative site conditions Musculoskeletal and connective tissue disorders Infections and infestations

Respiratory, thoracic and mediastinal disorders Nervous system disorders Neoplasms benign, malignant, and unspecified (including cysts and polyps)

All Grades (%) 37 21 16

Grade 3 or 4 (%) 0 0 0

13 22 16 11 21

0 0 0 0 0

Muscle spasms Arthropathy

21 13

0 0

Upper respiratory tract infection Sinusitis Pneumonia* Skin infection* Epistaxis Cough

19 19 14 14 19 13

0 0 6 2 0 0

Dizziness Headache Skin cancer*

14 13 11

0 0 0

Preferred Term Diarrhea Nausea Stomatitis* Gastroesophageal reflux disease Rash* Bruising* Pruritus Fatigue

The system organ class and individual ADR terms are sorted in descending frequency order. * Includes multiple ADR terms.

Table 8: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or Neutrophils in Patients with WM (N=63)

Platelets Decreased Neutrophils Decreased Hemoglobin Decreased

Percent of Patients (N=63) All Grades (%) Grade 3 or 4 (%) 43 13 44 19 13 8

* Based on laboratory measurements.

Postmarketing Experience: The following adverse reactions have been identified during post-approval use of IMBRUVICA. Because these reactions are reported voluntarily from a population of uncertain size, it is not always possible to reliably estimate their frequency or establish a causal relationship to drug exposure.

Hypersensitivity reactions including anaphylactic shock (fatal), urticaria, and angioedema have been reported.

DRUG INTERACTIONS Ibrutinib is primarily metabolized by cytochrome P450 enzyme 3A. CYP3A Inhibitors: In healthy volunteers, co-administration of ketoconazole, a strong CYP3A inhibitor, increased Cmax and AUC of ibrutinib by 29- and 24-fold, respectively. The highest ibrutinib dose evaluated in clinical trials was 12.5 mg/kg (actual doses of 840 – 1400 mg) given for 28 days with single dose AUC values of 1445 ± 869 ng • hr/mL which is approximately 50% greater than steady state exposures seen at the highest indicated dose (560 mg).

Avoid concomitant administration of IMBRUVICA with strong or moderate inhibitors of CYP3A. For strong CYP3A inhibitors used short-term (e.g., antifungals and antibiotics for 7 days or less, e.g., ketoconazole, itraconazole, voriconazole, posaconazole, clarithromycin, telithromycin) consider interrupting IMBRUVICA therapy during the duration of inhibitor use. Avoid strong CYP3A inhibitors that are needed chronically. If a moderate CYP3A inhibitor must be used, reduce the IMBRUVICA dose.

Patients taking concomitant strong or moderate CYP3A4 inhibitors should be monitored more closely for signs of IMBRUVICA toxicity [see Dosage and Administration (2.4) in Full Prescribing Information].

Avoid grapefruit and Seville oranges during IMBRUVICA treatment, as these contain moderate inhibitors of CYP3A [see Dosage and Administration (2.4), and Clinical Pharmacology (12.3) in Full Prescribing Information].

CYP3A Inducers: Administration of IMBRUVICA with rifampin, a strong CYP3A inducer, decreased ibrutinib Cmax and AUC by approximately 13- and 10-fold, respectively.

Avoid concomitant use of strong CYP3A inducers (e.g., carbamazepine, rifampin, phenytoin and St. John’s Wort). Consider alternative agents with less CYP3A induction [see Clinical Pharmacology (12.3) in Full Prescribing Information].

USE IN SPECIFIC POPULATIONS Pregnancy: Pregnancy Category D [see Warnings and Precautions].

Risk Summary: Based on findings in animals, IMBRUVICA can cause fetal harm when administered to a pregnant woman. If IMBRUVICA is used during pregnancy or if the patient becomes pregnant while taking IMBRUVICA, the patient should be apprised of the potential hazard to the fetus.

Animal Data: Ibrutinib was administered orally to pregnant rats during the period of organogenesis at oral doses of 10, 40 and 80 mg/kg/day. Ibrutinib at a dose of 80 mg/kg/day was associated with visceral malformations (heart and major vessels) and increased post-implantation loss. The dose of 80 mg/kg/day in animals is approximately 14 times the exposure (AUC) in patients with MCL and 20 times the exposure in patients with CLL or WM administered the dose of 560 mg daily and 420 mg daily, respectively. Ibrutinib at doses of 40 mg/kg/day or greater was associated with decreased fetal weights. The dose of 40 mg/kg/day in animals is approximately 6 times the exposure (AUC) in patients with MCL administered the dose of 560 mg daily.

Nursing Mothers: It is not known whether ibrutinib is excreted in human milk. Because many drugs are excreted in human milk and because of the potential for serious adverse reactions in nursing infants from IMBRUVICA, a decision should be made whether to discontinue nursing or to discontinue the drug, taking into account the importance of the drug to the mother.

Pediatric Use: The safety and effectiveness of IMBRUVICA in pediatric patients has not been established.

Geriatric Use: Of the 111 patients treated for MCL, 63% were 65 years of age or older. No overall differences in effectiveness were observed between these patients and younger patients. Cardiac adverse events (atrial fibrillation and hypertension), infections (pneumonia and cellulitis) and gastrointestinal events (diarrhea and dehydration) occurred more frequently among elderly patients.

Of the 391 patients randomized in Study 2, 61% were ≥ 65 years of age. No overall differences in effectiveness were observed between age groups.

Grade 3 or higher adverse events occurred more frequently among elderly patients treated with IMBRUVICA (61% of patients age ≥ 65 versus 51% of younger patients) [see Clinical Studies (14.2) in Full Prescribing Information].

Of the 63 patients treated for WM, 59% were 65 years of age or older.

No overall differences in effectiveness were observed between these patients and younger patients. Cardiac adverse events (atrial fibrillation and hypertension), and infections (pneumonia and urinary tract infection) occurred more frequently among elderly patients.

Renal Impairment: Less than 1% of ibrutinib is excreted renally. Ibrutinib exposure is not altered in patients with Creatinine clearance (CLcr) > 25 mL/min. There are no data in patients with severe renal impairment (CLcr < 25 mL/min) or patients on dialysis [see Clinical Pharmacology (12.3) in Full Prescribing Information].

IMBRUVICA® (ibrutinib) capsules Hepatic Impairment: Ibrutinib is metabolized in the liver. In a hepatic impairment study, data showed an increase in ibrutinib exposure.

Following single dose administration, the AUC of ibrutinib increased 2.7-, 8.2- and 9.8-fold in subjects with mild (Child-Pugh class A), moderate (Child-Pugh class B), and severe (Child-Pugh class C) hepatic impairment compared to subjects with normal liver function. The safety of IMBRUVICA has not been evaluated in patients with hepatic impairment.

Monitor patients for signs of IMBRUVICA toxicity and follow dose modification guidance as needed. It is not recommended to administer IMBRUVICA to patients with moderate or severe hepatic impairment (Child-Pugh classes B and C) [see Dosage and Administration (2.5) and Clinical Pharmacology (12.3) in Full Prescribing Information].

Females and Males of Reproductive Potential: Advise women to avoid becoming pregnant while taking IMBRUVICA because IMBRUVICA can cause fetal harm [see Use in Specific Populations].

Plasmapheresis: Management of hyperviscosity in patients with WM may include plasmapheresis before and during treatment with IMBRUVICA. Modifications to IMBRUVICA dosing are not required.

PATIENT COUNSELING INFORMATION See FDA-approved patient labeling (Patient Information).

• Hemorrhage: Inform patients of the possibility of bleeding, and to report any signs or symptoms (blood in stools or urine, prolonged or uncontrolled bleeding). Inform the patient that IMBRUVICA may need to be interrupted for medical or dental procedures [see Warnings and Precautions].

• Infections: Inform patients of the possibility of serious infection, and to report any signs or symptoms (fever, chills, weakness, confusion) suggestive of infection [see Warnings and Precautions].

• Atrial Fibrillation: Counsel patients to report any signs of palpitations, lightheadedness, dizziness, fainting, shortness of breath, and chest discomfort [see Warnings and Precautions].

• Second primary malignancies: Inform patients that other malignancies have occurred in patients who have been treated with IMBRUVICA, including skin cancers and other carcinomas [see Warnings and Precautions].

• Tumor lysis syndrome: Inform patients of the potential risk of tumor lysis syndrome and report any signs and symptoms associated with this event to their healthcare provider for evaluation [see Warnings and Precautions].

• Embryo-fetal toxicity: Advise women of the potential hazard to a fetus and to avoid becoming pregnant [see Warnings and Precautions].

• Inform patients to take IMBRUVICA orally once daily according to their physician’s instructions and that the capsules should be swallowed whole with a glass of water without being opened, broken, or chewed at approximately the same time each day [see Dosage and Administration (2.1) in Full Prescribing Information].

• Advise patients that in the event of a missed daily dose of IMBRUVICA, it should be taken as soon as possible on the same day with a return to the normal schedule the following day. Patients should not take extra capsules to make up the missed dose [see Dosage and Administration (2.5) in Full Prescribing Information].

• Advise patients of the common side effects associated with IMBRUVICA [see Adverse Reactions]. Direct the patient to a complete list of adverse drug reactions in PATIENT INFORMATION. • Advise patients to inform their health care providers of all concomitant medications, including prescription medicines, over-the-counter drugs, vitamins, and herbal products [see Drug Interactions].

• Advise patients that they may experience loose stools or diarrhea, and should contact their doctor if their diarrhea persists. Advise patients to maintain adequate hydration.

Active ingredient made in China.

Distributed and Marketed by: Pharmacyclics, Inc. Sunnyvale, CA USA 94085 and Marketed by: Janssen Biotech, Inc. Horsham, PA USA 19044 Patent http://www.imbruvica.com IMBRUVICA® is a registered trademark owned by Pharmacyclics, Inc. © Pharmacyclics, Inc. 2015 © Janssen Biotech, Inc. 2015 PRC-00786

EDITORIAL BOARD EDITOR-IN-CHIEF

David B. Nash, MD, MBA Founding Dean, The Dr Raymond C. and Doris N. Grandon Professor, Jefferson School of Population Health Thomas Jefferson University, Philadelphia, PA DEPUTY EDITORS

Joseph D. Jackson, PhD Program Director, Applied Health Economics and Outcomes Research, Jefferson School of Population Health, Thomas Jefferson University Laura T. Pizzi, PharmD, MPH, RPh Professor, Dept. of Pharmacy Practice, Jefferson School of Pharmacy, Thomas Jefferson University AGING AND WELLNESS

Eric G. Tangalos, MD, FACP, AGSF, CMD Professor of Medicine Mayo Clinic, Rochester, MN CANCER RESEARCH

Al B. Benson, III, MD, FACP, FASCO Professor of Medicine, Associate Director for Clinical Investigations Robert H. Lurie Comprehensive Cancer Center Northwestern University, IL Samuel M. Silver, MD, PhD, FASCO Professor of Internal Medicine, Hematology/Oncology Assistant Dean for Research, Associate Director Faculty Group Practice, University of Michigan Medical School EMPLOYERS

Gregory Shaeffer, MBA, RPh, FASHP Vice President, Consulting Pharmacy Healthcare Solutions AmerisourceBurgen, Harrisburg, PA Arthur F. Shinn, PharmD, FASCP President, Managed Pharmacy Consultants, LLC, Lake Worth, FL F. Randy Vogenberg, RPh, PhD Principal, Institute for Integrated Healthcare Greenville, SC ENDOCRINOLOGY

James V. Felicetta, MD Chairman, Dept. of Medicine Carl T. Hayden Veterans Affairs Medical Center, Phoenix, AZ Quang T. Nguyen, DO, FACP, FACE Medical Director, Las Vegas Endocrinology Adjunct Associate Professor Endocrinology Touro University Nevada EPIDEMIOLOGY RESEARCH

Joshua N. Liberman, PhD Executive Director, Research, Development & Dissemination, Sutter Health, Concord, CA GOVERNMENT

Kevin B. “Kip” Piper, MA, FACHE President, Health Results Group, LLC Washington, DC HEALTH INFORMATION TECHNOLOGY

Kelly Huang, PhD Vice President and General Manager Aesthetic & Corrective Business Galderma Laboratories, LP Fort Worth, TX HEALTH OUTCOMES RESEARCH

Russell Basser, MBBS, MD, FRACP Senior Vice President Global Clinical Research and Development CSL Behring, King of Prussia, PA Diana Brixner, RPh, PhD Professor & Chair, Dept. of Pharmacotherapy Executive Director, Outcomes Research Center Director of Outcomes, Personalized Health Care Program, University of Utah, Salt Lake City

112

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Joseph E. Couto, PharmD, MBA Clinical Program Manager Cigna Corporation, Bloomfield, CT Steven Miff, PhD Senior Vice President VHA, Inc., Irving, TX Kavita V. Nair, PhD Professor and Director, Graduate Program Track in Pharmaceutical Outcomes Research Skaggs School of Pharmacy and Pharmaceutical Sciences University of Colorado, Aurora Gary M. Owens, MD President, Gary Owens Associates Ocean View, DE Andrew M. Peterson, PharmD, PhD Dean, Mayes School of Healthcare Business and Policy, Associate Professor, University of the Sciences, Philadelphia Sarah A. Priddy, PhD Director, Competitive Health Analytics Humana, Louisville, KY Timothy S. Regan, BPharm, RPh, CPh Executive Director, Strategic Accounts Xcenda, Palm Harbor, FL Vincent J. Willey, PharmD, BCACP Staff Vice President HealthCore, Inc., Wilmington, DE David W. Wright, MPH President, Institute for Interactive Patient Care Bethesda, MD HEALTH & VALUE PROMOTION

Craig Deligdish, MD Hematologist/Oncologist Oncology Resource Networks, Orlando, FL Thomas G. McCarter, MD, FACP Chief Clinical Officer Executive Health Resources, PA Byron C. Scott, MD, MBA Medical Director National Clinical Medical Leader Truven Health Analytics, Chicago, IL Albert Tzeel, MD, MHSA, FACPE Regional Medical Director Medicare Operations, North Florida Humana, Jacksonville MANAGED MARKETS

Jeffrey A. Bourret, PharmD, MS, BCPS, FASHP Senior Director, North America Medical Affairs Medical Lead, Specialty Payer & Channel Customer Strategy, Pfizer Inc Richard B. Weininger, MD Chairman, CareCore National, LLC Bluffton, SC PATIENT ADVOCACY

Mike Pucci Sr VP, Commercial Operations and Business Development, PhytoChem Pharmaceuticals Lake Gaston, NC

Jeff Jianfei Guo, BPharm, MS, PhD Professor of Pharmacoeconomics & Pharmacoepidemiology, College of Pharmacy Univ. of Cincinnati Medical Center, OH PHARMACY BENEFIT DESIGN

Joel V. Brill, MD, AGAF, CHCQM Chief Medical Officer, Predictive Health, Phoenix, AZ Teresa DeLuca, MD, MBA Assistant Clinical Professor, Psychiatry, Mount Sinai School of Medicine, New York, NY Leslie S. Fish, PharmD Vice President of Clinical Programs Fallon Community Health Plan, MA John Hornberger, MD, MS Cedar Associates, LLC CHP/PCOR Adjunct Associate, Menlo Park, CA Michael S. Jacobs, RPh MSJ Associates, Sandy Springs, GA Matthew Mitchell, PharmD, MBA, FAMCP Director, Pharmacy Services SelectHealth, Murray, UT Paul Anthony Polansky, BSPharm, MBA PAPRx, LLC Gulph Mills, PA Christina A. Stasiuk, DO, FACOI Senior Medical Director Cigna, Philadelphia, PA POLICY & PUBLIC HEALTH

Joseph R. Antos, PhD Wilson H. Taylor Scholar in Health Care Retirement Policy, American Enterprise Institute Washington, DC Robert W. Dubois, MD, PhD Chief Science Officer National Pharmaceutical Council, Washington, DC Jack E. Fincham, PhD, RPh Professor of Pharmacy, School of Pharmacy Presbyterian College, Clinton, SC Walid F. Gellad, MD, MPH Assistant Professor of Medicine, University of Pittsburgh, Staff Physician, Pittsburgh VA Medical Center, Adjunct Scientist, RAND Health Paul Pomerantz, MBA CEO, American Society of Anesthesiologists Park Ridge, IL J. Warren Salmon, PhD Professor of Health Policy & Administration School of Public Health University of Illinois at Chicago Raymond L. Singer, MD, MMM, CPE, FACS Chief, Division of Cardiothoracic Surgery Vice Chair, Department of Surgery for Quality & Patient Safety and Outreach Lehigh Valley Health Network, PA RESEARCH & DEVELOPMENT

PAYER-PROVIDER FINANCES

Bruce Pyenson, FSA, MAAA Principal & Consulting Actuary Milliman, Inc, New York, NY

Christopher (Chris) P. Molineaux President, Pennsylvania BIO Malvern, PA Michael F. Murphy, MD, PhD Chief Medical Officer and Scientific Officer Worldwide Clinical Trials King of Prussia, PA

PERSONALIZED MEDICINE

SPECIALTY PHARMACY

Amalia M. Issa, PhD, MPH Director, Program in Personalized Medicine & Targeted Therapeutics, University of the Sciences, Philadelphia PHARMACOECONOMICS

Josh Feldstein President & CEO, CAVA, The Center for Applied Value Analysis, Inc, Norwalk, CT

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Atheer A. Kaddis, PharmD Senior Vice President Sales and Business Development Diplomat Specialty Pharmacy, Flint, MI James T. Kenney, Jr, RPh, MBA Pharmacy Operations Manager, Harvard Pilgrim Health Care, Wellesley, MA Michael Kleinrock Director, Research Development IMS Institute for Healthcare Informatics

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PUBLISHING STAFF Senior Vice President/Group Publisher Nicholas Englezos nenglezos@the-lynx-group.com Directors, Client Services Joe Beck jbeck@the-lynx-group.com Zach Ceretelle zceretelle@the-lynx-group.com Ron Gordon rgordon@the-lynx-group.com Senior Editorial Director Dalia Buffery dbuffery@the-lynx-group.com Senior Associate Editor Lilly Ostrovsky Associate Editor Lara J. Lorton Editorial Assistant Cara Guglielmon Production Manager Cara Nicolini Founding Editor-in-Chief Robert E. Henry

EDITORIAL

116 Did the “HEN” Lay a Rotten Egg?

David B. Nash, MD, MBA REGULATORY

118 Breaking the Bank: Three Financing Models for Addressing the Drug Innovation Cost Crisis J.D. Kleinke; Nancy McGee, DrPH 125 Stakeholder Perspective: Financing Drug Innovation: Cost versus Cure

By Joseph R. Antos, PhD BUSINESS

129 Demonstrating Value for Biosimilars: A Conceptual Framework Sotiris Rompas, PhD; Thomas Goss, PharmD; Sally Amanuel, BSc, MA, MBA; Victoria Coutinho, BSc, PhD; Zhihong Lai, PhD; Paola Antonini, MD, PhD; Michael F. Murphy, MD, PhD 138 Stakeholder Perspective: Challenges Surrounding the New Biosimilars Landscape

By Michael Kleinrock Continued on page 114

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This publication further provides benefit design de­cision makers the integrated industry information they require to devise formularies and benefit designs that stand up to today’s special healthcare delivery and business needs.

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TABLE OF CONTENTS

(Continued)

BUSINESS

148 Adherence to Insulin Pen Therapy Is Associated with Reduction in Healthcare Costs Among Patients with Type 2 Diabetes Mellitus Arthi Chandran, MS, MPH; Machaon K. Bonafede, PhD, MPH; Sonali Nigam, MPH; Rita Saltiel-Berzin, RN, MPH, CDE, CHES; Laurence J. Hirsch, MD; Betsy J. Lahue, MPH 157 Stakeholder Perspective: Adherence to Antihyperglycemic Treatment Regimen Also Reduces Overall Costs

By Quang T. Nguyen, DO, FACP, FACE, FTOS AMCP 2015 HIGHLIGHTS

144 Payers’ Perspectives: Health Economics Outcomes in Managed Care

By Charles Bankhead, Medical Writer

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EDITORIAL

Did the “HEN” Lay a Rotten Egg? David B. Nash, MD, MBA Editor-in-Chief, American Health & Drug Benefits; Founding Dean, J ­ efferson School of Population Health, Philadelphia, PA

M

uch of the focus regarding the implementation of the Affordable Care Act (ACA) has centered on the success (or failure) of healthcare. gov, but other important components of the wide-ranging bill had garnered little attention. As a result, I am forced to ask the following question—“Did the HEN [Hospital Engagement Network] lay a rotten egg?”

In April 2011, “the US Department of Health and Human Services (HHS) joined leaders representing hospitals, employers, health plans, physicians, nurses, and other health professionals, patient advocates, and State and Federal governments to launch the Partnership for Patients, a nationwide public-private initiative to keep patients from being harmed in hospitals and heal without complication.” 1 This Partnership for Patients Program (PPP) was created by the Centers for Medicare & Medicaid Services (CMS) through its Innovation Center, based on the direct authority given to CMS via the ACA. Central to this “partnership” are the 27 HENs. “The HENs work at the regional, state, national, or hospital system level to help identify solutions already working and disseminate them to other hospitals and providers.” 1 Among the 27 HENs are groups such as the American Hospital Association at the national level, the Voluntary Hospital Association of America (a group that Jefferson School of Population Health works with very closely), and the Hospital & Healthsystem Association of Pennsylvania (HAP).

Sounds good, doesn’t it? The HENs represent more than 3700 hospitals, and their stated primary goals in the HHS/CMS report were to reduce preventable, hospital-­ acquired conditions by 40%, and 30-day readmissions by 20% between 2010 and 2014.1 How did this work? What were the results of this so-called partnership?

How to interpret the results of this report depends on whom you believe, and hence my question at the opening of this editorial. According to the HHS/CMS report, the HEN has been a rousing success!1 For example, the report from CMS (and HHS) claims that obstetric trauma rates have decreased by 15.8% and early elective deliveries have been reduced by 64.5%.1 In addition, “the all-cause 30-day hospital readmission rate among Medicare fee-for-service beneficiaries plummeted further to

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approximately 17.5 percent in 2013, translating into an estimated 150,000 fewer hospital readmissions between January 2012 and December 2013. This represents an 8 percent reduction in the Medicare fee-for-service allcause 30-day readmissions rate.” 1 At his presentation at the Jefferson School of Population Health monthly Population Health Forum in December 2014, Michael Conseulos, MD, MBA, Senior Vice President for Clinical Integration at HAP, extolled the virtues of Pennsylvania’s participation in the HEN.2 Although HAP is appropriately proud to participate in the HEN, the data show that across multiple dimensions of healthcare performance, including access, affordability, prevention, and equity, the state of Pennsylvania fell from number 14 nationwide in 2009 to number 22 in 2014.2 In a 2014 perspective published in the New England Journal of Medicine, 2 nationally regarded experts, Peter Pronovost, MD, PhD, Director, Armstrong Institute for Patient Safety and Quality, Johns Hopkins Medicine, and Ashish K. Jha, MD, MPH, Director, Harvard Global Health Institute, noted that “the PPP’s weak study design and methods, combined with a lack of transparency and rigor in evaluation, make it difficult to determine whether the program improved care. Such deficiencies result in a failure to learn from improvement efforts and stifle progress toward a safer, more effective health care system.” 3 Pronovost and Jha go on to severely criticize the HEN program, noting that “CMS allowed each HEN to define its own performance measures, with little focus on data quality control….CMS also required HENs and participating hospitals to submit a large number of process measures of unknown validity….Finally, CMS made— and presented publicly—inferences about its program’s benefits without having subjected its work to independent evaluation or peer review.” 3 From a public policy perspective, we surely have a conundrum here. The information provided in the HHS/CMS report claims dramatic improvements in hospital performance in the 4-year period between 2010 and 2014.1 Did this nearly $1-billion investment,3 all because of the ACA, actually improve care? (It should

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also be noted that this $1 billion represents 3 times the a more transparent and robust funding stream, with betannual budget of the Agency for Healthcare Research ter peer review, to reduce mistakes and improve outand Quality,3 the scientific home of most research in comes. If we fail, that rotten egg smell will continue to quality and safety in our country.) linger in the air.

Pronovost and Jha believe that there were well-­ regarded research alternatives available to CMS that We need a national conversation about real might have solidified the results and given greater confidence to researchers in our field. For example, Pronovost advances in the quality and safety of the and Jha called for an interrupted time-series study design care we deliver. We need a more transparent with concurrent controls, “rather than having a single pre time period and a single post time period” 3 design. and robust funding stream, with better peer More important, however, Pronovost and Jha noted that review, to reduce mistakes and improve “failing to attend closely to issues of design, methods, and outcomes. If we fail, that rotten egg smell metrics leaves us with little confidence in an intervention. For the PPP, which required thousands of hours of will continue to linger in the air. clinicians’ time and large sums of money, that lack of confidence is particularly unfortunate.” 3 As always, I remain interested in your views about the So, did the HEN lay a rotten egg? On the one hand, quality of research on quality. You can reach me at david. states and major national organizations representing nash@jefferson.edu. n thousands of hospitals working together to improve clinReferences ical outcomes sure sounds good to me. On the other 1. US Department of Health & Human Services. Centers for Medicare & hand, the critique by Pronovost and Jha is nearly damnMedicaid Services. New HHS data shows major strides made in patient safety, leading to improved care and savings. May 7, 2014. http://innovation.cms.gov/ ing, and calls into serious question the results of this very Files/reports/patient-safety-results.pdf. Accessed April 2, 2015. important, publicly funded program. Where does this 2. Conseulos MJ. Transforming healthcare in Pennsylvania: preparing for the leave us? future. Presented at the Jefferson School of Population Health Forum; December 10, 2014. http://jdc.jefferson.edu/hpforum/87/.

We need a national conversation about real advances 3. Pronovost P, Jha AK. Did hospital engagement networks actually improve in the quality and safety of the care we deliver. We need care? N Engl J Med. 2014;371:691-693.

VISIT OUR ENHANCED USER-FRIENDLY WEBSITE American Health & Drug Benefits is an independent, peer-reviewed journal founded in 2008 Examines drug and other healthcare intervention value for payers, purchasers, providers, patients, manufacturers, regulators, distributors, and evaluators Provides up-to-date information on new drugs approved by the FDA

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REVIEW ARTICLE

Breaking the Bank: Three Financing Models for Addressing the Drug Innovation Cost Crisis J.D. Kleinke; Nancy McGee, DrPH

Stakeholder Perspective, page 125

Am Health Drug Benefits.

2015;8(3):118-126 www.AHDBonline.com Received January 8, 2015 Accepted in final form April 6, 2015

Disclosures are at end of text

BACKGROUND: The introduction of innovative specialty pharmaceuticals with high prices has renewed efforts by public and private healthcare payers to constrain their utilization, increase patient cost-sharing, and compel government intervention on pricing. These efforts, although rational for individual payers, have the potential to undermine the public health impact and overall economic value of these innovations for society. The emerging archetypal example is the outcry over the cost of sofosbuvir, a drug proved to cure hepatitis C infection at a cost of $84,000 per person for a course of treatment (or $1000 per tablet).

This represents a radical medical breakthrough for public health, with great promise for the long-term costs associated with this disease, but with major short-term cost implications for the budgets of healthcare payers.

OBJECTIVES: To propose potential financing models to provide a workable and lasting solution that directly addresses the misalignment of incentives between healthcare payers confronted with the high upfront costs of innovative specialty drugs and the rest of the US healthcare system, and to articulate these in the context of the historic struggle over paying for innovation.

DISCUSSION: We describe 3 innovative financing models to manage expensive specialty drugs that will significantly reduce the direct, immediate cost burden of these drugs to public and private healthcare payers. The 3 financing models include high-cost drug mortgages, high-cost drugs reinsurance, and highcost drug patient rebates. These models have been proved successful in other areas and should be adopted into healthcare to mitigate the high-cost of specialty drugs. We discuss the distribution of this burden over time and across the healthcare system, and we match the financial burden of medical innovations to the healthcare stakeholders who capture their overall value. All 3 models work within or replicate the current healthcare marketplace mechanisms for distributing immediate high-cost events across multiple at-risk stakeholders, and/or encouraging active participation by patients as consumers.

CONCLUSION: The adoption of these 3 models for the financing of high-cost drugs would ameliorate decades-long economic conflict in the healthcare system over the value of, and financial responsibility for, drug innovation.

KEY WORDS: specialty pharmaceuticals, drug innovation, US healthcare system, healthcare payers, drug industry; financing models, high-cost drugs, drug mortgages, amortization, reinsurance, patient rebates, copayments

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et us travel back in time to 2002. “Managed care” had been identified as the source of everything wrong with the healthcare system. Public furor over “skyrocketing” drug prices was reaching its zenith, with movements at the grassroots state and federal levels in support of the “reimportation” of cheaper drugs from overseas, and perennial outrage over the US healthcare costs was spreading from corporate buyers to the public at large.

Mr Kleinke is an independent medical economist, healthcare information technology expert, and author; Dr McGee is Senior Director, Castlight Health. Castlight Health is a pioneer of the Enterprise Healthcare Cloud and a leading provider of cloudbased software for healthcare.

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Why? Because in 2002, the nation’s payers were in the process of radically reshaping drug benefit designs into what is now the predominant standard in health benefits. Under these new designs, patient copayments were pegged to old drug formularies and were newly organized into coverage “tiers,” with those copayments tracking, albeit roughly, with prices charged by drug manufacturers.1 Back then, “consumer-directed healthcare” as applied to the pharmacy meant that the more expensive a drug was, the more of that expense a patient should share.2 Between the late 1990s and early 2000s, most Americans who had health insurance went from full drug coverage, with little or no cost-sharing to highly struc-

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tured benefit designs in health insurance coverage. By 2010, the number of Americans whose health insurance coverage included drug formularies was nearly 80%.3 Some formularies were expansive, and others were highly restrictive. The result was patients’ exposure to drug prices, and popular and political anger at the drug industry. The resulting zeitgeist was strong and pervasive enough to help pave the way for the passage of the Medicare Part D drug benefit. Part D represented more drug coverage for increasing numbers of Medicare beneficiaries, using those benefit designs, but with no price controls, centralized price negotiation, or reimportation.

The public’s fury over drug prices and the demonization of the drug industry slowly receded, aided by the influx of generic drugs in the 2000s.4 Thanks to a slow, steady rise over the past decade in the number and availability of specialty pharmaceuticals, the exact same debate has reemerged in 3 areas of conflict: drug prices, the cost of covering more individuals with an increasing need for drug treatment, and the complexity of coverage allocation. These points of conflict were not new in 2002, nor are they new today.

Since the 1990s, the manufacturers that develop and market new drugs have funded an echo chamber of scholars, papers, and industry events to explain the 3 things that payers least want to hear: 1. The complicated economics of drug discovery and development necessitate the drug prices that generate large profits commensurate with a drug manufacturer’s entire enterprise risk 2. Expensive new drugs that preclude surgeries, help patients avoid hospitalizations, and/or offset other medical costs save the overall US healthcare system money and are worth their high prices 3. Innovative new drugs are the engine of medical progress, our best hope against what are still the most dreaded diseases, and ought to consume an ever-larger share of a functioning healthcare economy.

Employers, insurers, and health plan administrators charged with paying for new drugs operate a parallel echo chamber to explain the 3 things the drug manufacturers least want to hear: 1. Drug prices are too high 2. Too many new drugs are not new at all but are extensions of old drugs and/or are only marginally better than much older and cheaper drugs 3. Too many patients are receiving drugs that do not add value and, combined with skyrocketing prices, are bankrupting the US healthcare system.

Based on our professional experience, payers tend to bolster all 3 arguments by pointing to drug advertising and the hapless complicity of the nation’s prescriber community.

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KEY POINTS A surge in expensive specialty drugs has renewed efforts by payers to limit their utilization, increase cost-sharing, and to compel government intervention on pricing. ➤ Despite much talk by healthcare stakeholders about value and value-driven care, access to innovative specialty drugs is reaching a state of crisis, with payers and drug manufacturers each blaming the other. ➤ Innovative new treatments designed to address serious diseases in targeted patient populations represent the future of medicine. ➤ Financial models are needed to offer practical, durable results for the misalignment of incentives between payers who face high upfront costs of these important drugs and the rest of the healthcare system. ➤ This article proposes 3 models that offer solutions for paying for high-cost drugs, including amortization, reinsurance, and rewarding adherence with copay reductions. ➤ These 3 models work within or copy current marketplace tools for distributing immediate highcost events across many at-risk parties and/or encouraging active participation by patients. ➤ Drug manufacturers, payers, and physicians need to collaborate to study the links between cost, benefit structure, policies, and payment, which dictate patient access to specialty drugs. ➤

Like many perennial arguments in healthcare, in some cases, one side is right, and, in other cases, the other side is right; in all cases, each side believes the other side is wrong. When the 2 sides come together in public to discuss drug prices, overall drug costs, and the value of medical innovation, each accuses the other of bad faith and irresponsibility to the greater good of healthcare.

All the “happy talk” about value creation is rarely, if ever, translated into actual changes in the business practices of each stakeholder.

Meanwhile, in the Real World Both sides of this debate have good reason to talk past each other: more than $87 billion in annual spending on specialty drugs is in play5; and for all the chatter in the healthcare industry about “partnering,” “value creation,”

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and “care optimization,” the game is zero-sum. Neither side cedes its high ground, drug manufacturers keep launching new drugs, and healthcare payers keep launching new benefit designs, pushing an ever higher share of costs onto patients. All the “happy talk” about value creation is rarely, if ever, translated into actual changes in the business practices of each stakeholder.

In 2014, we were back to the top of the cycle. The drug industry found renewed hope in the form of specialty pharmaceuticals.6 Specialty drugs are roughly defined as bioactive, large-molecule entities that involve highly specialized and sensitive manufacturing, distribution, and clinical administration.

Most specialty drugs are either injected by a provider or at least are delivered to patients in a controlled-care setting. Specialty drugs are used to treat serious, chronic, or life-threatening conditions; are typically priced significantly higher than traditional, small-molecule drugs; and generally do not have a low-cost generic equivalent.7 The estimated annual costs for these drugs may be several thousand dollars to more than $100,000.5

The majority of specialty drugs are not discretionary and cannot be dismissed as mere lifestyle improvement drugs; many of these drugs represent significant medical innovations in their clinical realms.

A relatively small patient population uses specialty drugs, but the per-patient costs are significant. In 2012, specialty drug spending was approximately $87 billion in the United States, comprising an estimated 25% of the total drug spending and representing an estimated 3.1% of the national healthcare spending.5 CVS Caremark identifies a key challenge of double-digit growth in specialty pharmacy drugs driving the overall rise in pharmacy spending, noting that approximately 3.6% of their members who use specialty drugs account for 25% of the plan’s healthcare costs.6 The current cycle of conflict over drug prices and costs will keep stakeholders distracted for a time while the market grinds its way toward a new equilibrium.

However, this cycle will most likely be of limited duration, because of the extreme cost factor associated with specialty drugs, critical differences in the clinical need for those drugs, and insurance coverage guarantees instituted by the Affordable Care Act (ACA).

The majority of specialty drugs are not discretionary and cannot be dismissed as mere lifestyle improvement drugs; many of these drugs represent significant medical innovations in their clinical realms. In many cases, these

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drugs are the only hope for seriously ill patients and represent true scientific breakthroughs. The extreme cost factor also pushes the rock of specialty drug costs against the hard place of out-of-pocket maximums that were put in place by the ACA, which seeks to expand coverage to those with no health insurance, as well as to ensure catastrophic coverage.

The larger part of the problem for payers may not be a specialty drug’s high cost for a treatment course as much as the total growth of this cost in the aggregate.

We now have new or relatively new specialty drugs to treat cystic fibrosis (ivacaftor [Kalydeco], at a cost of $294,000 per annual cost8); lupus (belimumab [Benlysta], at $35,000 per patient annually9); and multiple sclerosis (fingolimod [Gilenya], at $48,000 annually10). But these are specialty drugs for specific diseases, and they represent an epidemiologically contained part of the aggregate economic problem. The bigger economic threats associated with specialty drugs are those applicable to broader patient populations.

Currently, the archetypal example is sofosbuvir (Sovaldi), which has been proved to cure, not simply manage, hepatitis C infection, but at a cost of $84,000 for the treatment course (or $1000 per tablet).11 This price inspires gasps among people both inside and outside the commercial and public payer communities, but those inside these communities understand that the greater economic issue is not sofosbuvir’s price as much as the aggregate cost it represents for a payer’s population. Because hepatitis C affects a large population and is communicable, this lightning rod is not a discretionary drug.

There are few good reasons not to make sofosbuvir widely available to this patient population; for example, using rigorous utilization mechanisms to prevent access to a drug with sufficient clinical evidence of its efficacy in the absence of any other curative treatment is not reasonable from a business or a clinical perspective.

Sofosbuvir may be the lightning rod, but the storm rages on across the spectrum of specialty pharmaceuticals. How is a payer to parse the value of narrow innovations, such as ivacaftor for cystic fibrosis, versus larger population innovations, such as sofosbuvir for hepatitis C? To date, the response has been to lump all these innovations and their costs into 1 bucket, and to add a higher formulary tier for more expensive drugs, or a specialty pharmacy benefit, which is precisely what payers did in the early 2000s.

Back to the Future Why should a payer pay for healthcare? The practical answer for any healthcare payer organization is that they have no good reason to pay. Individuals or their employers move from one payer to another, or they go in and

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out of Medicaid, and all of a given payer’s investment in their members’ health “moves” with them. A big investment today in an innovative specialty drug will not reap long-term savings for most payers; the US healthcare system is not set up to provide healthcare payers with the upside of long-term savings, because there is no longterm in relation to private healthcare payers.

If a patient has the resources to overcome administrative obstacles erected by payers to deflect these forced investments, the payer ends up fully on the hook for the cost of the therapy anyway, a therapy with a diffuse economic impact that does not benefit the payer who pays, but the next payer and every payer thereafter, and either the patient’s employer, a private disability carrier, or society at large.

This is the same problem we deferred a decade ago, when innovative drugs and their associated costs inspired the first round of cost-sharing. But the question is as acute and important as ever: how do we pay the upfront costs of innovation for any given patient when the benefits of that innovation accrue to almost everyone but the one initially tasked with paying?

Financing Fixes for the Economic Disconnect in the US Healthcare System Is there a solution to this perennial “disconnect” between the interest of healthcare payers and the interests of everyone else? Broadly speaking, yes—by not asking the payer to pay for everything upfront, it may benefit everyone else.

There are 3 methods under which drugs can be financed to reduce their direct, immediate cost burden to payers and to other healthcare stakeholders with annual budgets: 1. The first method involves the amortization of an expensive drug’s costs over time12 2. The second method advocates a carve-out reinsurance model, which is applied to high-cost drug treatment regimens, such as those for very high-cost or catastrophic illnesses 3. The third represents the reward of a declining copayment over time with the demonstration of patient adherence to therapy.

These 3 methods serve to distribute the cost burden over time and across the healthcare system, while matching the financial burden of the innovation to those stakeholders who capture their overall value. Further, these methods can engage patients to be more accountable in the mechanics of their medical care, particularly when their only treatment alternative is an expensive therapy. All these methods have been originated or suggested in recent months by others13-15; we have not invented them, nor are we announcing them here or purporting to model them in this forum.

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Our goal in this article is to articulate these methods in the context of the historic struggle over paying for drug innovation, as summarized above, and to expose these potential solutions to the broader health policy community.

High-Cost Drugs Mortgages The amortization of a high, front-end cost over time is a relatively simplistic model that has been in existence for a long time. In the United States, mortgage models for financing the purchase of property date back to the early 1900s.16 Early home mortgages were difficult to secure, because many banks felt that it was too risky to lend more than 50% of an appraised home. Consequently, not many people could afford a mortgage.

To stimulate the marketplace and to offer protection, the National Housing Act of 1934 created the Federal Housing Administration and the Federal Savings and Loan Insurance Corporation to help make home mortgages more affordable while providing depositors in federal savings and loans with security.16 The intent was to encourage private-sector banks to issue loans while the

Financing mechanisms should be revised to take into account the elimination of downstream, long-term costs when a cure or a drug that leads to a cure comes to market. income from mortgage insurance premiums covers the cost of the program so that financial support would not need to come from the government.16 Aside from the current political environment in Congress, one could imagine that applying this type of model to finance the cost of drugs and reaching into the economic territory long inhabited by new homes is not an unimaginable course of action. If the benefit of therapy is to extend a patient’s life and/or to improve the patient’s quality of life, then payments can and should be matched accordingly.

The idea of amortizing high-cost drugs over a period of time was first articulated in the context of cancer drugs in 2003,13 but this idea has also emerged in numerous private discussions since the launch of sofosbuvir. In July 2014, Scott Gottlieb, MD, of the American Enterprise Institute (AEI), discussed the idea of amortizing highcost drugs in a policy brief,14 followed by an AEI panel discussion headed by Dr Gottlieb and titled “How Will We Pay for the Cost of Cures?” 15 The AEI panel included Gregg H. Alton from Gilead Sciences; Dirk Calcoen, MD, from Boston Scientific Group; Mark B. McClellan, MD, PhD, from the Brookings Institution and former FDA Commissioner; and Dan Mendelson, Founder and Chief Executive Officer of Avalere Health, a health policy company. The panel

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discussed the challenges related to paying for drugs that yield a cure, and generally reached consensus that financing mechanisms should be revised to take into account the elimination of downstream, long-term costs when a cure or a drug that leads to a cure comes to market.15 At the panel discussion, Mr Mendelson noted that pharmaceutical companies are interested in participating in and shaping value-based care models. He added that drug manufacturers would like to explore arrangements to manage populations of patients, including taking risk for health outcomes; however, they are impeded from doing so by the Best Price provision in the Medicaid Drug Rebate Program.15 The program requires manufacturers to enter into a drug rebate agreement with the Secretary of the US Department of Health & Human Services.8 In return, state Medicaid plans will cover most of the manufacturer’s drugs.8 The rebate for innovator drugs is currently the greater of 23.1% of the average manufacturer price (AMP) per unit or the difference between the AMP and the best price per unit, and is adjusted by the Consumer Price Index-Urban based on the drug’s launch date and the current quarter AMP.8 As a result, if a manufacturer enters into a contract outside of the Medicaid program in

In this reinsurance model, the economic challenge posed by high-cost drugs would be carved out from traditional insurance benefits. which the price is less than that provided under the Medicaid Drug Rebate Program, a wholesale change in price would need to occur to ensure that the best price was offered to Medicaid.

The AEI panel proposed an implementation model that “would allow a payer to spread out the costs over the period during which it would accrue the benefits of the reduced downstream costs from disease averted.” 14 Specifically, it outlined a model in which a healthcare payer enters into an agreement with a drug manufacturer, with terms that enable the payer to allocate the costs of the treatment in prescribed milestones, while the manufacturer allocates revenue on the same schedule or based on agreed-upon financing measures.14 One way to galvanize the effectiveness of this financing model would be to separate the total cost of a specific drug into discrete milestones, in which the milestones follow the patient across multiple payers and over time while tracking health outcomes. This would either neutralize the diffusion of economic benefits (as we referred to previously) or the payers’ and employers’ recognition that they lose the long-term savings de-

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rived from their payment for a high-cost drug when the patient changes insurers or employers, or goes in or out of the Medicaid program.17 In addition, if the prescribed health outcomes set forth in peer-reviewed clinical trials are not realized, milestone payments could be stopped before the payment for a full course of therapy. A medical team would then be consulted to make changes to the prescribed therapy, to see if any treatment alternatives should be considered to improve the health outcomes of the patient.

Potential Obstacles Although amortization preempts healthcare payers from having to provide immediate lump-sum payments, this model has several obstacles that would need to be addressed before launching it to a large patient population. First, clear clinical milestones would need to be created for each drug candidate who meets the standard of “high cost.” Second, the method for triggering payment for achieving the milestone, or not triggering a payment if the milestone is not achieved, would need to be designed. Although a milestone tracking tool could be integrated into today’s rapidly evolving electronic medical record systems, it would be difficult to create the link from the electronic medical record to a payer’s claims system.

As a result, an approach to test the amortization model is recommended. A demonstration project that surmounts this obstacle would occur within an integrated payer–provider system, such as the larger and more viable accountable care organizations emerging today, and could be used to test the model with a defined patient population that is prescribed a particular specialty drug, such as patients with hepatitis C who are receiving sofosbuvir.

High-Cost Drugs Reinsurance The second financing model involves a form of reinsurance, also known as stop-loss coverage, but in the context of healthcare it would be applied only to drug costs. In this model, the high aggregate costs of drug treatment for an individual patient are borne by a risk pool of multiple payers. The reinsurance risk pool reimburses payers for the portion of claims incurred by highcost patients, the same way reinsurance does now for very high-cost healthcare claimants in general.18 The concept is not all that different from reinsurance today, but with a lower attachment point (ie, the amount an insurer pays until supplemental insurance coverage comes into effect) for specific high-cost drugs, or an individual aggregate amount for patients with total drug costs past an attachment point, for example, $25,000, or some other breakpoint around which specialty pharmaceutical costs tend to cluster.

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In this reinsurance model, the economic challenge posed by high-cost drugs would be carved out from traditional insurance benefits. Individualized medication management techniques could be used before the patient reaches the need for catastrophic care management.19 Reinsurance serves to mitigate the risk of covering very high-cost patients and is currently used as a part of Medicare Part D; however, reinsurance is scheduled to be phased out between 2014 and 2016.18 Exploring how this model could be redesigned to manage high-cost drugs moving forward could help to spread the drug cost over more stakeholders, while ultimately improving patient care through more vigilant medication therapy management.

This high-cost drug rebates model avoids the controversy surrounding who gets assistance, and whether such patients are circumventing the drug utilization management process put in place by payers.

High-Cost Drugs Patient Rebates The third model involves rebates by a healthcare payer or a succession of payers to patients with large cost-sharing burdens for high-cost drugs after the completion of, or milestones along, a course of treatment.

Currently, drug manufacturers sponsor copayment assistance programs to provide financial assistance to patients who are not able to afford their copayment and are covered by commercial insurance. Similarly, copayment foundations exist to provide assistance to publicly insured patients who are facing economic obstacles to their needed medications.

There has been discussion about whether a drug manufacturer’s effort to assist with patient cost-sharing benefits an individual patient to the detriment of the larger patient population in the insurer’s risk pool, by subverting the drug formulary and discouraging the use of less costly generic drugs.20 For therapies that do not have less costly treatment alternatives, these programs provide much needed assistance.

This high-cost drug rebates model avoids the controversy surrounding who gets assistance, and whether such patients are circumventing the drug utilization management process put in place by payers. In this model, all patients would start with standard specialty drug tier placement and cost-sharing amounts. But as patients demonstrate that they are adhering to the therapy, and their health outcomes mirror the published clinical data, the copayment would decrease over time to reward pa-

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tients for actively participating in their medical care.

For some chronic disease states, it may be foreseeable that the copayment would drop to $0 as an adherent patient decreases downstream healthcare costs for his or her then-payer. Furthermore, if health outcomes are not being realized, the patient’s care could be reviewed to determine if a different therapy may be more appropriate, thereby introducing medical therapy management to patients before they become nonresponsive to treatment, or before their illness progresses.

Potential Obstacles Obstacles exist for operationalizing the rebate model.

As with the amortization model, electronic medical rec­ ord and payer claims systems would need to be modified to trigger the reductions in copayments, or the model would be limited to integrated payer–provider systems (ie, working accountable care organizations).

A pilot to test the feasibility of this model would require an integrated payer–provider type of system, as well as investment in systems to track agreed-on health outcomes to payments.

A Call to Action The goal of proposing these models in this context is to provide a workable and lasting solution that directly addresses what is now a perennial problem—the misalignment of incentives between payers confronted with the high upfront costs of innovative specialty drugs and the rest of the healthcare system. These models are market-derived and would and should be market-driven, and they do not require acts of Congress to take effect.

Innovative new treatments designed to address serious diseases in targeted patient populations represent the future of medicine. Traditional payment methodologies need to change to keep pace with medical innovation.

All 3 models are voluntary, and the introduction of one model need not preclude the other. All 3 models work within or replicate the current marketplace mechanisms for distributing immediate high-cost events across multiple at-risk parties and/or encouraging active participation by patients as consumers. The most feasible and expeditious way to implement these models is through existing channels in the healthcare system, and not through the creation of new entities.

These models on their own do not address the largest challenge of all, which is the need for drug manufactur-

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ers, payers, and physicians to acknowledge that there is a problem and to work together in a collaborative way to create a feasible solution that can be put into operation.

Agreement between these various stakeholder groups would be required to implement any of these models to explore changing benefit structures, as well as existing coverage and payment mechanisms. This is no small task, because it confronts traditional economic conflict and cultural hostility between these groups, and many cynics would say it is an impossible task to achieve.

These represent financial and insurance innovations pegged to the problem we are lucky to have—a surge of complex and expensive new medicines to fight diseases against which, until now, we were defenseless.

A possible instigator of this necessary change may not be either party, but the real third party that is ultimately responsible for funding the other 2 parties, the employer.

As more employers are shifting risk to employees, many are investing in tools to help employees become more effective consumers of healthcare. There may be no inherent incentive for drug manufacturers, payers, and physicians to come to agreement in today’s world, but perhaps the employers who ultimately pay for what they all do will be the impetus for the change required to give workforces access to the best possible medicine in a more economically rational way.

Innovative new treatments designed to address serious diseases in targeted patient populations represent the future of medicine. Traditional payment methodologies need to change to keep pace with medical innovation.

For specialty drugs, amortized payment, reinsurance, and copayments that decrease over time with evidence of patient compliance are 3 ways in which payments could be redesigned to support the development of innovative new drug therapies, to make them more accessible to patients, and to enable medical management by payers.

However, the management of drug payment alone is not the panacea for improving public health. It is necessary to take this discussion further to create revised linkages between the 4 items that govern patient access to new drugs: 1. The cost of drugs 2. Benefit structures 3. Coverage policies 4. Payment.

Payment reform without changes to the overall cost of

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drugs, benefit structures, and coverage may create conflicting incentives that could nullify the intended aims of payment reform to reach the maximum quality, efficiency, and innovation in care.21

Conclusion The implementation of the 3 models suggested in this article would ameliorate perennial economic conflict in the US healthcare system over the value of, and financial responsibility for, the large swath of medical innovations embodied in new specialty pharmaceuticals. These represent financial and insurance innovations pegged to the problem we are lucky to have—a surge of complex and expensive new medicines to fight diseases against which, until now, we were defenseless. ■ Author Disclosure Statement Mr Kleinke and Dr McGee reported no conflicts of interest.

References

1. Kolata G. Co-payments soar for drugs with high prices. New York Times.

April 14, 2008. www.nytimes.com/2008/04/14/us/14drug.html?_r=0. Accessed December 30, 2014.

2. Herzlinger RE, ed. Consumer-Driven Health Care: Implications for Providers, Payers, and Policymakers. San Francisco, CA: Jossey-Bass; 2004.

3. Claxton G, DiJulio B, Whitmore H, et al. Health benefits in 2010: premiums rise modestly, workers pay more toward coverage. Health Aff (Millwood). 2010; 29:1942-1950.

4. Grabowski HG, Kyle M, Mortimer R, et al. Evolving brand-name and generic drug competition may warrant a revision of the Hatch-Waxman Act. Health Aff (Millwood). 2011;30:2157-2166.

5. UnitedHealth Center for Health Reform & Modernization. The growth of specialty pharmacy: current trends and future opportunities. Issue Brief. April 2014. www.unitedhealthgroup.com/~/media/UHG/PDF/2014/UNH-The-Growth-­ ­Of-Specialty-Pharmacy.ashx. Accessed December 30, 2014.

6. CVS Caremark. Specialty trend management: where to go next. Insights.

2013. www.cvshealth.com/sites/default/files/Insights%202013.pdf. Accessed December 30, 2014.

7. Spatz I, McGee N. Health policy brief: specialty pharmaceuticals. Health Affairs. November 25, 2013. www.healthaffairs.org/healthpolicybriefs/brief. php?brief_id=103. Accessed December 30, 2014.

8. Pollack A. F.D.A. approves new cystic fibrosis drug. New York Times. January 31, 2012. www.nytimes.com/2012/02/01/business/fda-approves-cystic-fibrosis-­ drug.html?_r=0. Accessed April 23, 2015.

9. Lamore R III, Parmar S, Patel K, Hilas O. Belimumab (Benlysta): a breakthrough therapy for systemic lupus erythematosus. P T. 2012;37:212-226.

10. von Schaper E. Novartis Gilenya MS pill to cost $48,000 a year (update 1).

Bloomberg. September 30, 2010. www.bloomberg.com/apps/news?pid=news archive&sid=azDJ.PKK0pfk. Accessed December 30, 2014.

11. Miller S. The Sovaldi tax: Gilead can’t justify the price it’s asking for hepatitis C therapy. The Apothecary. June 17, 2014. www.forbes.com/sites/the­ apothecary/2014/06/17/the-sovaldi-tax-gilead-cant-justify-the-price-its-asking-­ americans-to-pay/. Accessed December 30, 2014.

12. Aronson JK. Compliance, concordance, adherence. Br J Clin Pharmacol.

2007;63:383-384.

13. Health Strategies Consultancy, LLC; for the National Coalition for Cancer Survivorship. National Coalition for Cancer Survivorship Industry Roundtable: Why Reimbursement Matters: meeting summary. May 7, 2003. www.avalere health.net/research/docs/Final_NCCS_IRT.pdf. Accessed December 30, 2014.

14. Gottlieb S, Carino T. Establishing new payment provisions for the high cost of curing disease. AEI Research. July 10, 2014. www.aei.org/publication/estab lishing-new-payment-provisions-for-the-high-cost-of-curing-disease/. Accessed December 30, 2014.

15. American Enterprise Institute. How will we pay for the cost of cures? July 11, 2014. Washington, DC. www.aei.org/wp-content/uploads/2014/07/-cost-ofcures_154738513625.pdf. Accessed April 16, 2015.

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16. Herzog TN. History of Mortgage Finance With an Emphasis on Mortgage ­Insurance. Society of Actuaries; September 2009. www.soa.org/library/monographs/­ finance/housing-wealth/2009/september/mono-2009-mfi09-toc.aspx. Accessed December 30, 2014.

17. Wilkerson J. PhRMA sticks to position that lower cost-sharing is drug pricing solution. Inside Health Policy. May 29, 2014. http://insidehealthpolicy. com/phrma-sticks-position-lower-cost-sharing-drug-pricing-solution. Accessed December 30, 2014.

18. Kelly C. Amortized payment model for high-cost cures debated by policy

experts. Pink Sheet. 2014;76:13-15.

19. Johnson JL, Lynch J, Milne JC, Tomlin B. Controlling the high cost of health care: the role of reinsurance medical risk management. Issues Answers.

July 2007;(145). www.cahi.org/cahi_contents/resources/pdf/n145HighCostof HealthCare.pdf. Accessed December 30, 2014.

20. Howard DH. Drug companies’ patient-assistance programs—helping patients or profits? N Engl J Med. 2014;371:97-99.

21. Wouters AV, McGee N. Synchronization of coverage, benefits, and payment to drive innovation. Am J Manag Care. 2014;20:e285-e293.

STAKEHOLDER PERSPECTIVE

Financing Drug Innovation: Cost versus Cure

By Joseph R. Antos, PhD Wilson H. Taylor Scholar in Health Care and Retirement Policy American Enterprise Institute, Washington, DC

DRUG MANUFACTURERS: The pharmaceutical industry has a problem. The cost of developing new drugs has soared, but insurers are increasingly unwilling to pay the price that manufacturers charge. Sofosbuvir (Sovaldi), a breakthrough treatment that cures hepatitis C but has an $84,000 price tag for a 12-week course of treatment, is the poster child for this tug of war over who should pay and how much. As we enter an era in which advanced specialty drugs become increasingly important, will patients continue to have affordable access to potentially life-saving treatments, and will pharmaceutical companies continue to have the financial incentive to continue their expensive research programs?

POLICYMAKERS: In their current article, Kleinke and McGee point to an inherent defect in the way that we finance healthcare that threatens to choke off the development of innovative new pharmaceuticals.1 Drugs that have a long-term payoff in terms of patient health are paid through insurance that takes a shortterm view of the cost–value trade-off. Drugs such as sofosbuvir are investments in good health that pay off over the course of many years, but that require large upfront expenditures.

Kleinke and McGee suggest 3 reforms that could reduce the impact of those upfront costs on payers and keep specialty pharmaceuticals within reach of patients. Longterm loans akin to home mortgages would spread the financial burden of high-cost drug therapy over a period of years rather than requiring a single large payment in the first year. Reinsurance would spread the cost over everyone in the insurance pool rather than imposing an unreasonable financial burden on the patient. Requiring patient adherence to the therapy to qualify for a rebate adds

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a performance element to the existing rebate system, which spreads the cost over the patient population of the pharmaceutical company.1 These proposals are attempting to hit a moving target.

Insurers are taking aggressive action to limit their financial exposure to high-cost drugs. Complicated multitiered drug formularies are proliferating, with specialty pharmaceuticals relegated to the fourth and fifth tiers that require sizable out-of-pocket payments by the patient.

In their current article, Kleinke and McGee point to an inherent defect in the way that we finance healthcare that threatens to choke off the development of innovative new pharmaceuticals. Drugs that have a long-term payoff in terms of patient health are paid through insurance that takes a short-term view of the cost–value trade-off.

Avalere Health found that some health insurance exchange plans place all drugs used to treat complex diseases—such as HIV, cancer, and multiple sclerosis— on the highest cost-sharing tier.2 For example, in 2015, 60% of silver plans place all antiangiogenic agents (which stop the growth of blood vessels in tumors) in the specialty tier.2 To the extent that they have drug costs temporarily under control, insurers will not be eager to make more radical changes in the financing mechanism.

The difficulty of converting to an entirely new pay-

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ment approach for high-cost drugs cannot be overstated.

To be successful, all payers and drug manufacturers would have to agree on the principles behind whichever scheme is chosen, and on the details. The former is difficult; the latter may be impossible without unprecedented cooperation between insurers and drug manufacturers, because a small change in almost any specification can be advantageous or disadvantageous.

The difficulty of converting to an entirely new payment approach for high-cost drugs cannot be overstated. To be successful, all payers and drug manufacturers would have to agree on the principles behind whichever scheme is chosen, and on the details.

Defining which drugs are deemed “high cost,” and establishing rules for how that list of drugs will change over time, will be the subject of permanent controversy.

Similarly, deciding how much financial burden should be placed on the patient, and how to enforce payment obligations that may extend well into the future, will be critical to the success of a new financing approach.

Kleinke and McGee state that each of the financing models is market driven and would not require an act of Congress to take effect.1 Regrettably, that is not likely to be the case. Medicare and Medicaid are the biggest payers in the healthcare system, and any changes in private financing will inevitably be subject to scrutiny, and ultimately approval, by the federal government.

The problem of high upfront costs is most obviously an issue for the pharmaceutical industry, but it reflects a broader problem in the healthcare sector. There has long

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been widespread agreement that we should better coordinate and manage the care of patients, which is essential if we are to fully account for the long-term benefits and offsetting financial burden of high-cost treatments, but few health insurance plans have been able to accomplish this successfully.

That may be about to change as we develop the capacity to track and analyze detailed information on patients and their care, over time, through “big data.” 3 Health insurance plans will soon be able to tailor their policies with a longer-term perspective and demonstrate that cost-savings will result. This opens up employers as another potential ally to help change the financing mechanism, because a cost-effective investment in healthcare means a healthier and more productive workforce.

PAYERS/PATIENTS: Perhaps the biggest obstacle to the adoption of any of the new drug financing models is that they redistribute the cost but do not lower the price of a high-cost drug therapy. In each model, the upfront cost is spread more widely, so that it is not borne solely by the patient and his or her insurer. That is a sound insurance principle, but without lower drug costs, payers and the public are unlikely to find it acceptable.

Indeed, even with a system that spreads the financial burden of high-cost drugs over more people and over time, we will still “break the bank,” unless more fundamental changes are made in the way we finance and deliver healthcare. ■ 1. Kleinke JD, McGee N. Breaking the bank: three financing models for addressing the drug innovation cost crisis. Am Health Drug Benefits. 2015;8:118-126.

2. Pearson CF; for Avalere Health. Exchange benefit designs increasingly place all medications for some conditions on specialty drug tier. Press release. February 11, 2015. http://avalere.com/expertise/life-sciences/insights/avalere-analysis-exchange-­ benefit-designs-increasingly-place-all-medication. Accessed April 28, 2015.

3. Bates DW, Saria S, Ohno-Machado L, et al. Big data in health care: using analytics to identify and manage high-risk and high-cost patients. Health Aff (Millwood). 2014;33:1123-1131.

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What is the value of one year on velCaDe (bortezomib)? ®

for patients with previously untreated multiple myeloma, 1 year of treatment with velCaDe in combination with MP* delivered a >1-year sustained median overall survival (os) advantage.1† At 60.1-month median follow-up: VELCADE (bortezomib)+MP provided a median OS of 56.4 months vs 43.1 months with MP alone (HR=0.695 [95% CI, 0.57-0.85]; p<0.05) At 3-year median follow-up: VELCADE+MP provided an OS advantage over MP that was not regained with subsequent therapies Of the 69% of MP patients who received subsequent therapies, 50% received VELCADE or a VELCADE-containing regimen1 Results were achieved using VELCADE twice weekly followed by a weekly dosing for a median of 50 weeks (54 weeks planned)1

the additional value of choice of administration.

Subcutaneous VELCADE demonstrated efficacy consistent with IV for the primary endpoints2‡: At 12 weeks, subcutaneous VELCADE: 43% achieved overall response rate (ORR) and 7% complete response (CR) vs IV: 42% ORR and 8% CR § II

The median age of patients in the VISTA† trial was 71 years (range: 48-91).

At 24 weeks, subcutaneous VELCADE ± dexamethasone: 53% achieved ORR and 11% CR vs IV: 51% ORR and 12% CR§ II More than 80% of previously untreated patients starting on VELCADE receive subcutaneous administration 3¶

Indication and Important Safety Information for VELCADE® (bortezomib) INDICATION VELCADE (bortezomib) is indicated for the treatment of patients with multiple myeloma.

CONTRAINDICATIONS VELCADE is contraindicated in patients with hypersensitivity (not including local reactions) to bortezomib, boron, or mannitol, including anaphylactic reactions. VELCADE is contraindicated for intrathecal administration. Fatal events have occurred with intrathecal administration of VELCADE. WARNINGS, PRECAUTIONS, AND DRUG INTERACTIONS ▼ Peripheral neuropathy: Manage with dose modification or discontinuation. Patients with preexisting severe neuropathy should be treated with VELCADE only after careful risk-benefit assessment. ▼ hypotension: Use caution when treating patients taking antihypertensives, with a history of syncope, or with dehydration. ▼ Cardiac toxicity: Worsening of and development of cardiac failure have occurred. Closely monitor patients with existing heart disease or risk factors for heart disease. ▼ Pulmonary toxicity: Acute respiratory syndromes have occurred. Monitor closely for new or worsening symptoms.

▼ Posterior reversible encephalopathy syndrome: Consider MRI imaging for onset of visual or neurological symptoms; discontinue VELCADE if suspected. ▼ Gastrointestinal toxicity: Nausea, diarrhea, constipation, and vomiting may require use of antiemetic and antidiarrheal medications or fluid replacement. ▼ thrombocytopenia or neutropenia: Monitor complete blood counts regularly throughout treatment. ▼ tumor lysis syndrome: Closely monitor patients with high tumor burden. ▼ hepatic toxicity: Monitor hepatic enzymes during treatment. ▼ embryo-fetal risk: Women should avoid becoming pregnant while being treated with VELCADE. Advise pregnant women of potential embryo-fetal harm. ▼ Closely monitor patients receiving VELCADE in combination with strong CyP3a4 inhibitors. Avoid concomitant use of strong CyP3a4 inducers.

ADVERSE REACTIONS Most commonly reported adverse reactions (incidence ≥20%) in clinical studies include nausea, diarrhea, thrombocytopenia, neutropenia, peripheral neuropathy, fatigue, neuralgia, anemia, leukopenia, constipation, vomiting, lymphopenia, rash, pyrexia, and anorexia.

Please see Brief Summary for VELCADE adjacent to this advertisement.

For Reimbursement Assistance, call 1-866-VELCADE (835-2233), Option 2, or visit VELCADE-HCP.com.

*Melphalan+prednisone. † VISTA TRIAL: a randomized, open-label, international phase 3 trial (N=682) evaluating the efficacy and safety of VELCADE administered intravenously in combination with MP vs MP in previously untreated multiple myeloma. The primary endpoint was TTP. Secondary endpoints were CR, ORR, PFS, and overall survival. At a prespecified interim analysis (median follow-up 16.3 months), VELCADE+MP resulted in significantly superior results for TTP (median 20.7 months with VELCADE+MP vs 15.0 months with MP [p=0.000002]), PFS, overall survival, and ORR. Further enrollment was halted and patients receiving MP were offered VELCADE in addition. Updated analysis was performed. ‡ SuBCuTAnEouS VS IV was a randomized (2:1), open-label, non-inferiority phase 3 trial (N=222) in patients with relapsed multiple myeloma designed to establish whether subcutaneous VELCADE (bortezomib) was non-inferior to intravenous administration.2 Non-inferiority was defined as retaining 60% of the intravenous treatment effect, measured by ORR, at the end of 4 cycles.2 The primary endpoint was ORR at 4 cycles. The secondary endpoints were response rate at 8 cycles, median TTP and PFS (months), 1-year OS, and safety. § Responses were based on criteria established by the European Group for Blood and Marrow Transplantation.2 II 82 patients (55%) in the subcutaneous VELCADE group and 39 patients (53%) in the IV group received dexamethasone. ¶ Out of 275 estimated unique patients receiving VELCADE as of May 2013.3 References: 1. Mateos MV, Richardson PG, Schlag R, et al. Bortezomib plus melphalan and prednisone compared with melphalan and prednisone in previously untreated multiple myeloma: updated follow-up and impact of subsequent therapy in the phase III VISTA trial. J Clin Oncol. 2010;28(13):2259-2266. 2. Moreau P, Pylypenko H, Grosicki S, et al. Subcutaneous versus intravenous administration of bortezomib in patients with relapsed multiple myeloma: a randomised, phase 3, non-inferiority study.

Lancet Oncol. 2011;12(5):431-440. 3. Data on file 59, Millennium Pharmaceuticals, Inc.

S:7”

Brief Summary

VELC3X0043_A_Velcade_BS_7x10_r3.indd 1

Embryo-fetal: Pregnancy Category D. Women of reproductive potential should avoid becoming pregnant while being treated with VELCADE. Bortezomib administered to rabbits during organogenesis at a dose approximately 0.5 times the clinical dose of 1.3 mg/m2 based on body surface area caused post-implantation loss and a decreased number of live fetuses.

ADVERSE EVENT DATA: Safety data from phase 2 and 3 studies of single-agent VELCADE 1.3 mg/m2/dose administered intravenously twice weekly for 2 weeks followed by a 10-day rest period in 1163 patients with previously-treated multiple myeloma (N=1008) and previously-treated mantle cell lymphoma (N=155) were integrated and tabulated. In these studies, the safety profile of VELCADE was similar in patients with multiple myeloma and mantle cell lymphoma.

In the integrated analysis, the most commonly reported (≥10%) adverse reactions were nausea (49%), diarrhea NOS (46%), fatigue (41%), peripheral neuropathies NEC (38%), thrombocytopenia (32%), vomiting NOS (28%), constipation (25%), pyrexia (21%), anorexia (20%), anemia NOS (18%), headache NOS (15%), neutropenia (15%), rash NOS (13%), paresthesia (13%), dizziness (excl vertigo 11%), and weakness (11%). Eleven percent (11%) of patients experienced at least 1 episode of ≥Grade 4 toxicity, most commonly thrombocytopenia (4%) and neutropenia (2%). A total of 26% of patients experienced a serious adverse reaction during the studies. The most commonly reported serious adverse reactions included diarrhea, vomiting, and pyrexia (3% each), nausea, dehydration, and thrombocytopenia (2% each), and pneumonia, dyspnea, peripheral neuropathies NEC, and herpes zoster (1% each).

In the phase 3 VELCADE+melphalan and prednisone study in previously untreated multiple myeloma, the safety profile of VELCADE administered intravenously in combination with melphalan/prednisone is consistent with the known safety profiles of both VELCADE and melphalan/prednisone. The most commonly reported adverse reactions in this study (VELCADE+melphalan/prednisone vs melphalan/prednisone) were thrombocytopenia (48% vs 42%), neutropenia (47% vs 42%), peripheral neuropathy (46% vs 1%), nausea (39% vs 21%), diarrhea (35% vs 6%), neuralgia (34% vs <1%), anemia (32% vs 46%), leukopenia (32% vs 28%), vomiting (26% vs 12%), fatigue (25% vs 14%), lymphopenia (23% vs 15%), constipation (23% vs 4%), anorexia (19% vs 6%), asthenia (16% vs 7%), pyrexia (16% vs 6%), paresthesia (12% vs 1%), herpes zoster (11% vs 3%), rash (11% vs 2%), abdominal pain upper (10% vs 6%), and insomnia (10% vs 6%).

In the phase 3 VELCADE subcutaneous vs intravenous study in relapsed multiple myeloma, safety data were similar between the two treatment groups. The most commonly reported adverse reactions in this study were peripheral neuropathy NEC (37% vs 50%), thrombocytopenia (30% vs 34%), neutropenia (23% vs 27%), neuralgia (23% vs 23%), anemia (19% vs 23%), diarrhea (19% vs 28%), leukopenia (18% vs 20%), nausea (16% vs 14%), pyrexia (12% vs 8%), vomiting (9% vs 11%), asthenia (7% vs 16%), and fatigue (7% vs 15%). The incidence of serious adverse reactions was similar for the subcutaneous treatment group (20%) and the intravenous treatment group (19%). The most commonly reported SARs were pneumonia and pyrexia (2% each) in the subcutaneous treatment group and pneumonia, diarrhea, and peripheral sensory neuropathy (3% each) in the intravenous treatment group.

DRUG INTERACTIONS: Bortezomib is a substrate of cytochrome P450 enzyme 3A4, 2C19 and 1A2. Co-administration of ketoconazole, a strong CYP3A4 inhibitor, increased the exposure of bortezomib by 35% in 12 patients. Monitor patients for signs of bortezomib toxicity and consider a bortezomib dose reduction if bortezomib must be given in combination with strong CYP3A4 inhibitors (eg, ketoconazole, ritonavir). Co-administration of omeprazole, a strong inhibitor of CYP2C19, had no effect on the exposure of bortezomib in 17 patients. Co-administration of rifampin, a strong CYP3A4 inducer, is expected to decrease the exposure of bortezomib by at least 45%. Because the drug interaction study (n=6) was not designed to exert the maximum effect of rifampin on bortezomib PK, decreases greater than 45% may occur. Efficacy may be reduced when VELCADE is used in combination with strong CYP3A4 inducers; therefore, concomitant use of strong CYP3A4 inducers is not recommended in patients receiving VELCADE. St. John’s wort (Hypericum perforatum) may decrease bortezomib exposure unpredictably and should be avoided. Co-administration of dexamethasone, a weak CYP3A4 inducer, had no effect on the exposure of bortezomib in 7 patients. Co-administration of melphalan-prednisone increased the exposure of bortezomib by 17% in 21 patients. However, this increase is unlikely to be clinically relevant.

USE IN SPECIFIC POPULATIONS: Nursing Mothers: It is not known whether bortezomib is excreted in human milk. Because many drugs are excreted in human milk and because of the potential for serious adverse reactions in nursing infants from VELCADE, a decision should be made whether to discontinue nursing or to discontinue the drug, taking into account the importance of the drug to the mother.

Pediatric Use: The safety and effectiveness of VELCADE in children has not been established.

Geriatric Use: No overall differences in safety or effectiveness were observed between patients ≥age 65 and younger patients receiving VELCADE; but greater sensitivity of some older individuals cannot be ruled out.

Patients with Renal Impairment: The pharmacokinetics of VELCADE are not influenced by the degree of renal impairment. Therefore, dosing adjustments of VELCADE are not necessary for patients with renal insufficiency. Since dialysis may reduce VELCADE concentrations, VELCADE should be administered after the dialysis procedure. For information concerning dosing of melphalan in patients with renal impairment, see manufacturer’s prescribing information.

Patients with Hepatic Impairment: The exposure of bortezomib is increased in patients with moderate and severe hepatic impairment. Starting dose should be reduced in those patients.

Patients with Diabetes: During clinical trials, hypoglycemia and hyperglycemia were reported in diabetic patients receiving oral hypoglycemics. Patients on oral antidiabetic agents receiving VELCADE treatment may require close monitoring of their blood glucose levels and adjustment of the dose of their antidiabetic medication.

Please see full Prescribing Information for VELCADE at VELCADEHCP.com.

VELCADE, MILLENNIUM and are registered trademarks of Millennium Pharmaceuticals, Inc. Other trademarks are property of their respective owners.

Millennium Pharmaceuticals, Inc., Cambridge, MA 02139 Copyright © 2013, Millennium Pharmaceuticals, Inc. V-12-0306a All rights reserved. Printed in USA V-14-0258

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INDICATIONS: VELCADE® (bortezomib) for Injection is indicated for the treatment of patients with multiple myeloma. VELCADE for Injection is indicated for the treatment of patients with mantle cell lymphoma who have received at least 1 prior therapy.

CONTRAINDICATIONS: VELCADE is contraindicated in patients with hypersensitivity (not including local reactions) to bortezomib, boron, or mannitol, including anaphylactic reactions. VELCADE is contraindicated for intrathecal administration. Fatal events have occurred with intrathecal administration of VELCADE. WARNINGS AND PRECAUTIONS: Peripheral Neuropathy: VELCADE treatment causes a peripheral neuropathy that is predominantly sensory; however, cases of severe sensory and motor peripheral neuropathy have been reported. Patients with pre-existing symptoms (numbness, pain, or a burning feeling in the feet or hands) and/or signs of peripheral neuropathy may experience worsening peripheral neuropathy (including ≥Grade 3) during treatment with VELCADE. Patients should be monitored for symptoms of neuropathy, such as a burning sensation, hyperesthesia, hypoesthesia, paresthesia, discomfort, neuropathic pain or weakness. In the Phase 3 relapsed multiple myeloma trial comparing VELCADE subcutaneous vs intravenous, the incidence of Grade ≥2 peripheral neuropathy events was 24% for subcutaneous and 39% for intravenous. Grade ≥3 peripheral neuropathy occurred in 6% of patients in the subcutaneous treatment group, compared with 15% in the intravenous treatment group.

Starting VELCADE subcutaneously may be considered for patients with pre-existing or at high risk of peripheral neuropathy.

Patients experiencing new or worsening peripheral neuropathy during VELCADE therapy may require a decrease in the dose and/or a less dose-intense schedule. In the VELCADE vs dexamethasone phase 3 relapsed multiple myeloma study, improvement in or resolution of peripheral neuropathy was reported in 48% of patients with ≥Grade 2 peripheral neuropathy following dose adjustment or interruption. Improvement in or resolution of peripheral neuropathy was reported in 73% of patients who discontinued due to Grade 2 neuropathy or who had ≥Grade 3 peripheral neuropathy in the phase 2 multiple myeloma studies. The long-term outcome of peripheral neuropathy has not been studied in mantle cell lymphoma.

Hypotension: The incidence of hypotension (postural, orthostatic, and hypotension NOS) was 8%. These events are observed throughout therapy. Caution should be used when treating patients with a history of syncope, patients receiving medications known to be associated with hypotension, and patients who are dehydrated. Management of orthostatic/postural hypotension may include adjustment of antihypertensive medications, hydration, and administration of mineralocorticoids and/or sympathomimetics.

Cardiac Toxicity: Acute development or exacerbation of congestive heart failure and new onset of decreased left ventricular ejection fraction have occurred during VELCADE therapy, including reports in patients with no risk factors for decreased left ventricular ejection fraction. Patients with risk factors for, or existing, heart disease should be closely monitored. In the relapsed multiple myeloma study of VELCADE vs dexamethasone, the incidence of any treatment-related cardiac disorder was 8% and 5% in the VELCADE and dexamethasone groups, respectively.

The incidence of adverse reactions suggestive of heart failure (acute pulmonary edema, pulmonary edema, cardiac failure, congestive cardiac failure, cardiogenic shock) was ≤1% for each individual reaction in the VELCADE group. In the dexamethasone group, the incidence was ≤1% for cardiac failure and congestive cardiac failure; there were no reported reactions of acute pulmonary edema, pulmonary edema, or cardiogenic shock. There have been isolated cases of QT-interval prolongation in clinical studies; causality has not been established.

Pulmonary Toxicity: Acute Respiratory Distress Syndrome (ARDS) and acute diffuse infiltrative pulmonary disease of unknown etiology, such as pneumonitis, interstitial pneumonia, and lung infiltration have occurred in patients receiving VELCADE. Some of these events have been fatal.

In a clinical trial, the first two patients given high-dose cytarabine (2 g/m2 per day) by continuous infusion with daunorubicin and VELCADE for relapsed acute myelogenous leukemia died of ARDS early in the course of therapy. There have been reports of pulmonary hypertension associated with VELCADE administration in the absence of left heart failure or significant pulmonary disease.

In the event of new or worsening cardiopulmonary symptoms, consider interrupting VELCADE until a prompt, comprehensive, diagnostic evaluation is conducted.

Posterior Reversible Encephalopathy Syndrome (PRES): Posterior Reversible Encephalopathy Syndrome (PRES; formerly termed Reversible Posterior Leukoencephalopathy Syndrome (RPLS)) has occurred in patients receiving VELCADE. PRES is a rare, reversible, neurological disorder, which can present with seizure, hypertension, headache, lethargy, confusion, blindness, and other visual and neurological disturbances. Brain imaging, preferably MRI (Magnetic Resonance Imaging), is used to confirm the diagnosis. In patients developing PRES, discontinue VELCADE. The safety of reinitiating VELCADE therapy in patients previously experiencing PRES is not known.

Gastrointestinal Toxicity: VELCADE treatment can cause nausea, diarrhea, constipation, and vomiting, sometimes requiring use of antiemetic and antidiarrheal medications. Ileus can occur.

Fluid and electrolyte replacement should be administered to prevent dehydration. Interrupt VELCADE for severe symptoms.

Thrombocytopenia/Neutropenia: VELCADE is associated with thrombocytopenia and neutropenia that follow a cyclical pattern, with nadirs occurring following the last dose of each cycle and typically recovering prior to initiation of the subsequent cycle. The cyclical pattern of platelet and neutrophil decreases and recovery remained consistent over the 8 cycles of twice-weekly dosing, and there was no evidence of cumulative thrombocytopenia or neutropenia. The mean platelet count nadir measured was approximately 40% of baseline.

The severity of thrombocytopenia was related to pretreatment platelet count. In the relapsed multiple myeloma study of VELCADE vs dexamethasone, the incidence of bleeding (≥Grade 3) was 2% on the VELCADE arm and <1% on the dexamethasone arm. Complete blood counts (CBC) should be monitored frequently during treatment with VELCADE. Platelet counts should be monitored prior to each dose of VELCADE. Patients experiencing thrombocytopenia may require change in the dose and schedule of VELCADE. Gastrointestinal and intracerebral hemorrhage has been reported in association with VELCADE. Transfusions may be considered.

Tumor Lysis Syndrome: Tumor lysis syndrome has been reported with VELCADE therapy.

Patients at risk of tumor lysis syndrome are those with high tumor burden prior to treatment.

Monitor patients closely and take appropriate precautions.

Hepatic Toxicity: Cases of acute liver failure have been reported in patients receiving multiple concomitant medications and with serious underlying medical conditions. Other reported hepatic reactions include hepatitis, increases in liver enzymes, and hyperbilirubinemia. Interrupt VELCADE therapy to assess reversibility. There is limited re-challenge information in these patients.

BUSINESS

REVIEW ARTICLE

Demonstrating Value for Biosimilars: A Conceptual Framework Sotiris Rompas, PhD; Thomas Goss, PharmD; Sally Amanuel, BSc, MA, MBA; Victoria Coutinho, BSc, PhD; Zhihong Lai, PhD; Paola Antonini, MD, PhD; Michael F. Murphy, MD, PhD BACKGROUND: The value proposition for biosimilars can be characterized as a concept that moves beyond the argument of cost reduction relative to the innovator biologic drug and into a framework that incorporates the diverse needs of key healthcare stakeholders during the transition from clinical development to commercialization in the marketplace.

OBJECTIVES: To identify factors that facilitate and inhibit the development, commercialization, and adoption of biosimilars, and to recommend modifications in program design that are likely to support the demonstration of the value of biosimilars for payers, providers, and patients.

METHODS: The primary data sources for this article include surveys conducted by Boston Healthcare Associates with payers and clinicians in the United States and the European Union 5 markets and blinded international protocol feasibility assessments completed by Worldwide Clinical Trials. Survey methodology used either convenience or purposeful sampling as appropriate, with participants extracted from diverse audiences, representative of those who generate or evaluate clinical data shaping the economic exchange and preferential status influencing physician adoption and patient access to biosimilars. Patient characteristics and psychosocial issues influencing patientsâ&#x20AC;&#x2122; perception of small-molecule generics were extracted from the available literature to inform exploratory hypotheses, given the relative absence of such information for biosimilars.

DISCUSSION: This article reviews the current evidence and summarizes results of surveys conducted with payers, providers, and drug investigation sites in the United States. Based on a review of published literature, as well as these survey results, conflicting and convergent demands exist for gathering data related to biosimilars. The motivations and data needs for these new agents are diverse, requiring adjudication of regulatory, economic, and clinical incentives beginning at program inception and extending through commercialization of the final biosimilar agent.

CONCLUSIONS: The development and commercialization of biosimilars represent an international activity that can encounter unanticipated challenges, as well as opportunities to achieve clinical and commercial success. Evolving regulatory guidance mapped in relation to payer, physician, and patient sentiments may inform the biosimilar development program designs, implementation, and positioning of the new drug.

KEY WORDS: biosimilars, biologics, reference drug, drug development, value proposition, generic drugs, payers, providers, patients, regulatory guidance, biosimilar adoption and commercialization

A

lthough a range of regulatory definitions exist, a biosimilar drug generally is defined as a biological compound that is highly similar to the refer-

Dr Rompas is Director, Boston Healthcare Associates, MA; Dr Goss is Senior Vice President, Boston Healthcare Associates, MA; Ms Amanuel is Senior Vice President, Clinical Study Start-Up and Regulatory Affairs, Worldwide Clinical Trials, King of Prussia, PA; Dr Coutinho is Director, Global Regulatory Affairs, Worldwide Clinical Trials, King of Prussia, PA; Dr Lai is Director, Scientific Affairs, Worldwide Clinical Trials, King of Prussia, PA; Dr Antonini is Senior Vice President, Scientific Affairs, Worldwide Clinical Trials, King of Prussia, PA; Dr Murphy is Chief Medical and Scientific Officer, Worldwide Clinical Trials, King of Prussia, PA.

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2015;8(3):129-139 www.AHDBonline.com Received March 11, 2015 Accepted in final form April 15, 2015

Disclosures are at end of text

ence drug, with no clinically meaningful differences in safety, purity, and potency.1 In addition, biosimilars can be characterized by a value proposition centered on reducing healthcare costs while maintaining clinical efficacy and safety outcomes similar to the originator biologic.

These objectives become particularly laudable for patient populations receiving biologic agents to treat chronic or life-threatening conditions.

In this article, the value proposition for biosimilars is characterized as one that moves beyond the cost reduction argument appropriately encountered for small-molecule generic drugs and into a framework that is more nuanced, incorporating the perspective of regulators, physicians, patients, and payers into an overall statement of value.

Using a nonprobability-based survey sampling from 17

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KEY POINTS A biosimilar drug is a biological compound that is very similar to the reference drug, with no clinically meaningful differences in safety, purity, and potency. ➤ There are significant international differences in the experience related to the development and clinical use of biosimilar drugs. ➤ In March 2015, the FDA approved the first biosimilar in the United States. ➤ As the US market for biosimilars transitions from clinical development to commercialization, multiple stakeholders who influence formulary placement, reimbursement, and the adoption of a biosimilar will shape the value proposition of biosimilars. ➤ This article presents survey data from payers, providers, and international drug investigation sites showing that conflicting and convergent demands exist for biosimilars. ➤ The authors build on and extend the current literature on biosimilars’ market entry, arguing that payers expect biosimilars to induce price competition leading to potential positive economic returns. ➤ Addressing the barriers and challenges related to payers, providers, and patients during clinical trial development will help to ensure a successful adoption and commercialization of biosimilars into the US market. ➤ Although the impetus for a biosimilar development originally might have been solely economic, the authors argue that manufacturers should devise a value proposition for biosimilar compounds that moves beyond price, demonstrating value to payers, physicians, and patients. ➤

payers (convenience sample in the United States [N = 7] and in the European Union [N = 10]), 50 practicing physicians (convenience sample within the United States ­­­[N = 15] and in the European Union [N = 35]), and 91 ­international investigative sites (purposive sample),2 as well as a review of the available published evidence, we developed a framework for assessing value for biosimilars.

These data provide milestones to guide critical development and commercialization decisions related to biosimilars.

An Evolving, Complex Environment There are significant international differences between countries in the experience associated with the development and clinical use of biosimilars.3 This is particularly

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true when contrasting the European Union with the United States, where the regulatory climate is expected to change dramatically after the US Food and Drug Administration (FDA)’s approval of the first biosimilar,4 and the finalization of “interchangeability guidance.” 5 These events have paved the way for the implementation of the Biologics Price Competition and Innovation Act of 2009.3 To date, most of the experience with biosimilars is limited to 3 therapeutic classes—granulocyte colony-stimulating factors (G-CSFs), epoetins, and human growth hormones. Biosimilars in these therapeutic classes have been marketed in Europe since 2005 through the European Med­ ­icines Agency (EMA) regulatory framework (Figure 1).

In September 2014, the first biosimilar monoclonal antibody, infliximab (Inflectra), was approved in the European Union.6 On March 6, 2015, the FDA approved the first biosimilar in the United States—the G-CSF agent filgrastim-sndz (Zarxio).4 Across the 3 major classes of biosimilars so far, historical data suggest that biosimilar penetration varies widely across biosimilar classes, with G-CSF biosimilars achieving an average market share of 42% in the European Union 5 (EU5) markets in 2011—that is twice the average market share of erythropoietin class and 4 times of the human growth hormone class.7 However, the differences in the adoption of biosimilars between countries are marked ­(Figure 2), suggesting a mosaic of different regional incentives, which are mirrored during the clinical development program leading to the regulatory approval of the drug.

As the US market for biosimilars transitions from clinical development to commercialization, multiple stakeholders who influence formulary placement, reimbursement, and, ultimately, the adoption of a biosimilar, will shape the value demonstration process, which must occur during clinical development, given the pharmaceutical industry incentives and bargaining power.

Healthcare industry analysts forecast the US biosimilars market to generate up to $25 billion by 2020.8 As in small-molecule generic markets, the growth of the biosimilars market is fueled by a series of patent expirations, such as in the case for blockbuster biologics in oncology, immunology, and inflammatory diseases, including rituximab (Rituxan), cetuximab (Erbitux), trastuzumab (Herceptin), and infliximab (Remicade), which will lose patent protection in the next 3 to 5 years. In 2015, branded biologics, specifically monoclonal antibodies, may generate $60 billion in revenue.9 Because the adoption of any novel therapeutic agent reflects the interplay of the opinions of diverse stakeholders, the value proposition of a biosimilar—moving beyond cost reduction—should be payer-, physician-, and patient-centric.10 The key adoption factors, by stakeholder, are identified in Table 1 and are discussed below.

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Figure 1 A Brief History of Biosimilar Development and Commercialization in the European Union Nivestim Ad hoc working group discussed the comparability of drugs containing biotechnologyderived proteins

EMA issues general guideline for similar biological medicinal products (CHMP/437/04) and offers a user guide to the approval process

Tevagrastim Biograstim Ratiograstim Filgrastim Ratiopharm

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2005

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hGH European commission amending provision of the European Union secondary legislation governing requirements for marketing authorization for medicinal products and establish new category of applications for “similar biological medicinal products”

Global regulatory framework The upcoming biologics loss of exclusivity wave would provide opportunities for significant economic return for biosimilars, but expect “headwinds”

Filgrastim Hexal Filgrastim Zarzio

Biosimilar EMA regulatory framework established 2001

FDA draft guidance of accelerated approval process

G-CSF 2008

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2011 2012

Biosimilar share of originator sales (March 2011)

Omnitrope Valtropin EPO Binocrit EPOα Hexal Abseamed Retacrit Silapo

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Limited uptake in EU5 markets for biosimilars in the 3 therapy classes

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351(k) of the BPCIA widely implemented based on clear definition of interchangeability

EMA updates regulatory framework to emphasize that comparability exercise must establish similarity and not clinical benefit

BPCIA indicates Biologics Price Competition and Innovation Act; CHMP, Committee for Medicinal Products for Human Use; EMA, European Medicines Agency; EPO, epoetin; EU5, European Union 5 (France, Germany, Italy, Spain, United Kingdom); FDA, US Food and Drug Administration; G-CSF, granulocyte colony-stimulating factor; hGH, human growth hormone.

Value Framework for Biosimilars: A Payer-­Centric Perspective In the US healthcare market, biosimilar drug manufacturers are likely to face significant challenges during the commercialization process. In contrast to small-molecule generic drugs, few drug manufacturers possess the complex research and development capabilities to advance a biosimilar to market; therefore, it is unlikely that the same competitive dynamics will exist as has been observed in the generic, small-molecule drug market.

Considerable barriers, such as biologics’ manufacturing capabilities (although drug developers may use contract manufacturing organizations to circumvent this problem), extend into the need for a more extensive, and, therefore, lengthier and more costly, clinical testing program, which effectively limits competition.

Nevertheless, experience to date with the commercialization efforts for biosimilars within the United States (payer and clinician survey conducted by Boston Healthcare Associates) suggests that drug manufacturers

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are challenged to devise strategies demonstrating the value of biosimilars moving beyond a narrow value proposition based on reducing direct healthcare costs through price competition.

The reasons for this apparently counterintuitive position—in which less competition may warrant a ­ more complicated demonstration of value—are manifold and include expectations regarding the level of discounting in comparison with the originator drug once the biosimilar is commercialized. For example, although US payers may recognize that research and development costs for biosimilars are multiples of the costs for small-molecule generics, and therefore should command higher acquisition costs, significant price discounts to the originator drugs may be anticipated as a spillover effect, based on the experience with generic, small-molecule compound drugs.

Commentary from a convenience sample of US commercial payers, obtained by informal interviews conducted in 2014 by Boston Healthcare Associates, suggests

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G-CSF

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EPO

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Ki Un ng it do ed m

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Biosimilar adoption by country, %

iosimilar Adoption Differs Across European Figure 2 B Union Markets

EPO indicates epoetin; G-CSF, granulocyte colony-stimulating factor.

Table 1 K ey Biosimilars Adoption Factors, by Stakeholder Stakeholder Key adoption factors Payers

• General perception on biosimilars—acceptability of clinical data package used for regulatory approval • Pricing power—ability to induce price competition, for example, through tendering processes and need for pricing negotiations at the national, regional, and local level • In the United States, regulation of therapeutic interchange and automatic substitution is controlled by state pharmacy boards and state laws, which may vary between states

Physicians

• Noninferior versus equivalent versus better clinical outcomes to the originator drug; concerns highlighted include extrapolation of clinical data into other indications or to patients with different characteristics, variability of efficacy (batch-tobatch), immunogenicity, other safety concerns • Experience in switching patients from reference drug to biosimilars • Uncertainty in biosimilar performance resulting from shifts in standards of care that were used to evaluate the utility of the reference product • Absence of tools to assess clinical value in individual patients after biosimilar commercialization

Patients

• Concern over manufacturers’ know-how and manufacturer capabilities, especially for brand-­ loyal patients • Uncertainty regarding longer-term efficacy and safety outcomes • Inability to distinguish and interpret evolving concepts, such as interchangeable biologic drugs

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that a discount of 20% to 50% from the originator drug would be necessary to give the biosimilar preferential formulary placement status. Arguing further, payers in US and EU5 markets suggest that in the absence of a significant price discount, preference will be given to the reference biologic given existing contractual/pricing arrangements—demonstrating payers’ higher price sensitivity at biosimilar launch.

Biosimilar drug manufacturers may benefit from a clinically driven value proposition by demonstrating their commitment to improving patient outcomes and engaging with key opinion leaders to address current unmet needs. These data can be generated during the clinical development process.

Payers may nevertheless still negotiate on price, demanding a significant price discount over the branded biologics. However, developing data to support concepts that address current unmet needs are likely to allow favorable comparison of the biosimilar to the branded biologic agent. These data also may incentivize the adoption of a biosimilar among skeptical physicians who are concerned with immunogenicity and variability of efficacy in the absence of data.

In some markets, such as Italy, in which price is negotiated at the national level (ie, through the Agenzia Italiana del Farmaco), a differentiating concept based on clinically driven value proposition could support financial decision makers’ acceptability of the biosimilar drug in innovative pricing schemes, including payment for clinical outcomes. According to internal interviews (conducted by Boston Healthcare Associates) with members of the Agenzia Italiana del Farmaco, differentiation is particularly important, because in most markets, competition with biosimilars will result in a winner-takes-all market through tendering (ie, a competitive bidding process resulting in a sole-source contract at a contractually agreed price for a specified time frame with regional, local payers, such as sickness funds, or hospital administrators).

Table 2 provides a summary of all the elements that likely impact a manufacturer’s ability to realize economic returns for biosimilar development.

Value Framework for Biosimilars: A PhysicianCentric Perspective Our experience in conducting clinical studies on biosimilar drugs, as well as feasibility assessments for the design of a biosimilar clinical development program, confirm that the interest of physicians in biosimilars is influenced by diverse factors, including the accessibility of the branded (reference) biologic agents; competing clinical trials for innovator drugs and other biosimilars; the level of scientific novelty engendered by the proposed clinical program; and the changing landscape of clinical care.

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Table 2 C hallenges in Realizing Economic Return for Manufacturers of Biosimilarsa Challenges Comments Complexities associated with biosimilar development and manufacturing

Biosimilar manufacturers require an extensive set of good manufacturing processes and knowledge in developing biologic drugs, and the ability to deal with the manufacturing challenges, such as batch-to-batch variability, impurities driving immunogenicity not anticipated within nonclinical data,a immunogenicity with chronic use extending beyond the duration of clinical testing, consistent comparability in shelf life, age of samples

Emerging regulatory framework for monoclonal antibody biosimilars and the uncertainty of regulatory approval in the US market

Regulatory framework in Europe is well-established, with detailed regulatory guidelines for monoclonal antibodies Demonstration of pharmacokinetic/pharmacodynamic biosimilarity (comparability), but not therapeutic benefit, is required Based on results of biosimilarity within the preclinical and clinical program, interchangeability may be addressed; clinical evidence can be extrapolated from one indication to gain regulatory approval for additional indications assessed on a caseby-case basis within the European Union, Canada, and Australia

Payers’ acceptance and demonstration of value beyond price

Payers’ willingness to pay is driven by price; brand-loyal markets, such as Italy and Spain, may exhibit reduced value “buy-in”; payers’ receptiveness varies widely across the 5 major European markets (United Kingdom, Spain, France, Italy, and Germany) Tools such as automatic substitution may be used to drive price discounts and improve bargaining power across the value chainb

Rapid evolution of standard of care in oncology and immunology: first-inclass therapies in the pipeline

Second-generation biologics and other changes in supportive care may alter the standard of care by demonstrating significant improvement in clinical outcomes, producing a change in standard of care compared with those in effect at the time of evaluation for the innovative drug This concept is particularly important when noninferiority instead of equivalency is considered sufficient for demonstration of clinical utility Pharmaceutical companies with strong franchises (eg, in oncology) will develop strategies to move patients to next-generation biologics faster, to defend against biosimilar competition through the dynamics of brand equityc

Limited differentiation

Limited ability to differentiate against biosimilar competitors, value-added services

The human growth hormone (hGH) case: “Technical challenges of biosimilar development are illustrated in the case of a hGH biosimilar where impurities were found to cause an increase in hGH antibody incidence. Preclinical biosimilarity has been shown with state of the art methods but unexpectedly an increased ratio of patients showed elevated levels of anti-hGH antibodies. Lessons learned were that process specific monitoring tools are an important part of the mitigating risks with immunogenicity for both innovative and biosimilar products and PIII studies are essential part of biosimilar development.” 24 b Automatic substitution refers to the obligation of pharmacists by law to substitute a prescribed branded drug with its generic alternative, if available, without requiring the involvement of the prescribing physician. In October 2011, brand-to-generic automatic substitution was introduced in Germany. c The added value (ie, economic price premium) ascribed to the drug as a result of its brand or marginal willingness to pay because of the brand, assuming all other features of the drug are equal. a

These key drivers were highlighted in an international, blinded feasibility assessment conducted by Worldwide Clinical Trials (WCT) in multiple clinical care and research centers for a patient study with a biosimilar version of a G-CSF targeting chemotherapy-induced neutropenia in patients with breast cancer.

Accessibility of Branded Biologic Agents Because branded biologic agents are generally associated with high cost, access and affordability vary greatly in different countries or regions of the world.11 Indeed, in prestudy assessments informing the operational footprint

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required for a proposed clinical development program, the level of interest expressed by physicians regarding participation in biosimilar trials is inversely associated with the affordability and availability of branded biologic agents.12 In addition, because of the perceived lack of benefit to patients in countries where branded biologic agents are available and accessible, the level of interest for physicians to participate in trials of biosimilars is usually much lower, as is routinely observed in the United States and in Western European countries.12 In contrast, the interest of physicians in countries with limited access to expensive biologic agents can be apprecia-

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bly higher; for example, in the biosimilar feasibility assessment discussed earlier conducted by WCT, positive response rate to the feasibility inquiry were highest in the Commonwealth of Independent States region, followed by Central Eastern Europe and Latin America, versus low response rates in the United States and in Western Europe.

Competing Trials Based on variability in access to branded biologic agents in various countries and regions, many planned and ongoing studies on biosimilars therefore rely heavily on patient and physician recruitment from countries where access to branded biologic agents is constrained (eg, typically in Central and Eastern Europe and in Latin America). As a result, based on the WCT blinded feasibility assessments in oncology and rheumatology, many physicians in countries with less access to branded therapy, paradoxically, have significantly greater experience in conducting biosimilar studies; frequently participate in ongoing studies for biosimilars; and have more familiarity with patient management conventions when switching from branded biologics. In addition, concurrent trials for novel investigational agents in the same disease indication targeted by a biosimilar are often competing for patients with similar characteristics and physicians.

Innovation Physiciansâ&#x20AC;&#x2122; willingness to participate in clinical trials for biosimilars, and their success in recruiting patients, also can be driven by factors generally subsumed under the umbrella of professional satisfaction. In addition to providing patients with access to medications that are not usually available or affordable in their institution, and the financial incentives associated with study participation, other factors influencing decisions to participate in biosimilar trials include scientific interest; the possibility of defining improvements in other aspects of patient care; the need to be referenced in peer-reviewed quality publications for career advancement; and the prestige and publicity afforded for the individual or the institution as a result of participation in a biosimilar research program.

Subsequently, given the perception of a lack of innovation for biosimilar drugs, and the limited opportunities to publish on innovative research, many physicians often decline to participate in biosimilar studies, removing an invaluable center of influence for the transition from branded biologic to a biosimilar drug during the commercialization period. This is especially relevant within academic research centers in the United States and in Western Europe, where the need for professional and institutional recognition is marked.

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For example, in the biosimilar feasibility assessment conducted by WCT, although academic and private practices (a total of 37 sites) were approached in the United States, no academic center and only 3 private practices responded favorably.

Changing Standards of Care Based on the WCT survey experience that includes a purposeful sampling frame in which potential respondents are selected according to the diversity of location and pedigree, a clinical study supporting commercialization regardless of the therapeutic class, is more acceptable to physicians if its design is closely aligned with the local standard of care. Although this concept is not unique to clinical investigations for biosimilars, it is accentuated by the lag time between the introduction of the innovator compound and the clinical development of a biosimilar, during which the standard of care may evolve.

This can be particularly notable in therapeutic areas with rapidly evolving standards of care, such as oncology and immunology and/or inflammatory disease. Consequently, physicians and other scientists may regard as unacceptable a study design mandating adherence to the original treatment paradigm used for regulatory approval for the branded drug.

As an example, significant regional differences in standard of care from site to site and from country to country have been noted in most feasibility assessments, particularly for indications within oncology for small molecules and biologics. The original regimen of docetaxel and doxorubicin used in the phase 3 registration studies for pegfilgrastim is no longer used as a neoadjuvant or adjuvant treatment for early-stage breast cancer.13 The National Comprehensive Cancer Networkâ&#x20AC;&#x201C;preferred regimen, AC followed by paclitaxel, is the most widely used chemotherapy regimen.14 Changing standards of clinical care also present a conundrum for the developers of biosimilars. If the original treatment paradigm is mandated within the study design for a new biosimilar, patient accrual rates for the proposed study may falter, because it is not aligned with the local practice, and the physicians may be reluctant to randomize otherwise acceptable patients to an investigational study or to subsequently transition from the reference drug to a biosimilar once it has been commercialized.

However, if the options within the treatment protocol acknowledge the evolving clinical care climate, there may be uncertainties regarding the anticipated effects for the branded drug, thus impacting the sample size required for the study. Finally, patients and ethics committees may question the justification of administering a treatment that may be either suboptimal or associated

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with greater side effects solely on the prospect of a reduced cost of treatment for other patients who are not included within the current protocol, and possibly not within the country where the study has been conducted.

Uncertain Clinical Utility After Approval of a Biosimilar After the approval of a biosimilar, physician uptake can be limited by factors that were embedded into the design of the study registration program. These factors are manifold and include perceived clinical differences across study designs using noninferiority, equivalency, or superiority hypotheses for comparisons between the biosimilar and the originator drug.

Concerns also may exist regarding the extrapolation of study data into clinical care because of variations from batch to batch in the biological properties of the drugs, or differences in patient characteristics or in standard of care from that permitted within studies evaluating the originator drug and the biosimilar. Unanticipated longterm safety concerns, such as immunogenicity, may be voiced regarding adverse events of clinical interest that could not be demonstrated in the trial’s duration that would otherwise be acceptable for regulatory approval.

Finally, the lack of real-world experience with switching strategies from innovator drugs to comparator (biosimilar) drugs introduces hesitancy into adoption of a biosimilar. For example, to gather real-world data on switching from an innovator drug to a comparator drug, Norway’s government is conducting the NOR-SWITCH Study to evaluate the safety and efficacy of switching from the innovator monoclonal antibody Remicade to its biosimilar Remsima in patients with rheumatoid arthritis, spondyloarthritis, psoriatic arthritis, ulcerative colitis, Crohn’s disease, and chronic plaque psoriasis.15 The availability of a therapeutic monitoring tool that would enable a physician to determine clinical utility for an individual patient—rather than extracting guidance from group data obtained within a study—could obviate the need for this type of investigation.

Value Framework for Biosimilars: A PatientCentric Perspective Despite a wealth of clinical and scientific literature, regulatory documents, and expert opinion on the development of biosimilars, only recently have patient-related perspectives for this most important topic been addressed.

Given the paucity of published literature in this area, factors dictating the perceived value of a biosimilar from a patient’s perspective are regarded as indeterminate; however, they may reflect the nature of clinical efficacy or safety measurements used during the development of a biosimilar, as well as difficulties in understanding the implications of a

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drug characterized as a biosimilar versus a drug characterized as a fully interchangeable biologic drug.1 In contrast to biosimilar drugs, a wealth of published studies has described the variables that influence patient perspectives regarding the use of generic, small-molecule drugs. These data provide an informative framework for hypothesis generation for biosimilars in a postmarketing setting.16-21 For example, in national surveys in the United States,16,17 Japan,18 Australia,19 Portugal,20 and Malaysia,21 patients agree that generic drugs are less expensive and have a better value than brand-name drugs; however, the same patients are not eager to use generic drugs personally. The main factor associated with patients’ willingness to accept a generic drug substitution was identified as correct understanding of the characteristics of the generic drug relative to the brand drug after a detailed discussion of the drug’s attributes with the prescribing physician.16-21 One of the few data points on this issue is provided through a recent survey of 3214 patients with type 1 or type 2 diabetes.22 The survey posed an open-ended follow-up question that addressed patients within the sample who said they would “definitely not use” biosimilars or were “unlikely” to use biosimilars (4% and 13%, respectively, of the sample) to provide a reason for their reluctance.22 The respondents mentioned the proved track record of brand-name insulin and the lack of such a record with biosimilars, their current personal satisfaction with a particular insulin, their past bad experiences with other types of generic medications, a lack of trust in generic medications in general and in biosimilars in particular, and allergic reactions to various forms of insulin.

One respondent’s answer was particularly enlightening, stating, “It is not Humalog. I know how my body acts with Humalog. I do not trust things I do not know when it comes to my health.” 22 These concepts that are well-documented for small-molecule generic drugs prompt systematic inquiry for all biosimilars that are undergoing development. This sentiment suggests that because of side-effect concerns regarding biosimilars and the maintenance of adequate response, patient education will be crucial to secure a biosimilar acceptance developed in the context of its clinical trials or after its commercialization. Programs to ensure patient education on the use of biosimilars can serve as supportive activity for the clinical trial registration program of a drug.

Perceived Asymmetries in Outcomes Patient-perceived differences in efficacy or safety may exist during the development of, or the commercialization process for, biosimilar drugs that are comparable with experiences with generic, small-molecule drugs. For

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example, an investigational program for the biosimilar filgrastim may be adequately characterized from a regulatory perspective based on a limited clinical program, including pharmacokinetic and pharmacodynamic studies in healthy volunteers, with one comparative study involving patients with similar pharmacokinetic and pharmacodynamic outcomes, followed by postmarketing surveillance through the use of a patient registry.23 This is a methodologically appropriate program. A patient’s decision to participate in the development of a biosimilar would be framed in the context of short-term supportive care, given the end point of neutropenia, and the easily measurable cases of severe neutropenia that may occur after a well-established chemotherapy regimen.23 By contrast, in studies of biosimilar monoclonal antibodies in oncology, the use of a proxy for overall survival (ie, clinical end points) rather than overall survival itself may be perceived as problematic by a patient, even if fully acceptable from a regulatory perspective.24,25 These end points speak to fundamental drug attributes that influence disease progression and morbidity, and can therefore weigh heavily on a patient’s decision to accept exposure to a biosimilar rather than a branded biologic, either as part of the development program or after the drug’s commercialization.

In addition, the potential for long-term safety outcomes that cannot be measured in short-term studies become more clinically consequential and differentially impact the informed consent process, either for trial participation or for a switch in therapy. In conclusion, although an acceptable risk for novel, interventional therapy exists, the potential lack of clinical equivalency between the reference biologic and the biosimilar jeopardizes patient interest in a trial of an alternative drug if a reference medication is commercially available and accessible to that patient.

Biosimilar, or Interchangeable Biologic Drug?

Given the potential for differences in efficacy or safety, characterization as either a “biosimilar” or an “interchangeable biologic drug” may obscure more than inform the biosimilar adoption process. This is understandable, given that even regulatory agencies use various terms to define the characteristics of a biosimilar. For example, under 351(k) of the Public Health Service Act, an “interchangeable” biologic drug has a more comprehensive definition than a drug that has been shown to be biosimilar to the reference drug: it can be expected to produce the same clinical result as the reference drug across a spectrum of various clinical applications.1 Because the difference between a biosimilar and an interchangeable biologic drug may be difficult to appreciate even for healthcare professionals, patients attempt-

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ing to render an informed consent before randomization in a clinical trial, or to engage in a new treatment option suggested by a provider, are at a disadvantage.26

A Unifying Concept Diverse stakeholders create a mosaic of conflicting and compatible demands for clinical trial data to inform the approval, commercialization, and adoption of biosimilars. A fully integrated development program maximizing the value proposition of a biosimilar must acknowledge all perspectives, and can be illustrated by development of a biosimilar for an extensively used monoclonal antibody, rituximab (Rituxan; MabThera).

Rituximab (a chimeric anti-CD20 monoclonal antibody) is indicated for several conditions, including non-Hodgkin lymphoma, chronic lymphocytic leukemia, rheumatoid arthritis, and severe granulomatosis with polyangiitis. Rituximab’s largest revenue source is attributed to non-Hodgkin lymphoma, yet biosimilar comparability for approval purposes will pursue the most efficient pathway to drug approval. As with small molecules, this may be demonstrated in the most sensitive and easily accessible patient population (such as in patients with rheumatoid arthritis) rather than in patients representing all approved indications.

Characterized by the early engagement of key opinion leaders and network organizations, patient recruitment for the study would utilize emerging markets for faster clinical trial completion resulting from differences in access to biologics, and include a planned post­ approval publication strategy for participating centers highlighting the attributes of the new biosimilar during clinical use, as well as a patient education program to facilitate adoption.

In addition, to optimize the international regulatory strategy during the development of a biosimilar, a stepwise approach cited by predominant regulatory authorities, such as the FDA and the EMA, would be used, in which preclinical comparability was confirmed by standard parameters provided by regulatory guidance (eg, state-of-the-art structural and analytic characterization, functional characterization, pharmacology and toxicology studies), followed by a clinical pharmacokinetic and pharmacodynamic study in healthy volunteers (where permitted) to demonstrate expected correlations. The biosimilar development program would be concluded through the incorporation of a clinical study with patients using either an equivalency or noninferiority hypothesis (as appropriate) with a postapproval FDA Risk Evaluation and Mitigation Strategies program and/or an EMA’s Risk Management Plan strategy.

The efficiency of this stratagem would therefore be dictated before the clinical program begins through a

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regulatory quality comparability gap analysis. These analyses determine optimal countries and satisfaction of regulatory criteria, with staggered clinical trial initiation across countries to permit supplemental pharmacokinetic information on additional regulatory queries. Therefore, variables such as regulatory acceptance, a competitive environment, access to a relevant patient population, and operational knowledge of clinical centers would all be factored into consideration.

Conclusion Although the impetus for a biosimilar development originally might have been economic, the value proposition for biosimilars can be enhanced by moving beyond cost reduction arguments that are often encountered for small-molecule generic drugs and into a framework that incorporates the regulatory, professional, and psychosocial concerns of diverse stakeholders. This process begins by acknowledging the marketing dynamics, evolving regulatory guidance, and the realities of the current environment for the clinical evaluation and commercialization of biosimilars in comparison with reference biologic agents.

Program strategies are diverse, including attempts to accommodate evolving standards of care into protocol design for drug registration trials; companion efforts addressing professional satisfaction during study participation; and the creation of abbreviated therapeutic monitoring strategies to facilitate the adoption of the biosimilar after its approval. For chronic illnesses characterized by a potential for significant morbidity as a consequence of the illness or as a reflection of treatment failure, the development of patient-specific outcome measures and a companion educational platform for the introduction of the drug are particularly important. ■ Author Disclosure Statement The authors have no conflicts of interest to report.

References

1. US Food and Drug Administration. Drugs: information for healthcare professionals (biosimilars). Updated March 6, 2015. www.fda.gov/drugs/development approvalprocess/howdrugsaredevelopedandapproved/approvalapplications/ therapeuticbiologicapplications/biosimilars/ucm241719.htm. Accessed March 1, 2015.

2. Groves RM, Fowler FJ Jr, Couper MP, et al. Survey Methodology. 2nd ed.

Hoboken, NJ: John Wiley & Sons; 2009.

3. Wang J, Chow S-C. On the regulatory approval pathway of biosimilar products. Pharmaceuticals (Basel). 2012;5:353-368.

4. US Food and Drug Administration. FDA approves first biosimilar product Zarxio. Press release. March 6, 2015. www.fda.gov/NewsEvents/Newsroom/ PressAnnouncements/ucm436648.htm. Accessed March 7, 2015.

5. US Food and Drug Administration. Scientific considerations in demonstrating biosimilarity to a reference product. April 2015. www.fda.gov/downloads/ drugs/guidancecomplianceregulatoryinformation/guidances/ucm291128.pdf.

Accessed May 1, 2015.

6. European Medicines Agency. Remicade: infliximab. European public assessment report summary. Updated September 25, 2014. www.ema.europa.eu/ema/ index.jsp?curl=pages/medicines/human/medicines/000240/human_med_­ 001023.jsp&mid=WC0b01ac058001d124. Accessed March 4, 2015.

7. Generics and Biosimilars Initiative. Biosimilars use in Europe. November 25, 2011. http://gabionline.net/Reports/Biosimilars-use-in-Europe. Accessed March 1, 2015.

8. IMS Health. Shaping the biosimilars opportunity: a global perspective on the evolving biosimilars landscape. White paper. December 2011. www.imshealth. com/ims/Global/Content/Home%20Page%20Content/IMS%20News/Biosimilars_ Whitepaper.pdf. Accessed March 1, 2015.

9. Biosimilars: pipeline trends. Datamonitor. December 9, 2011. www.datamonitor.­ com/store/Product/biosimilars_pipeline_trends?productid=HC00149-002. Accessed March 1, 2015.

10. Porter ME. What is value in health care? N Engl J Med. 2010;363:2477-2481.

11. Putrik P, Ramiro S, Kvien TK, et al; for the Working Group ‘Equity in access to treatment of rheumatoid arthritis in Europe.’ Inequities in access to biologic and synthetic DMARDs across 46 European countries. Ann Rheum Dis. 2014;73:198-206.

12. Zelenetz AD, Ahmed I, Braud EL, et al. NCCN Biosimilars White Paper: regulatory, scientific, and patient safety perspectives. J Natl Compr Canc Netw.

2011;9(suppl 4):S-1–S-22.

13. Green MD, Koelbl H, Baselga J, et al; for the International Pegfilgrastim 749 Study Group. A randomized double-blind multicenter phase III study of fixeddose single-administration pegfilgrastim versus daily filgrastim in patients receiving myelosuppresive chemotherapy. Ann Oncol. 2003;14:29-35.

14. National Comprehensive Cancer Network. NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines): breast cancer. Version 2.2015.

March 11, 2015. www.nccn.org/professionals/physician_gls/pdf/breast.pdf. Accessed May 1, 2015.

15. ClinicalTrials.gov. The NOR-SWITCH Study. https://clinicaltrials.gov/ct2/­ show/NCT02148640. Accessed March 1, 2015.

16. Shrank WH, Cox ER, Fischer MA, et al. Patients’ perceptions of generic medications. Health Aff (Millwood). 2009;28:546-556.

17. Keenum AJ, Devoe JE, Chisolm DJ, Wallace LS. Generic medications for you, but brand-name medications for me. Res Social Adm Pharm. 2012;8:574-578.

18. Kobayashi E, Karigome H, Sakurada T, et al. Patients’ attitudes towards generic drug substitution in Japan. Health Policy. 2011;99:60-65.

19. Chong CP, March G, Clark A, et al. A nationwide study on generic medicines substitution practices of Australian community pharmacists and patient acceptance. Health Policy. 2011;99:139-148.

20. Quintal C, Mendes P. Underuse of generic medicines in Portugal: an empirical study on the perceptions and attitudes of patients and pharmacists. Health Policy. 2012;104:61-68.

21. Ali SM, Manan MM, Hassali MA, et al. Use of generic medicines: perspectives of consumers living in urban and suburban areas of Klang Valley in Malaysia. J Med Mark. 2013;13:242-250.

22. Wilkins AR, Venkat MV, Brown AS, et al. Patient perspectives on biosimilar insulin. J Diabetes Sci Technol. 2014;8:23-25.

23. Oncologic Drugs Advisory Committee. US Food and Drug Administration.

BLA 125553: EP2006, a proposed biosimilar to Neupogen (filgrastim). FDA brief­ ­ing document. January 7, 2015. www.fda.gov/downloads/AdvisoryCommittees/­ CommitteesMeetingMaterials/Drugs/OncologicDrugsAdvisoryCommittee/ UCM428780.pdf. Accessed March 1, 2015.

24. Reichert JM. Next generation and biosimilar monoclonal antibodies: essential considerations towards regulatory acceptance in Europe. February 3-4, 2011, Freiburg, Germany. MAbs. 2011;3:223-240.

25. Committee for Medicinal Products for Human Use. European Medicines Agency. Guideline on similar biological medicinal products containing monoclonal antibodies—non-clinical and clinical issues. May 30, 2012. www.ema. europa.eu/docs/en_GB/document_library/Scientific_guideline/2012/06/ WC500128686.pdf. Accessed March 1, 2015.

26. Smith-Tyler J. Informed consent, confidentiality, and subject rights in clinical trials. Proc Am Thorac Soc. 2007;4:189-193; discussion 193.

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Challenges Surrounding the New Biosimilars Landscape

By Michael Kleinrock Research Director, The IMS Institute for Healthcare Informatics, IMS Health, Plymouth Meeting, PA

The framework for understanding the evolution of a biosimilar marketplace outlined in the article by Dr Rompas and colleagues1 includes many of the most important biosimilar influencers but fails to reflect on the very competitive and economically constrained environment for biosimilar manufacturers. The key reasons for this are the lack of clarity and predictability regarding regulatory requirements, and uncertainty about the competitive biosimilar landscape. The authors highlight the long-term features of the stakeholder landscape that must be resolved to develop a robust biosimilar market, but fail to chart an evolutionary path to a new state, which is the fundamental challenge ahead.

The authors’ avoidance of a purely cost-centered value concept is important, because manufacturers cannot be expected to drive substantial cost-savings in the near-term. Ultimately, predictability around costs, risks, and regulatory requirements will encourage greater participation in biosimilar development and will support the increasing price competition. This, however, leaves out the continuing innovation by originator drug makers, which continues to address unmet clinical needs, and, as a consequence, supersedes earlier-generation biologics that are now, or will soon be open to biosimilar competition.

The broadly held belief that biosimilars will evolve to form a “generic biologic” market may be true in the longterm, but divergent stakeholder needs and perspectives indicate that generic biologic will not mean “vastly cheaper,” and will not entirely replace biologic drug originators within 6 to 8 weeks after patent expiration, as seen with traditional generics. Without recognition that the healthcare system will be paying high prices for biologics for the foreseeable future, why is this biosimilar concept the best approach? A greater focus on the personalization of care (ie, getting the right drug to the right patient at the right time) may address spending pressures more appropriately than a long-delayed effort to drive the adoption of biosimilars. It is possible that we should do both, but we should at least be clear about the savings that are possible.

ORIGINATOR BIOLOGIC DRUG MAKERS: The investment to develop an originator biologic drug is as substantial as in small-molecule innovations, and the

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long-term return on investment is dependent on the length of the patent protection. The end of a drug’s commercial life is not linked only to its patent life, because newer-generation medicines often supersede older drugs before patent expiration. All this has been part of the pattern of commercializing biologics for 20 years before the emergence of biosimilars.

For the vast majority of biologics, a biosimilar pathway offers a unique commercial threat. The likelihood of investing in a biosimilar for a 3rd to 7th biologic in a class is extremely low; therefore, the challenge for biologic originators can be split into those that will be reference brands for a biosimilar and the ones that will be part of a next tier of therapeutic options that may not be directly affected by biosimilars. If costs are not substantially lower for biosimilars, the economic factors that drive therapeutic choices may not materialize. Thus, many originator biologic makers may be most concerned with traditional market issues. The key will be the type of reimbursement offered for new biosimilars, and whether there are changes to reimbursement for originator drugs (whether they are reference drugs or not).

BIOSIMILAR MANUFACTURERS: The uncertainties about market share capture for a biosimilar manufacturer are a key driver of early trends in marketing investments and price setting.

In Europe, biosimilars have most often captured volumes of the molecule equivalent to small-molecule specialty injectable drugs in the same markets. That achievement is mostly because of the reimbursement and tendering processes that are in place for hospital-administered drugs, which include most of the biosimilars to date. As biosimilars begin to be marketed in the United States, it is important to note that although filgrastim biosimilars achieved a 60% to 70% volume share in Germany and in some other European markets, the US share for the biologic tbo-filgrastim (Granix) has achieved a 10% share after 1 year. This disconnect raises a note of caution and will likely result in a strategic choice to either escalate the commercial efforts to drive greater biosimilar uptake or to a more cautious level of restraint in the choice of molecules and commercial targets. Already fewer drug manufacturers are targeting biosimilars than when the US Biologics Price Competition and Innova-

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STAKEHOLDER PERSPECTIVE Continued tion Act of 2009 was passed, and ultimately price competition can only be effective with more players.

REGULATORS: The goals of safe, effective, and sufficiently numerous biosimilars to drive economic savings in the healthcare system as a whole is at least partly at the root of the US biosimilars pathway legislation.

That it took 5 years for the first biosimilar approval to make its way through the pathway is a serious issue, and the reasons why a company may choose to file an application under a 505(b)(2) or a biologic pathway seriously hamper the rapid evolution of the biosimilar pathway.

The next catalyst event will likely be if the biosimilar version of filgrastim, which was approved in 2015, does vastly better in terms of volume uptake than the biologic license application–approved version of the originator drug launched in 2013. Whether greater incentives are needed to use one pathway or another remains to be seen.

PATIENTS: Depending on the therapy, patients’ perspectives on biosimilars may differ vastly. With some therapies, such as insulin, patients’ share of the cost, and their perception of the drug’s similarity, may make the choice a “no brainer.” In other cases, where the physician or the health system sets the protocols, the patient may not have a specific choice, and in still others, the patient may be reluctant to use a biosimilar.

Reluctance may come from concerns about similarity, or the price of the biosimilar may not be substantially lower. As with many cost issues in the US healthcare system, the patient’s perspective can be seen as an afterthought.

PAYERS: Although the US healthcare system retains medical and pharmacy benefit silos, payers’ ability to influence biosimilar utilization will remain bifurcated.

The evolving incentive structures regarding accountable care organizations and bundled payments may encourage greater biosimilar use in institutional- or provider-administered treatments, but these structures are still only applicable to 33% of the US population. The earliest opportunities to influence controls over biologics have been related to administered treatments where payers have historically had the least direct influence. As their influence grows in these areas, and as new biosimilars begin to target self-administered treatments, the influ-

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ence of payers on the adoption and pricing of biosimilars will most likely grow.

PROVIDERS: The earliest biosimilars, as seen in Europe, have demonstrated a decade of cost-savings, as well as remarkable safety. Many discussions about biosimilars have focused, at least in part, on similarity, which is, at minimum, an oblique reference to the show-stopping issue that many people fear. Providers have a strong interest in whether their patients can afford the treatments they prescribe. So, in some sense, they will look to a potential cost-savings with hope. As noted earlier, the lack of substantial cost-savings, the

Reluctance may come from concerns about similarity, or the price of the biosimilar may not be substantially lower. As with many cost issues in the US healthcare system, the patient’s perspective can be seen as an afterthought. clinical step backwards relative to newer options, and the looming aggressive control by payers lead many providers outside integrated health systems to look at biosimilars with caution and skepticism.

At least for the next 5 years, each drug should be examined on a case-by-case basis, and for a prescriber considering multiple treatments, that adds complexity, without necessarily delivering better outcomes or lower costs. These issues are certainly not a recipe to make providers clamor to join a consensus new order to push for the wider adoption of biosimilars. If the cost-savings are clearer, and if there is not a payer or a network protocol overreach that hampers the ability of physicians to choose better drugs for specific patients, there will most likely be broad acceptance of biosimilars by most providers. The keystone still remains reimbursement, and until all stakeholders figure out a new “grand bargain,” the United States will not capture the opportunities that European payers have already begun to reap. ■ 1. Rompas S, Goss T, Amanuel S, et al. Demonstrating value for biosimilars: a conceptual framework. Am Health Drug Benefits. 2015;8:129-139.

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At the end of the day, relying on cost for your formulary decisions is not enough.

Indications and Usage • Victoza® (liraglutide [rDNA origin] injection) is indicated as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus.

Important Limitations of Use • Victoza® is not recommended as first-line therapy for patients who have inadequate glycemic control on diet and exercise because of the uncertain relevance of the rodent C-cell tumor findings to humans.

Prescribe Victoza® only to patients for whom the potential benefits are considered to outweigh the potential risk.

• Based on spontaneous postmarketing reports, acute pancreatitis, including fatal and non-fatal hemorrhagic or necrotizing pancreatitis, has been observed in patients treated with Victoza®. Victoza® has not been studied in patients with a history of pancreatitis. It is unknown whether patients with a history of pancreatitis are at increased risk for pancreatitis while using Victoza®. Other antidiabetic therapies should be considered in patients with a history of pancreatitis.

• Victoza® is not a substitute for insulin. Victoza® should not be used in patients with type 1 diabetes mellitus or for the treatment of diabetic ketoacidosis, as it would not be effective in these settings.

• The concurrent use of Victoza® and prandial insulin has not been studied.

Victoza® is a registered trademark of Novo Nordisk A/S. © 2015 Novo Nordisk

Important Safety Information WARNING: RISK OF THYROID C-CELL TUMORS • Liraglutide causes dose-dependent and treatment-durationdependent thyroid C-cell tumors at clinically relevant exposures in both genders of rats and mice. It is unknown whether Victoza® causes thyroid C-cell tumors, including medullary thyroid carcinoma (MTC), in humans, as the human relevance of liraglutideinduced rodent thyroid C-cell tumors has not been determined.

• Victoza® is contraindicated in patients with a personal or family history of MTC and in patients with Multiple Endocrine Neoplasia syndrome type 2 (MEN 2). Counsel patients regarding the potential risk for MTC with the use of Victoza® and inform them of symptoms of thyroid tumors (eg, a mass in the neck, dysphagia, dyspnea, persistent hoarseness). Routine monitoring of serum calcitonin or using thyroid ultrasound is of uncertain value for early detection of MTC in patients treated with Victoza®.

Contraindications • Victoza® is contraindicated in patients with a prior serious hypersensitivity reaction to Victoza® or to any of the product components.

All rights reserved.

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Warnings and Precautions • Pancreatitis: Based on spontaneous postmarketing reports, acute pancreatitis, including fatal and non-fatal hemorrhagic or necrotizing pancreatitis, has been observed in patients treated with Victoza®. After initiation of Victoza®, observe patients carefully for signs and symptoms of pancreatitis (including persistent severe abdominal pain, sometimes radiating to the back and which may or may not be accompanied by vomiting). If pancreatitis is suspected, Victoza® should promptly be discontinued and appropriate management should be initiated.

If pancreatitis is confirmed, Victoza® should not be restarted.

Consider antidiabetic therapies other than Victoza® in patients with a history of pancreatitis.

• Never Share a Victoza® Pen Between Patients, even if the needle is changed. Pen-sharing poses a risk for transmission of bloodborne pathogens.

• Use with Medications Known to Cause Hypoglycemia: When Victoza® is used with an insulin secretagogue (e.g. a sulfonylurea) or insulin, serious hypoglycemia can occur. Consider lowering the dose of the insulin secretagogue or insulin to reduce the risk of hypoglycemia.

• Renal Impairment: Renal impairment has been reported postmarketing, usually in association with nausea, vomiting, diarrhea, or dehydration, which may sometimes require hemodialysis. Use caution when initiating

1214-00024713-1

Intended for members of formulary committees pursuant to section 114 of the FDA Modernization Act (section 502(a) of the Food, Drug, and Cosmetic Act).

or escalating doses of Victoza® in patients with renal impairment.

• Hypersensitivity Reactions: Serious hypersensitivity reactions (e.g. anaphylaxis and angioedema) have been reported postmarketing. If symptoms of hypersensitivity reactions occur, patients must stop taking Victoza® and seek medical advice promptly.

• Macrovascular Outcomes: There have been no studies establishing conclusive evidence of macrovascular risk reduction with Victoza® or any other antidiabetic drug.

Adverse Reactions • The most common adverse reactions, reported in ≥5% of patients treated with Victoza® and more commonly than in patients treated with placebo, are headache, nausea, diarrhea, dyspepsia, constipation, and anti-liraglutide antibody formation. Immunogenicity-related events, including urticaria, were more common among Victoza®-treated patients (0.8%) than among comparator-treated patients (0.4%) in clinical trials.

Use in Specific Populations • Victoza® has not been studied in patients with type 2 diabetes below 18 years of age and is not recommended for use in pediatric patients.

• There is limited data in patients with renal or hepatic impairment.

Please see brief summary of Prescribing Information on next pages.

April 2015

Victoza® (liraglutide [rDNA origin] injection) Rx Only BRIEF SUMMARY: Please consult package insert for full prescribing information.

WARNING: RISK OF THYROID C-CELL TUMORS: Liraglutide causes dose-dependent and treatment-duration-dependent thyroid C-cell tumors at clinically relevant exposures in both genders of rats and mice. It is unknown whether Victoza® causes thyroid C-cell tumors, including medullary thyroid carcinoma (MTC), in humans, as the human relevance of liraglutide-induced rodent thyroid C-cell tumors has not been determined [see Warnings and Precautions]. Victoza® is contraindicated in patients with a personal or family history of MTC and in patients with Multiple Endocrine Neoplasia syndrome type 2 (MEN 2). Counsel patients regarding the potential risk for MTC with the use of Victoza® and inform them of symptoms of thyroid tumors (e.g. a mass in the neck, dysphagia, dyspnea, persistent hoarseness). Routine monitoring of serum calcitonin or using thyroid ultrasound is of uncertain value for early detection of MTC in patients treated with Victoza® [see Contraindications and Warnings and Precautions].

INDICATIONS AND USAGE: Victoza® is indicated as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus. Important Limitations of Use: Victoza® is not recommended as first-line therapy for patients who have inadequate glycemic control on diet and exercise because of the uncertain relevance of the rodent C-cell tumor findings to humans. Prescribe Victoza® only to patients for whom the potential benefits are considered to outweigh the potential risk [see Warnings and Precautions]. Based on spontaneous postmarketing reports, acute pancreatitis, including fatal and non-fatal hemorrhagic or necrotizing pancreatitis has been observed in patients treated with Victoza®. Victoza® has not been studied in patients with a history of pancreatitis. It is unknown whether patients with a history of pancreatitis are at increased risk for pancreatitis while using Victoza®. Other antidiabetic therapies should be considered in patients with a history of pancreatitis. Victoza® is not a substitute for insulin. Victoza® should not be used in patients with type 1 diabetes mellitus or for the treatment of diabetic ketoacidosis, as it would not be effective in these settings. The concurrent use of Victoza® and prandial insulin has not been studied.

CONTRAINDICATIONS: Victoza® is contraindicated in patients with a personal or family history of medullary thyroid carcinoma (MTC) or in patients with Multiple Endocrine Neoplasia syndrome type 2 (MEN 2).

Victoza® is contraindicated in patients with a prior serious hypersensitivity reaction to Victoza® or to any of the product components.

WARNINGS AND PRECAUTIONS: Risk of Thyroid C-cell Tumors: Liraglutide causes dose-dependent and treatment-duration-dependent thyroid C-cell tumors (adenomas and/or carcinomas) at clinically relevant exposures in both genders of rats and mice. Malignant thyroid C-cell carcinomas were detected in rats and mice. It is unknown whether Victoza® will cause thyroid C-cell tumors, including medullary thyroid carcinoma (MTC), in humans, as the human relevance of liraglutide-induced rodent thyroid C-cell tumors has not been determined. Cases of MTC in patients treated with Victoza® have been reported in the postmarketing period; the data in these reports are insufficient to establish or exclude a causal relationship between MTC and Victoza® use in humans. Victoza® is contraindicated in patients with a personal or family history of MTC or in patients with MEN 2. Counsel patients regarding the potential risk for MTC with the use of Victoza® and inform them of symptoms of thyroid tumors (e.g. a mass in the neck, dysphagia, dyspnea, persistent hoarseness). Routine monitoring of serum calcitonin or using thyroid ultrasound is of uncertain value for early detection of MTC in patients treated with Victoza®. Such monitoring may increase the risk of unnecessary procedures, due to low test specificity for serum calcitonin and a high background incidence of thyroid disease. Significantly elevated serum calcitonin may indicate MTC and patients with MTC usually have calcitonin values >50 ng/L. If serum calcitonin is measured and found to be elevated, the patient should be further evaluated. Patients with thyroid nodules noted on physical examination or neck imaging should also be further evaluated. Pancreatitis: Based on spontaneous postmarketing reports, acute pancreatitis, including fatal and non-fatal hemorrhagic or necrotizing pancreatitis, has been observed in patients treated with Victoza®. After initiation of Victoza®, observe patients carefully for signs and symptoms of pancreatitis (including persistent severe abdominal pain, sometimes radiating to the back and which may or may not be accompanied by vomiting). If pancreatitis is suspected, Victoza® should promptly be discontinued and appropriate management should be initiated. If pancreatitis is confirmed, Victoza® should not be restarted. Consider antidiabetic therapies other than Victoza® in patients with a history of pancreatitis. In clinical trials of Victoza®, there have been 13 cases of pancreatitis among Victoza®-treated patients and 1 case in a comparator (glimepiride) treated patient (2.7 vs. 0.5 cases per 1000 patient-years). Nine of the 13 cases with Victoza® were reported as acute pancreatitis and four were reported as chronic pancreatitis. In one case in a Victoza®-treated patient, pancreatitis, with necrosis, was observed and led to death; however clinical causality could not be established. Some patients had other risk factors for pancreatitis, such as a history of cholelithiasis or alcohol abuse. Never Share a Victoza® Pen Between Patients: Victoza® pens must never be shared between patients, even if the needle is changed. Pen-sharing poses a risk for transmission of blood-borne pathogens. Use with Medications Known to Cause Hypoglycemia: Patients receiving Victoza® in combination with an insulin secretagogue (e.g., sulfonylurea) or insulin may have an increased risk of hypoglycemia. The risk of hypoglycemia may be lowered by a reduction in the dose of sulfonylurea (or other concomitantly administered insulin secretagogues) or insulin [see Adverse Reactions]. Renal Impairment: Victoza® has not been found to be directly nephrotoxic in animal studies or clinical trials. There have been postmarketing reports of acute renal failure and worsening of chronic renal failure, which may sometimes require hemodialysis in Victoza®-treated patients [see Adverse Reactions]. Some of these events were reported in patients without known underlying renal disease. A majority of the reported events occurred in patients who had experienced nausea, vomiting, diarrhea, or dehydration [see Adverse Reactions]. Some of the reported events occurred in patients receiving one or more medications known to affect renal function or hydration status. Altered renal function has been reversed in many of the reported cases with supportive treatment and discontinuation of potentially causative agents, including Victoza®. Use caution when initiating or escalating doses of Victoza® in patients with renal impairment. Hypersensitivity Reactions: There have been postmarketing reports of serious hypersensitivity reactions (e.g., anaphylactic reactions and angioedema) in patients treated with Victoza®. If a hypersensitivity reaction occurs, the patient should discontinue Victoza® and other suspect medications and promptly seek medical advice. Angioedema has also been reported with other GLP-1 receptor agonists. Use caution in a patient with a history of angioedema with another GLP-1 receptor agonist because it is unknown whether such patients will be predisposed to angioedema with Victoza®. Macrovascular Outcomes: There have been no clinical studies establishing conclusive evidence of macrovascular risk reduction with Victoza® or any other antidiabetic drug.

ADVERSE REACTIONS: The following serious adverse reactions are described below or elsewhere in

the prescribing information: Risk of Thyroid C-cell Tumors [see Warnings and Precautions]; Pancreatitis [see Warnings and Precautions]; Use with Medications Known to Cause Hypoglycemia [see Warnings and Precautions]; Renal Impairment [see Warnings and Precautions]; Hypersensitivity Reactions [see Warnings and Precautions]. Clinical Trials Experience: Because clinical trials are conducted under widely varying conditions, adverse reaction rates observed in the clinical trials of a drug cannot be directly compared to rates in the clinical trials of another drug and may not reflect the rates observed in practice. The safety of Victoza® has been evaluated in 8 clinical trials: A double-blind 52-week monotherapy trial compared Victoza® 1.2 mg daily, Victoza® 1.8 mg daily, and glimepiride 8 mg daily; A double-blind 26 week add-on to metformin trial compared Victoza® 0.6 mg once-daily, Victoza® 1.2 mg once-daily, Victoza® 1.8 mg once-daily, placebo, and glimepiride 4 mg once-daily; A double-blind 26 week add-on to glimepiride trial compared Victoza® 0.6 mg daily, Victoza® 1.2 mg once-daily, Victoza® 1.8 mg once-daily, placebo, and rosiglitazone 4 mg once-daily; A 26 week add-on to metformin + glimepiride trial, compared double-blind Victoza® 1.8 mg once-daily, double-blind placebo, and open-label insulin glargine once-daily; A doubleblind 26-week add-on to metformin + rosiglitazone trial compared Victoza® 1.2 mg once-daily, Victoza® 1.8 mg once-daily and placebo; An open-label 26-week add-on to metformin and/or sulfonylurea trial compared Victoza® 1.8 mg once-daily and exenatide 10 mcg twice-daily; An open-label 26-week add-on to metformin trial compared Victoza® 1.2 mg once-daily, Victoza® 1.8 mg once-daily, and sitagliptin 100 mg once-daily; An open-label 26-week trial compared insulin detemir as add-on to Victoza® 1.8 mg + metformin to continued treatment with Victoza® + metformin alone. Withdrawals: The incidence of withdrawal due to adverse events was 7.8% for Victoza®-treated patients and 3.4% for comparator-treated patients in the five double-blind controlled trials of 26 weeks duration or longer. This difference was driven by withdrawals due to gastrointestinal adverse reactions, which occurred in 5.0% of Victoza®-treated patients and 0.5% of comparator-treated patients. In these five trials, the most common adverse reactions leading to withdrawal for Victoza®-treated patients were nausea (2.8% versus 0% for comparator) and vomiting (1.5% versus 0.1% for comparator). Withdrawal due to gastrointestinal adverse events mainly occurred during the first 2-3 months of the trials. Common adverse reactions: Tables 1, 2, 3 and 4 summarize common adverse reactions (hypoglycemia is discussed separately) reported in seven of the eight controlled trials of 26 weeks duration or longer. Most of these adverse reactions were gastrointestinal in nature. In the five double-blind clinical trials of 26 weeks duration or longer, gastrointestinal adverse reactions were reported in 41% of Victoza®-treated patients and were dose-related. Gastrointestinal adverse reactions occurred in 17% of comparator-treated patients. Common adverse reactions that occurred at a higher incidence among Victoza®-treated patients included nausea, vomiting, diarrhea, dyspepsia and constipation. In the five double-blind and three open-label clinical trials of 26 weeks duration or longer, the percentage of patients who reported nausea declined over time. In the five double-blind trials approximately 13% of Victoza®-treated patients and 2% of comparator-treated patients reported nausea during the first 2 weeks of treatment. In the 26-week open-label trial comparing Victoza® to exenatide, both in combination with metformin and/or sulfonylurea, gastrointestinal adverse reactions were reported at a similar incidence in the Victoza® and exenatide treatment groups (Table 3). In the 26-week open-label trial comparing Victoza® 1.2 mg, Victoza® 1.8 mg and sitagliptin 100 mg, all in combination with metformin, gastrointestinal adverse reactions were reported at a higher incidence with Victoza® than sitagliptin (Table 4). In the remaining 26-week trial, all patients received Victoza® 1.8 mg + metformin during a 12-week run-in period. During the run-in period, 167 patients (17% of enrolled total) withdrew from the trial: 76 (46% of withdrawals) of these patients doing so because of gastrointestinal adverse reactions and 15 (9% of withdrawals) doing so due to other adverse events. Only those patients who completed the run-in period with inadequate glycemic control were randomized to 26 weeks of add-on therapy with insulin detemir or continued, unchanged treatment with Victoza® 1.8 mg + metformin. During this randomized 26-week period, diarrhea was the only adverse reaction reported in ≥5% of patients treated with Victoza® 1.8 mg + metformin + insulin detemir (11.7%) and greater than in patients treated with Victoza® 1.8 mg and metformin alone (6.9%).

Table 1: Adverse reactions reported in ≥5% of Victoza®-treated patients in a 52-week monotherapy trial All Victoza® N = 497 Glimepiride N = 248 (%) (%) Adverse Reaction Nausea 28.4 8.5 Diarrhea 17.1 8.9 Vomiting 10.9 3.6 Constipation 9.9 4.8 Headache 9.1 9.3 Table 2: Adverse reactions reported in ≥5% of Victoza®-treated patients and occurring more frequently with Victoza® compared to placebo: 26-week combination therapy trials Add-on to Metformin Trial All Victoza® + Metformin Placebo + Metformin Glimepiride + Metformin N = 724 N = 121 N = 242 (%) (%) (%) Adverse Reaction Nausea 15.2 4.1 3.3 Diarrhea 10.9 4.1 3.7 Headache 9.0 6.6 9.5 Vomiting 6.5 0.8 0.4 Add-on to Glimepiride Trial Placebo + Glimepiride Rosiglitazone + All Victoza® + Glimepiride N = 695 N = 114 Glimepiride N = 231 (%) (%) (%) Adverse Reaction Nausea 7.5 1.8 2.6 Diarrhea 7.2 1.8 2.2 Constipation 5.3 0.9 1.7 Dyspepsia 5.2 0.9 2.6 Add-on to Metformin + Glimepiride ® Victoza 1.8 + Metformin Placebo + Metformin + Glargine + Metformin + + Glimepiride N = 230 Glimepiride N = 114 Glimepiride N = 232 (%) (%) (%) Adverse Reaction Nausea 13.9 3.5 1.3 Diarrhea 10.0 5.3 1.3 Headache 9.6 7.9 5.6 Dyspepsia 6.5 0.9 1.7 Vomiting 6.5 3.5 0.4

Adverse Reaction Nausea Diarrhea Vomiting Headache Constipation

Add-on to Metformin + Rosiglitazone All Victoza® + Metformin + Placebo + Metformin + Rosiglitazone Rosiglitazone N = 355 N = 175 (%) (%) 34.6 8.6 14.1 6.3 12.4 2.9 8.2 4.6 5.1 1.1

Table 3: Adverse Reactions reported in ≥5% of Victoza®-treated patients in a 26-Week Open-Label Trial versus Exenatide Victoza® 1.8 mg once daily + Exenatide 10 mcg twice daily + metformin and/or sulfonylurea metformin and/or sulfonylurea N = 235 N = 232 (%) (%) Adverse Reaction Nausea 25.5 28.0 Diarrhea 12.3 12.1 Headache 8.9 10.3 Dyspepsia 8.9 4.7 Vomiting 6.0 9.9 Constipation 5.1 2.6 ® Table 4: Adverse Reactions in ≥5% of Victoza -treated patients in a 26-Week Open-Label Trial versus Sitagliptin All Victoza® + metformin Sitagliptin 100 mg/day + N = 439 metformin N = 219 (%) (%) Adverse Reaction Nausea 23.9 4.6 Headache 10.3 10.0 Diarrhea 9.3 4.6 Vomiting 8.7 4.1 Immunogenicity: Consistent with the potentially immunogenic properties of protein and peptide pharma® ceuticals, patients treated with Victoza may develop anti-liraglutide antibodies. Approximately 50-70% of Victoza®-treated patients in the five double-blind clinical trials of 26 weeks duration or longer were tested for the presence of anti-liraglutide antibodies at the end of treatment. Low titers (concentrations not requiring dilution of serum) of anti-liraglutide antibodies were detected in 8.6% of these Victoza®-treated patients.

Sampling was not performed uniformly across all patients in the clinical trials, and this may have resulted in an underestimate of the actual percentage of patients who developed antibodies. Cross-reacting antiliraglutide antibodies to native glucagon-like peptide-1 (GLP-1) occurred in 6.9% of the Victoza®-treated patients in the double-blind 52-week monotherapy trial and in 4.8% of the Victoza®-treated patients in the double-blind 26-week add-on combination therapy trials. These cross-reacting antibodies were not tested for neutralizing effect against native GLP-1, and thus the potential for clinically significant neutralization of native GLP-1 was not assessed. Antibodies that had a neutralizing effect on liraglutide in an in vitro assay occurred in 2.3% of the Victoza®-treated patients in the double-blind 52-week monotherapy trial and in 1.0% of the Victoza®-treated patients in the double-blind 26-week add-on combination therapy trials.

Among Victoza®-treated patients who developed anti-liraglutide antibodies, the most common category of adverse events was that of infections, which occurred among 40% of these patients compared to 36%, 34% and 35% of antibody-negative Victoza®-treated, placebo-treated and active-control-treated patients, respectively. The specific infections which occurred with greater frequency among Victoza®-treated antibody-positive patients were primarily nonserious upper respiratory tract infections, which occurred among 11% of Victoza®-treated antibody-positive patients; and among 7%, 7% and 5% of antibody-negative Victoza®-treated, placebo-treated and active-control-treated patients, respectively. Among Victoza®-treated antibody-negative patients, the most common category of adverse events was that of gastrointestinal events, which occurred in 43%, 18% and 19% of antibody-negative Victoza®-treated, placebo-treated and active-control-treated patients, respectively. Antibody formation was not associated with reduced efficacy of Victoza® when comparing mean HbA1c of all antibody-positive and all antibody-negative patients. However, the 3 patients with the highest titers of anti-liraglutide antibodies had no reduction in HbA1c with Victoza® treatment. In the five double-blind clinical trials of Victoza®, events from a composite of adverse events potentially related to immunogenicity (e.g. urticaria, angioedema) occurred among 0.8% of Victoza®-treated patients and among 0.4% of comparator-treated patients. Urticaria accounted for approximately one-half of the events in this composite for Victoza®-treated patients. Patients who developed anti-liraglutide antibodies were not more likely to develop events from the immunogenicity events composite than were patients who did not develop anti-liraglutide antibodies. Injection site reactions: Injection site reactions (e.g., injection site rash, erythema) were reported in approximately 2% of Victoza®-treated patients in the five double-blind clinical trials of at least 26 weeks duration. Less than 0.2% of Victoza®-treated patients discontinued due to injection site reactions. Papillary thyroid carcinoma: In clinical trials of Victoza®, there were 7 reported cases of papillary thyroid carcinoma in patients treated with Victoza® and 1 case in a comparator-treated patient (1.5 vs. 0.5 cases per 1000 patient-years). Most of these papillary thyroid carcinomas were <1 cm in greatest diameter and were diagnosed in surgical pathology specimens after thyroidectomy prompted by findings on protocol-specified screening with serum calcitonin or thyroid ultrasound. Hypoglycemia: In the eight clinical trials of at least 26 weeks duration, hypoglycemia requiring the assistance of another person for treatment occurred in 11 Victoza®-treated patients (2.3 cases per 1000 patient-years) and in two exenatidetreated patients. Of these 11 Victoza®-treated patients, six patients were concomitantly using metformin and a sulfonylurea, one was concomitantly using a sulfonylurea, two were concomitantly using metformin (blood glucose values were 65 and 94 mg/dL) and two were using Victoza® as monotherapy (one of these patients was undergoing an intravenous glucose tolerance test and the other was receiving insulin as treatment during a hospital stay). For these two patients on Victoza® monotherapy, the insulin treatment was the likely explanation for the hypoglycemia. In the 26-week open-label trial comparing Victoza® to sitagliptin, the incidence of hypoglycemic events defined as symptoms accompanied by a fingerstick glucose <56 mg/ dL was comparable among the treatment groups (approximately 5%).

Table 5: Incidence (%) and Rate (episodes/patient year) of Hypoglycemia in the 52-Week Monotherapy Trial and in the 26-Week Combination Therapy Trials Victoza® Treatment Active Comparator Placebo Comparator None Monotherapy Victoza® (N = 497) Glimepiride (N = 248) Patient not able to self−treat 0 0 — Patient able to self−treat 9.7 (0.24) 25.0 (1.66) — Not classified 1.2 (0.03) 2.4 (0.04) —

Add-on to Metformin

Victoza® + Metformin (N = 724)

Glimepiride + Placebo + Metformin Metformin (N = 121) (N = 242) Patient not able to self−treat 0.1 (0.001) 0 0 Patient able to self−treat 3.6 (0.05) 22.3 (0.87) 2.5 (0.06) ® ® Insulin detemir + Continued Victoza None Add-on to Victoza + Metformin Victoza® + Metformin + Metformin alone (N = 158*) (N = 163) Patient not able to self−treat 0 0 — Patient able to self−treat 9.2 (0.29) 1.3 (0.03) — Add-on to Glimepiride Victoza® + Glimepiride Rosiglitazone + Placebo + Glimepiride (N = 695) Glimepiride (N = 231) (N = 114) Patient not able to self−treat 0.1 (0.003) 0 0 Patient able to self−treat 7.5 (0.38) 4.3 (0.12) 2.6 (0.17) Not classified 0.9 (0.05) 0.9 (0.02) 0 Placebo + Metformin Add-on to Metformin + Victoza® + Metformin + Rosiglitazone None + Rosiglitazone Rosiglitazone (N = 355) (N = 175) Patient not able to self−treat 0 — 0 Patient able to self−treat 7.9 (0.49) — 4.6 (0.15) Not classified 0.6 (0.01) — 1.1 (0.03) Add-on to Metformin + Victoza® + Metformin Insulin glargine Placebo + Metformin + Glimepiride + Metformin + + Glimepiride Glimepiride (N = 230) (N = 114) Glimepiride (N = 232) Patient not able to self−treat 2.2 (0.06) 0 0 Patient able to self−treat 27.4 (1.16) 28.9 (1.29) 16.7 (0.95) Not classified 0 1.7 (0.04) 0 *One patient is an outlier and was excluded due to 25 hypoglycemic episodes that the patient was able to self-treat. This patient had a history of frequent hypoglycemia prior to the study.

In a pooled analysis of clinical trials, the incidence rate (per 1,000 patient-years) for malignant neoplasms (based on investigator-reported events, medical history, pathology reports, and surgical reports from both blinded and open-label study periods) was 10.9 for Victoza®, 6.3 for placebo, and 7.2 for active comparator.

After excluding papillary thyroid carcinoma events [see Adverse Reactions], no particular cancer cell type predominated. Seven malignant neoplasm events were reported beyond 1 year of exposure to study medication, six events among Victoza®-treated patients (4 colon, 1 prostate and 1 nasopharyngeal), no events with placebo and one event with active comparator (colon). Causality has not been established. Laboratory Tests: Bilirubin: In the five clinical trials of at least 26 weeks duration, mildly elevated serum bilirubin concentrations (elevations to no more than twice the upper limit of the reference range) occurred in 4.0% of Victoza®-treated patients, 2.1% of placebo-treated patients and 3.5% of active-comparator-treated patients.

This finding was not accompanied by abnormalities in other liver tests. The significance of this isolated finding is unknown. Calcitonin: Calcitonin, a biological marker of MTC, was measured throughout the clinical development program. At the end of the clinical trials, adjusted mean serum calcitonin concentrations were higher in Victoza-treated patients compared to placebo-treated patients but not compared to patients receiving active comparator. Between group differences in adjusted mean serum calcitonin values were approximately 0.1 ng/L or less. Among patients with pretreatment calcitonin <20 ng/L, calcitonin elevations to >20 ng/L occurred in 0.7% of Victoza-treated patients, 0.3% of placebo-treated patients, and 0.5% of active-comparator-treated patients. The clinical significance of these findings is unknown. Vital signs: Victoza® did not have adverse effects on blood pressure. Mean increases from baseline in heart rate of 2 to 3 beats per minute have been observed with Victoza® compared to placebo. The long-term clinical effects of the increase in pulse rate have not been established [see Warnings and Precautions]. Post-Marketing Experience: The following additional adverse reactions have been reported during post-approval use of Victoza®. Because these events are reported voluntarily from a population of uncertain size, it is generally not possible to reliably estimate their frequency or establish a causal relationship to drug exposure: Medullary thyroid carcinoma [see Warnings and Precautions]; Dehydration resulting from nausea, vomiting and diarrhea [see Warnings and Precautions]; Increased serum creatinine, acute renal failure or worsening of chronic renal failure, sometimes requiring hemodialysis [see Warnings and Precautions]; Angioedema and anaphylactic reactions [see Contraindications, Warnings and Precautions]; Allergic reactions: rash and pruritus; Acute pancreatitis, hemorrhagic and necrotizing pancreatitis sometimes resulting in death [see Warnings and Precautions].

OVERDOSAGE: Overdoses have been reported in clinical trials and post-marketing use of Victoza®. Effects have included severe nausea and severe vomiting. In the event of overdosage, appropriate supportive treatment should be initiated according to the patient’s clinical signs and symptoms.

More detailed information is available upon request.

For information about Victoza® contact: Novo Nordisk Inc., 800 Scudders Mill Road, Plainsboro, NJ 08536, 1−877-484-2869 Date of Issue: March 9, 2015 Version: 8 Manufactured by: Novo Nordisk A/S, DK-2880 Bagsvaerd, Denmark Victoza® is a registered trademark of Novo Nordisk A/S. Victoza® is covered by US Patent Nos. 6,268,343, 6,458,924, 7,235,627, 8,114,833 and other patents pending.

Victoza® Pen is covered by US Patent Nos. 6,004,297, RE 43,834, RE 41,956 and other patents pending. © 2010-15 Novo Nordisk 0315-00026110-1 4/2015

AMCP 2015 HIGHLIGHTS

Payers’ Perspectives: Health Economics Outcomes in Managed Care

By Charles Bankhead, Medical Writer

The following summaries represent a sample of the many studies presented at the 27th Annual Meeting of the Academy of Managed Care Pharmacy (AMCP), April 7-10, 2015, in San Diego, CA. These summaries highlight some of the main

trends in the current US healthcare, reflecting the impact of real-world, evidence-based issues of high interest for payers, employers, drug manufacturers, providers, patients, and other healthcare stakeholders.

Medication Adherence in Public Exchanges Not Different from Commercial, Nonexchange Plans There has been considerable debate about the quality of the care provided in the public health insurance exchange plans. A new analysis compared medication adherence between public health insurance exchange plans and commercial nonexchange plans using real-­ world medication possession ratio (MPR) data, demonstrating a lack of significant difference between patients in public health insurance exchange programs and those covered by commercial nonexchange plans in terms of drug therapy for chronic disease.

The results of this retrospective, case-controlled study

by Kheelan Gopal, PharmD, of CVS/Caremark, and colleagues, were presented at the 2015 AMCP meeting.

Medication adherence was assessed by MPR, showing no significant difference in patient adherence across 4 common chronic conditions.

In the brief history of the public health insurance exchange plans, little information has emerged regarding the metrics associated with utilization and cost of care. Dr Gopal and colleagues sought to inform the issues by comparing medication adherence rates, cost, and utilization in public plans versus in commercial insurance plans.

The results showed that medication utilization was similar across plans, even though the public exchange population was older, they added. However, patients who were enrolled in the public exchanges did lag behind in terms of optimal adherence to therapy. Nevertheless, “although there was a statistical difference in optimally adherent members between the public exchange population versus the comparators, this finding is not clinically significant due to a number of factors,” the investigators emphasized.

The public insurance exchanges included generic drugs more often than commercial insurance plans, and

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the annual per-member cost of medication was generally lower across various medication categories compared with members in employer or other commercial health insurance plans.

The investigators examined claims for public exchanges (not including Medicare or Medicaid) and for commercial nonexchange plans for the period between January 1, 2014, and December 31, 2014. They limited their review to medications for the treatment of the 4 chronic conditions—hyperlipidemia, depression, diabetes, and hypertension. The analysis compared the results of public exchanges, employer-provided plans, and nonemployer commercial plans.

The public exchanges had a generic dispensing rate of 87.42% versus 81.37% in employer-provided plans, respectively, and 82.95% in the other health plans. The mail dispensing rate was higher in the employer-provided plans (49.04%) than in the health plan (10.49%) or public insurance exchanges plan (9.65%) populations.

The age-adjusted MPR did not differ among the 3 types of plans for any of the 4 conditions, including hyperlipidemia (range, 74%-80%), depression (range, ­ 69%-73%), diabetes (range, 73%-79%), and hypertension (range, 75%-82%).

The rates of optimal therapy were lower in the public insurance exchanges plan than in the other populations for all 4 conditions, including hyperlipidemia (55% vs 61%-66%, respectively; P <.01), depression (49% vs 50%-55%, respectively; P <.01), diabetes (52% vs 56%61%, respectively; P <.01), and hypertension (58% vs 64%-70%, respectively; P <.01).

Antiviral drugs were the top drug class by utilization for the public exchanges, at a cost of $147.72, surpassing employer ($74.28) and nonemployer ($87.12) commercial plans. For the remaining top 10 drug classes, the

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public exchanges had lower or similar costs compared with the commercial plans (antidiabetes drugs, analgesics/anti-inflammatory drugs, psychotherapeutic/neurologic drugs, antiasthmatic/bronchodilator drugs, dermatologics, opioids, antineoplastics/adjunctive therapies, antidepressants, and antihyperlipidemic drugs).

“The public insurance exchange plans are similar to the health plan population in terms of utilization; how-

ever, the public insurance exchange has an overall older population and higher generic utilization than observed in the commercial non-exchange population,” Dr Gopal and colleagues observed. n [Source: Gopal K, Nguyen J, Chalker JL, Weber B. Analysis of adherence between public health insurance exchange plans and commercial non-exchange plans.]

Medicaid Expansion Beneficiaries More Adherent to Hepatitis C Therapy than Traditional Medicaid Population Under the Affordable Care Act (ACA) expansion plan, more members with hepatitis C virus (HCV) infection now qualify for Medicaid, thereby increasing the risk for Medicaid plans, because of the high cost associated with the new HCV therapies.

A group of pharmacists from Passport Health Plan, a managed Medicaid plan with more than 200,000 members in Louisville, KY, conducted a retrospective analysis to compare utilization trends of HCV therapies between expansion patients and traditional Medicaid patients in their plans. They presented their results at the 2015 AMCP meeting.

Using pharmacy claims from their Medicaid plan, Mary Bystrek, PharmD, and colleagues found that new members who were eligible for Medicaid under the ACA’s expansion program had a substantially lower discontinuation rate with sofosbuvir regimens than the traditional Medicaid population that was treated for HCV. Dr Bystrek and colleagues compared the utilization and discontinuation of sofosbuvir-containing regimens among a Passport Health Plan expansion Medicaid population and a traditional Medicaid population, which included all other categories of aid. Their retrospective analysis included pharmacy claims for members who started sofosbuvir therapy between January 1, 2014, and August 1, 2014.

The data analysis included 143 members, 40% of whom were from the expansion cohort. Overall, members with Medicaid expansion account for 35% of Passport Health Plan’s total membership.

The analysis showed that 111 (77.6%) of the 143 members completed their treatment. The 143 patients included 129 patients who received sofosbuvir plus ribavirin, with or without pegylated interferon, which was associated with a discontinuation rate of 22.6%.

Among the 75 (52%) patients who received an interferon-free regimen, the discontinuation rate was 22.4%.

Medicaid members who received simeprevir-containing regimens had a discontinuation rate of 17%.

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Overall, 32 patients discontinued treatment before the completion of their regimen, consisting of 22 patients from the traditional Medicaid cohort and 10 patients from the expansion cohort. A total of 22.4% of patients discontinued their HCV treatment before completion of the regimen. However, the discontinuation rate was 26% for the traditional population versus 18% for the expansion cohort that qualified for Medicaid coverage through the ACA. Moreover, the traditional Medicaid cohort accounted for 69% of all discontinuations that occurred during the 12 months of follow-up.

“Forty percent of sofosbuvir utilizers were expansion members, correlating with the top drug spend among this population,” observed Dr Bystrek and colleagues.

“The expansion population had a lower discontinuation rate than the traditional population. As many expansion members were new to receiving a healthcare benefit, perhaps this population was more committed ­to therapy.”

Throughout 2014, sofosbuvir topped all other drugs in terms of expenditures for Passport Health Plan. In this Medicaid plan, sofosbuvir ranked at the top across all categories of aid. Few studies have examined the rates of discontinuation and adherence to sofosbuvir regimens among patients who qualified for Medicaid coverage through the ACA. “As revised criteria have recently been set for all hepatitis C medications at Passport Health Plan, it will expectantly become easier to follow members on therapy and evaluate discontinuation rates while also considering clinical information,” the investigators concluded. “It will be of value to continuing monitoring those on therapy as new medications are released and as Passport Health Plan’s membership continues to grow.” n [Source: Bystrek M, Armstrong C, Wathen C. Analysis of Sovaldi (sofosbuvir) utilization in a KY Medicaid traditional and expansion population.]

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Increasing Interest of Payers in Partnering with Manufacturers on Programs for Drug Adherence in Specific Disease States Payers express a cautious but growing interest in partnering with drug manufacturers to improve patient medication adherence, according to a recent study based on payer surveys presented at the 2015 AMCP meeting.

Payers’ willingness to participate in adherence programs that target high-risk patient populations increased from 37% in 2011 to 43% in 2014, but that increase in 2014 actually represented a more than 10% decline from 2013, when 48% of survey respondents to the 2013 survey indicated a willingness to partner with manufacturers to improve patient medication adherence. This upand-down trend may reflect some payer ambivalence toward partnerships with drug manufacturers specifically about medication adherence.

“Payers are interested in participating in compliance/persistency programs despite significant barriers, such as financial and operational problems,” suggested Lindsay Allen of Mercer University, Macon, GA, and an intern at Xcenda, Palm Harbor, FL, and colleagues from Xcenda.

The study included responses to 3 surveys of payers representing 100 million to 150 million covered lives annually. A total of 59 payer respondents completed the survey in 2011, 60 responded in 2013, and 56 in 2014. A majority of the payer respondents represented managed care organizations.

The responses to the 2014 survey showed that the total cost-savings was the principal reason for participating in partnership adherence programs for 55% of payers.

Regarding barriers to participating in drug adherence programs, survey respondents cited lack of integration (57%) and cost (48%) as the greatest barriers to their participation in such programs. Other key influencing

factors were a lack of necessary technology (41.1%), lack of efficacy data (39.3%), no supporting payment or business strategies in place (26.8%), and a lack of incentives in the Affordable Care Act or by Medicare (23.2%).

The cumulative data from the 3 surveys revealed various factors driving payer interest in drug adherence programs across the different disease categories: • For arthritis, the biggest driver was increased patient satisfaction (43%) • Quality improvement headed the list of factors for cholesterol management (75%) • The total healthcare costs fueled interest in adherence for cardiology and/or diabetes (86%) and for multiple sclerosis (57%).

Payers’ interest in sharing claims data for high-risk populations with manufacturer partners remained fairly stable at 27% in 2011, 33% in 2013, and 27% in 2014.

Across the 3 surveys, 83% to 93% of payer respondents said that the effect of adherence or persistence programs on hospitalization was the most impactful data.

In addition, at least 80% of respondents annually said that reductions in overall costs related to disease state and emergency department visits constituted impactful data.

“While payers are interested in partnership opportunities with manufacturers, data sharing is a significant area of concern. Partnerships between payers and manufacturers within certain disease states will be most productive when they align with payer needs (eg, improvement of quality measures, decrease of total costs),” Ms Allen and colleagues observed. n [Source: Allen L, Jackson J, Denno M. Trends in medication adherence: a payer’s perspective.]

Mixed Results with Prior Authorization for Drug Compounding Pharmacies More than 7500 pharmacies are specializing in compounding services in the United States, and they process more than 30 million prescriptions annually. To reduce the costs associated with compounding and ensure appropriate utilization, many health insurance plans have instituted prior authorization for claims that exceed specific thresholds.

A new analysis conducted by CVS/Caremark showed that prior authorization policies have mixed results with respect to controlling the costs associated with multi-ingredient compound medications. The results of this retrospective analysis of claims data from CVS/Caremark were presented at the 2015 AMCP meeting by Ahmed M. Guhad, PharmD, CVS/Caremark, and colleagues.

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Placing a $400 cost limit per compound per claim submitted to the pharmacy led to a reduction in the average cost per compound claim, as well as the total plan costs for compound claims. However, the volume of claims for compounds costing from $251 to $400 increased by 86%, potentially reflecting split filling of prescriptions by the compounding pharmacies.

Claim costs for compounded pharmaceuticals have increased dramatically in recent years. For example, the number of compound claims increased by 100% over the past 3 years within the CVS/Caremark employer book of business, and the gross cost per compound claim increased by 1700%, the researchers noted.

To deal with the rising number of and costs associated

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with compound claims, some payers have implemented prior authorization policies. The impact of the policies on claims and costs has not been studied extensively.

Dr Guhad and colleagues analyzed compound claims data for multiple plans from March 2014 to October 2014. They compared cost and utilization metrics for 717 plans that opted in to a prior authorization program with a $400 limit per compound claim with the cost and utilization of 39 plans that opted out.

The data showed that plans that opted out of prior authorization had an average cost per compound claim that was almost 8 times higher than that of the plans that opted in (P <.05). Opt-out plans had a 14% increase in the total cost of compound claims, whereas opt-in plans had a 90% decrease. In the opt-in group, 0.5% of the compound claims exceeded a cost of $400.

The total number of compound claims increased by 3% in the opt-out plans, whereas the number of compound claims decreased by 19% among the opt-in plans, despite an 86% increase in the number of claims that

cost $251 to $400.

In the opt-out group, 5 ingredients accounted for 56.7% of the total cost of all compound claims—flurbiprofen powder, gabapentin powder, fluticasone powder, ketamine hydrochloride powder, and resveratrol powder.

Five ingredients accounted for 43.2% of the total cost of compound claims in the opt-in group—flurbiprofen, gabapentin, ketamine hydrochloride, progesterone powder for micronization, and PracaSil-Plus.

“The specialties of nearly one third of the prescribers of multi-ingredient compound prescriptions are unknown,” Dr Guhad and colleagues observed.

“Prior authorization with a dollar limit can help decrease plan cost and utilization of compound claims,” they noted.

“If the cost and utilization of compound claims continue to grow, additional strategies may be warranted.” n [Source: Guhad AM, Brinson J, Jay MA. Utilization and cost metric analysis on the impact of a PA program targeting compound claims.]

Managed Care versus Fee-for-Service Care: Modest Cost Advantage, No Quality-of-Life Difference Managed care plans have achieved mixed results in their quest to control medical costs while maintaining patient satisfaction. In a national survey of medical expenditures comparing managed care versus fee-for-service (FFS) care, managed care had a slight cost advantage over FFS care, but the 2 strategies came out even in terms of health-related quality-of-life (HRQOL) scores, according to Aniket A. Kawatkar, PhD, MS, BPharm, of Kaiser Permanente Southern California, Pasadena, who presented the results at the 2015 AMCP meeting.

The total out-of-pocket (OOP) costs for managed care members averaged $147 less than the OOP costs for patients receiving FFS care. Inpatient care and medication costs accounted for most of the difference. The 2 cohorts had similar scores for composite physical and mental health, as ascertained by the Short Form-12 version 2 (SF-12) HRQOL instrument.

Data for the analysis came from the 2012 Medical Expenditure Panel Survey Household Component, a nationally representative survey of the noninstitutionalized US civilians. Data were extrapolated nationwide, resulting in 2 patient populations exceeding 50 million persons each. The primary outcomes were OOP costs and expenditures (consisting of overall total, office visits, office physician visits, hospital outpatient visits, emergency department visits, inpatient stays, and prescription drugs) and the 2 composite scores of the SF-12.

The study population included a mean age of approxi-

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mately 48 years, 81% were white, 53% were women, 92% were residents in a metropolitan statistical area, and 51% were categorized as having a high income. The managed care and FFS groups did not differ substantially with respect to health status or specific diseases or conditions.

After adjustment, the overall total expenditures were $241 less in the managed care group, and the total OOP costs were $147 less. Of the $147 differential, the inpatient costs accounted for $65, prescriptions for $55, office visits for $14, hospital outpatient visits for $10, and emergency department visits for $6.

“Economic efficiency of participation in managed care plans was limited to small out-of-pocket cost savings in this nationally representative US sample,” reported Dr Kawatkar. “Further research is necessary to understand the trade-off between choice restrictions of managed care participation and lower out-of-pocket patient costs.”

Key drivers of the total expenditures were inpatient expenditures ($190 less with managed care), hospital outpatient care ($63 less), and prescriptions ($56 less). Office visits and office physicians visits were $122 and $109 higher, respectively, with managed care than with FFS care. The HRQOL scores of the 2 patient populations were virtually even for the physical and mental composites of the SF-12. n [Source: Kawatkar AA. Out of pocket cost, expenditures and health related quality of life in managed care plan members.]

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ORIGINAL RESEARCH

Adherence to Insulin Pen Therapy Is Associated with Reduction in Healthcare Costs Among Patients with Type 2 Diabetes Mellitus Arthi Chandran, MS, MPH; Machaon K. Bonafede, PhD, MPH; Sonali Nigam, MPH; Rita Saltiel-Berzin, RN, MPH, CDE, CHES; Laurence J. Hirsch, MD; Betsy J. Lahue, MPH

Stakeholder Perspective, page 157

Am Health Drug Benefits.

2015;8(3):148-158 www.AHDBonline.com Received December 5, 2014 Accepted in final form April 3, 2015

Disclosures are at end of text

D

BACKGROUND: Type 2 diabetes mellitus is a chronic metabolic disorder that poses a significant economic burden on the US healthcare system associated with direct and indirect medical costs, loss of productivity, and premature mortality.

OBJECTIVES: To determine whether increased adherence to therapy among patients with type 2 diabetes who use an insulin pen is associated with reduced healthcare costs, and to describe the overall healthcare costs of patients with type 2 diabetes.

METHODS: This retrospective claims database analysis used the Truven Health MarketScan Commercial and Medicare Supplemental databases to identify patients diagnosed with type 2 diabetes with at least 1 insulin pen prescription claim between January 2006 and September 2010. Insulin pen adherence was measured using the medication possession ratio (MPR). The cost outcomes included all-cause and type 2 diabetesâ&#x20AC;&#x201C;related costs by type of service (ie, inpatient, outpatient medical, outpatient pharmacy), which were calculated in 2011 US dollars. Insulin adherence and overall healthcare costs were evaluated over the 12-month postindex period.

RESULTS: A total of 32,361 patients met the study inclusion criteria, with an average MPR of 0.63 (standard deviation [SD], 0.29). Overall, patients with type 2 diabetes who used an insulin pen had an average annual healthcare cost of $19,612, which was driven by inpatient costs (37.2%) and outpatient pharmacy costs (24.4%). There is a significant difference in the average annual per-patient healthcare expenditures between the least adherent group (MPR <0.20; 11.0% of patients) and the most adherent group (MPR >0.80; 34.6% of patients) $26,310 versus $23,839, respectively (P = .007). Patients with the greatest insulin adherence had higher overall pharmacy costs than patients with the lowest insulin adherence ($10,174 vs $5395, respectively; P <.001).

CONCLUSIONS: The total healthcare expenditures of patients with type 2 diabetes who utilized insulin pens decreased with improvement in adherence, suggesting that higher rates of medication adherence may present an opportunity to curb healthcare costs in insulin pen users. The average sample MPR for our study population was 0.63 (SD, 0.29), indicating that insulin adherence continues to be a challenge for successful diabetes management. More research is needed to better characterize the relationship between medication adherence and healthcare costs among insulin users with type 2 diabetes and to identify the key drivers of adherence among this patient group.

KEY WORDS: type 2 diabetes, type 1 diabetes, insulin pen, healthcare cost, medical costs, pharmacy costs, insulin adherence, diabetes management

iabetes mellitus is a chronic metabolic disorder posing a significant economic burden on the US healthcare system. According to the American

Diabetes Association, an estimated 22.3 million people in the United States were diagnosed with diabetes in 2012, representing approximately 7% of the population.1

Ms Chandran is Senior Director, Health Economics and Outcomes Research, Becton Dickinson; Dr Bonafede is Director of Outcomes Research, Truven Health Analytics, Cambridge, MA; Ms Nigam was Senior Analyst, Health Economics and Outcomes Research, Becton Dickinson, at the time of this study; Ms Saltiel-Berzin is World Clinical Education Specialist, Diabetes Care, Department of Medical Affairs, Becton Dickinson; Dr Hirsch is Worldwide Vice President, Diabetes Care, Department of Medical Affairs, Becton Dickinson; Ms Lahue is Worldwide Vice President, Health Economics and Outcomes Research, Becton Dickinson, Franklin Lakes, NJ.

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Insulin Pen Therapy for Type 2 Diabetes

The prevalence of diabetes increased by 23% from 2007 to 2012 and is projected to increase to 1 in 3 adults by 2050.1 In 2012, the total estimated cost of diagnosed diabetes was $245 billion, including $176 billion in direct medical costs and $69 billion in lost productivity.1 The most common long-term complications of diabetes mellitus are retinopathy, with a potential loss of vision; nephropathy leading to renal failure; peripheral neuropathy, which is associated with the risk for foot ulcers and amputation; and cardiovascular-related morbidity and mortality.2 Patients with diabetes often progress toward numerous metabolic abnormalities, leading to a high risk for cardiovascular-related morbidity and mortality, with greater disease severity associated with higher risk.3 Diabetes is classified into type 1, type 2, and gestational disease. Type 1 diabetes accounts for approximately 5% to 10% of all cases of diabetes in the United States, whereas type 2 diabetes accounts for 90% to 95% of all cases.2 Glycemic control is crucial for preventing or minimizing the long-term complications associated with diabetes. To achieve and maintain optimal glycemic control, type 1 diabetes is generally managed through lifestyle changes. Similarly, type 2 diabetes management may also require lifestyle changes (including diet), but the disease may progress to require a combination of oral medications, noninsulin injectables, and/or insulin therapy in addition to lifestyle changes.4 The American College of Endocrinology (ACE) and American Association of Clinical Endocrinologists (AACE) suggest lifestyle management for all phases of type 2 diabetes, intensifying at higher hemoglobin (Hb) A1c levels. The ACE/AACE guidelines also recommend initiating oral antidiabetic medications when the HbA1c level is between 6% and 7%, and adding insulin therapy when the HbA1c level exceeds 8% among therapy-naïve patients, typically beginning with basal (ie, long-acting) insulin, and adding bolus (ie, short-acting) insulin if further intervention is needed.4 Because of the substantial human and economic burdens of type 2 diabetes, there is interest in understanding real-world patient adherence to, and persistence with, insulin therapy in this patient population; adherence measures the use of a medication as directed during treatment, and persistence measures treatment duration.5 Previous research has described poor adherence to oral medications and to insulin therapy.6 Similarly, insulin persistence is low, ranging from 26% to 52% in the year after the initiation of basal insulin, and even lower, at 19% to 42%, for bolus insulin.7 Recent research suggests that patients with type 2 diabetes who start therapy or are converted to insulin therapy with a pen demonstrate comparable or improved medication adherence versus patients who receive insulin with a

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KEY POINTS Type 2 diabetes mellitus carries a major economic burden stemming from direct and indirect medical costs, loss of productivity, and premature mortality. ➤ This retrospective claims-based analysis investigated whether improved adherence to insulin pen therapy could mitigate healthcare costs in patients with type 2 diabetes. ➤ The average annual per-patient healthcare expenditures in the least adherent cohort was 1.53 times higher ($27,707) than in the most adherent group of patients ($18,068). ➤ In the postindex period, the total all-cause expenditures were significantly (P = .007) lower for the most adherent group ($23,839) versus the least adherent group ($26,310). ➤ Patients with the greatest insulin adherence had almost double the overall pharmacy costs compared with patients with the lowest adherence ($10,174 vs $5395, respectively; P <.001). ➤ According to this real-world pharmacy and medical analysis, the total healthcare cost of patients with type 2 diabetes who used insulin pens decreased with improvement in adherence. ➤ More research is needed to characterize the exact relationship between insulin adherence and healthcare costs. ➤

vial or syringe.8-10 Health resource utilization, based on claims for hypoglycemic events, emergency department visits, physician visits, and annual medication costs, was found to be lower in patients using insulin pens.8-10 Compared with syringes, insulin pen devices have been shown to provide more reliable, accurate, and simplified dosing.11-13 Insulin delivery systems other than a vial or a syringe have the potential to improve factors such as patient treatment satisfaction, treatment adherence, and clinical outcomes.9 The use of these systems, such as prefilled insulin pens, in the United States has lagged behind other countries.9 The substantial and growing burden of type 2 diabetes and opportunities to curb its associated costs have been the focus of policymakers, payers, and nonprofit organizations. Strategies to improve medication adherence and its potential to lower healthcare resource utilization and costs for patients with type 2 diabetes are of interest to a wide variety of stakeholders.14,15 Consequently, there is significant interest in understanding the association between insulin adherence and healthcare costs for patients with type 2 diabetes who are insulin pen users.

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The objectives of this study were to determine if higher insulin pen adherence among patients with type 2 diabetes who are insulin pen users was associated with lower healthcare costs, and to describe the overall healthcare costs of patients with type 2 diabetes. This study may provide insights to payers and providers to guide future analyses in identifying ways to improve diabetes care outcomes and to lower the associated healthcare expenditures.16

Methods Study Design In this retrospective claims database study we analyzed privately insured patients diagnosed with type 2 diabetes between January 2006 and September 2010. In this study, we evaluated the impact of adherence to insulin therapy on healthcare costs among patients with type 2 diabetes using insulin pens.

For this study, we used 2 MarketScan research databases from Truven Healthâ&#x20AC;&#x201D;the Commercial Claims and Encounters (commercial) database and the Medicare Supplemental and Coordination of Benefits (Medicare supplemental) database. The commercial database contains the inpatient, outpatient, emergency department, and outpatient prescription drug experiences of several million individuals and their dependents in the United States. The overall database includes individuals from more than 100 self-insured employers and health plans.

The Medicare supplemental database contains the healthcare data of individuals with Medicare supplemental insurance paid for by employers. The MarketScan research databases contain the healthcare data of privately insured individuals covered under a variety of fee-for-service, fully capitated, and partially capitated health plans. The health plans include preferred provider organizations, point of service plans, indemnity plans, and HMOs. Inclusion Criteria The Truven Health MarketScan Research Databases were used to identify adults (aged â&#x2030;Ľ18 years) with at least 1 insulin pen prescription claim (ie, the index event) between January 2006 and September 2010. They were also required to have continuous medical and pharmacy benefits for 12 months before and after the index event. Patients were required to have a diagnosis of type 2 diabetes mellitus (International Classification of Diseases, Ninth Revision, Clinical Modification [ICD-9-CM] code 250.x0 or 250. x2) and the use of any oral antidiabetes agent in the 12 months before the index event. Patients were excluded if they had a diagnosis of type 1 diabetes mellitus (ICD-9CM code 250.x1 or 250.x3) or gestational diabetes (ICD9-CM code 648.8x), or if they used an insulin pump or oral or inhaled insulin during the study period.

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The demographic characteristics were defined at the index event, including age, sex, geographic region, and insurance plan type, as shown in Table 1. The clinical characteristics were defined separately for the 12 months before and after the index event based on the presence of nondiagnostic or nonancillary claims for microvascular conditions (ie, diabetic retinopathy, macular edema, diabetic neuropathy, amputation, ulceration, renal disease), macrovascular conditions (ie, myocardial infarction, ischemic heart disease, congestive heart failure, peripheral vascular disease, cerebrovascular disease), and other general comorbid conditions (ie, anxiety, depression, dyslipidemia, hypertension).

The use of biguanides, sulfonylureas, meglitinides, thiazolidinediones, alpha-glucosidase inhibitors, fixeddose therapies, antihyperlipidemics, antihypertensives, antidepressants, antiobesity medications, antiemetic/antinausea medications, exenatide, and liraglutide was also reported separately in the 12 months before and after the index event.

Measurements The Charlson/Deyo Comorbidity Index, which measures the severity of comorbid conditions, was calculated and reported separately for the 12 months before and after the index insulin pen claim.17 Adherence to insulin was measured using the medication possession ratio (MPR), which is a standard measure for assessing treatment adherence as the extent to which a patient acts in accordance with the prescribed dosing interval and dose of a regimen. Persistence is defined as the duration of time from the initiation of a therapy to its discontinuation. In this analysis, adherence is used as an overarching term to describe adherence to therapy and persistence with therapy. MPR is a frequently used measure of adherence.18 Because of the data source, however, MPR is actually measuring refill adherence, because the data source does not contain information on whether the medication was actually used by the patient.

The MPR was calculated using the daysâ&#x20AC;&#x2122; supply filled of the insulin prescription claims, which was adjusted to account for variations in time between insulin refills.19 The MPR was reported as a continuous measure. The patients were also stratified by MPR quintile, ranging from least compliant (MPR, 0-0.20) to most compliant (MPR, 0.81-1.00). Insulin nonpersistence was previously defined as the presence of a 90-day gap in prescription claims for insulin.20,21 The annual direct medical costs were calculated by summing the patient and payer portions of all health insurance claims for the year before and the year after the index claim. The total costs were reported, as were the inpatient, outpatient, emergency department, and out-

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Insulin Pen Therapy for Type 2 Diabetes

Table 1 D emographic Characteristics of Study Participants Medication possession ratio 0.0-0.20 0.21-0.40 0.41-0.60 0.61-0.80 0.81-1.00 Total Patient demographics (N = 3560) (N = 4093) (N = 5973) (N = 7529) (N = 11,206) (N = 32,361) Age, yrs, mean (SD)

57.5 (13.0)

58.0 (12.7)

58.8 (12.2)

59.6 (11.3)

59.8 (10.4)

59.1 (11.6)

18-24 yrs

14 (0.4)

13 (0.3)

7 (0.1)

11 (0.1)

7 (0.1)

52 (0.2)

25-34 yrs

103 (2.9)

123 (3.0)

128 (2.1)

112 (1.5)

121 (1.1)

587 (1.8)

35-44 yrs

449 (12.6)

441 (10.8)

558 (9.3)

535 (7.1)

603 (5.4)

2586 (8.0)

45-54 yrs

875 (24.6)

1023 (25.0)

1432 (24.0)

1699 (22.6)

2535 (22.6)

7564 (23.4)

55-64 yrs

1223 (34.4)

1415 (34.6)

2230 (37.3)

3009 (40.0)

4859 (43.4)

12,736 (39.4)

65-74 yrs

470 (13.2)

598 (14.6)

888 (14.9)

1353 (18.0)

2029 (18.1)

5338 (16.5)

75-84 yrs

357 (10.0)

408 (10.0)

620 (10.4)

695 (9.2)

942 (8.4)

3022 (9.3)

69 (1.9)

72 (1.8)

110 (1.8)

115 (1.5)

110 (1.0)

476 (1.5)

Male

1744 (49.0)

2036 (49.7)

2939 (49.2)

3963 (52.6)

6272 (56.0)

16,954 (52.4)

Female

1816 (51.0)

2057 (50.3)

3034 (50.8)

3566 (47.4)

4934 (44.0)

15,407 (47.6)

Age-group, N (%)

â&#x2030;Ľ85 yrs Sex, N (%)

Geographic region, N (%) Northeast

368 (10.3)

438 (10.7)

597 (10.0)

859 (11.4)

1390 (12.4)

3652 (11.3)

North Central

1070 (30.1)

1253 (30.6)

1977 (33.1)

2627 (34.9)

4069 (36.3)

10,996 (34.0)

South

1632 (45.8)

1737 (42.4)

2438 (40.8)

2903 (38.6)

4029 (36.0)

12,739 (39.4)

West

459 (12.9)

643 (15.7)

914 (15.3)

1094 (14.5)

1659 (14.8)

4769 (14.7)

31 (0.9)

22 (0.5)

47 (0.8)

46 (0.6)

59 (0.5)

205 (0.6)

719 (20.2)

778 (19.0)

1149 (19.2)

1284 (17.1)

1723 (15.4)

5653 (17.5)

2739 (76.9)

3200 (78.2)

4645 (77.8)

6033 (80.1)

9177 (81.9)

25,794 (79.7)

102 (2.9)

115 (2.8)

179 (3.0)

212 (2.8)

306 (2.7)

Unknown Health plan type, N (%) Capitateda Noncapitated/fee for serviceb Unknown

914 (2.8)

Capitated plans include HMO and capitated POS. Noncapitated plans include PPO, noncapitated POS, basic medical, comprehensive, and consumer-driven healthcare plans.

POS indicates point of service; PPO, preferred provider organization; SD, standard deviation. a

b

patient pharmacy costs. The all-cause and diabetes-related costs before and after the index claim were reported separately. The diabetes-related costs were defined as the paid amount (health plan and payer portions) on claims with a primary diagnosis of type 2 diabetes in any setting of care. All costs were adjusted to 2011 US dollars using the medical component of the Consumer Price Index.

This was a descriptive study and, as such, standard descriptive tests were used, where appropriate, to identify significant differences across the MPR categories; Fisherâ&#x20AC;&#x2122;s exact tests were used for comparing the means between the cohorts, and chi-square tests were used for tests of proportions. The cohort demographics, resource

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utilization before and after the index claim, and the expenditures were compared across the MPR categories.

Results Patient Demographics A total of 32,361 patients met the study criteria. The average patient age was 59.1 years (standard deviation [SD], 11.6) years, and 52.4% of the patients were male.

Of the sample, 97.1% had a capitated, noncapitated, or fee-for-service health plan. As shown in Table 1, the MPR does not appear to differ by region or plan type; however, the MPR does appear to differ by age, with the highest MPR among patients aged 55 to 64 years.

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Table 2 B aseline Clinical Characteristics of Study Participants Medication possession ratio 0-0.20 0.21-0.40 0.41-0.60 0.61-0.80 0.81-1.00 Total Patient baseline characteristics (N = 3560) (N = 4093) (N = 5973) (N = 7529) (N = 11,206) (N = 32,361) Charlson/Deyo Comorbidity Index, mean (SD)

2.3 (2.0)

2.0 (1.8)

2.0 (1.7)

2.0 (1.7)

2.0 (1.7)

2.0 (1.7)

Eye conditions (diabetic retinopathy and macular edema)

208 (5.8)

299 (7.3)

498 (8.3)

634 (8.4)

975 (8.7)

2614 (8.1)

Diabetic neuropathy

538 (15.1)

551 (13.5)

865 (14.5)

1131 (15.0)

1682 (15.0)

4767 (14.7)

Amputation and ulceration

118 (3.3)

155 (3.8)

193 (3.2)

243 (3.2)

358 (3.2)

1067 (3.3)

Renal disease

584 (16.4)

570 (13.9)

785 (13.1)

1000 (13.3)

1510 (13.5)

4449 (13.7)

Myocardial infarction

115 (3.2)

113 (2.8)

120 (2.0)

152 (2.0)

233 (2.1)

733 (2.3)

Ischemic heart disease

766 (21.5)

780 (19.1)

1084 (18.1)

1501 (19.9)

2298 (20.5)

6429 (19.9)

Congestive heart failure

309 (8.7)

346 (8.5)

435 (7.3)

582 (7.7)

809 (7.2)

2481 (7.7)

Peripheral vascular disease

232 (6.5)

224 (5.5)

341 (5.7)

453 (6.0)

599 (5.3)

1849 (5.7)

Cerebrovascular disease

338 (9.5)

353 (8.6)

427 (7.1)

560 (7.4)

816 (7.3)

2494 (7.7)

1700 (47.8)

1693 (41.4)

2424 (40.6)

3030 (40.2)

4398 (39.2)

13,245 (40.9)

177 (5.0)

170 (4.2)

211 (3.5)

254 (3.4)

329 (2.9)

1141 (3.5)

1110 (31.2)

1177 (28.8)

1632 (27.3)

2036 (27.0)

3028 (27.0)

8983 (27.8)

Depression

236 (6.6)

211 (5.2)

299 (5.0)

387 (5.1)

455 (4.1)

1588 (4.9)

Obesity

271 (7.6)

208 (5.1)

317 (5.3)

363 (4.8)

480 (4.3)

1639 (5.1)

Microvascular complications, N (%)

Macrovascular complications, N (%)

Other comorbidities, N (%) Hypertension Anxiety Dyslipidemia

Hypoglycemia

245 (6.9)

262 (6.4)

350 (5.9)

406 (5.4)

Hyperglycemia

3359 (94.4)

3719 (90.9)

5388 (90.2)

6718 (89.2)

10,157 (90.6)

29,341 (90.7)

551 (4.9)

1814 (5.6)

Outpatient medications of interest, N (%) Biguanides (metformin)

2036 (57.2)

2169 (53.0)

3248 (54.4)

4045 (53.7)

6254 (55.8)

17,752 (54.9)

Sulfonylureas

1709 (48.0)

1983 (48.4)

2840 (47.5)

3635 (48.3)

5620 (50.2)

15,787 (48.8)

Meglitinides

158 (4.4)

224 (5.5)

315 (5.3)

428 (5.7)

625 (5.6)

1750 (5.4)

1012 (28.4)

1257 (30.7)

1878 (31.4)

2357 (31.3)

3543 (31.6)

10,047 (31.0)

32 (0.9)

56 (1.4)

66 (1.1)

89 (1.2)

149 (1.3)

392 (1.2)

Fixed-dose therapies

606 (1.07)

771 (18.8)

1052 (17.6)

1238 (16.4)

1920 (17.1)

5587 (17.3)

Antihyperlipidemics

2209 (62.1)

2584 (63.1)

3929 (65.8)

5210 (69.2)

8300 (74.1)

22,232 (68.7)

Antihypertensives

2688 (75.5)

3066 (74.9)

4583 (76.7)

5968 (79.3)

9337 (83.3)

25,642 (79.2)

980 (27.5)

1064 (26.0)

1559 (26.1)

2100 (27.9)

3106 (27.7)

8809 (27.2)

Thiazolidinediones Alpha-glucosidase inhibitors

Antidepressants Antiobesity medications

9 (0.3)

13 (0.3)

14 (0.2)

24 (0.3)

32 (0.3)

92 (0.3)

Antiemetics/antinausea medications

345 (9.7)

297 (7.3)

398 (6.7)

484 (6.4)

705 (6.3)

2229 (6.9)

Exenatide

452 (12.7)

549 (13.4)

878 (14.7)

1243 (16.5)

2052 (18.3)

5174 (16.0)

Liraglutide

21 (0.6)

23 (0.6)

42 (0.7)

58 (0.8)

88 (0.8)

232 (0.7)

SD indicates standard deviation.

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Clinical Characteristics Overall, the average sample MPR was 0.63 (SD, 0.29).

Table 2 summarizes the baseline clinical characteristics of the study population, stratified by MPR. The baseline Charlson/Deyo comorbidity score was 2.0 (SD, 1.7).

The most common comorbidities included hypertension (40.9%), dyslipidemia (27.8%), ischemic heart disease (19.9%), diabetic neuropathy (14.7%), and renal disease (15.9%); 5.1% of patients had a claim with an ICD-9-CM code for obesity. The patients frequently continued to fill oral antidiabetes medication prescriptions after initiating an insulin pen, with the most common being biguanides (54.9%) and sulfonyl­ ureas (48.8%).

Healthcare Costs The patients’ expenditures before and after the index claim were analyzed by MPR quintiles, wherein patients were stratified from least adherent (MPR, 0-0.20) to most adherent (MPR, 0.81-1.00). Table 3 summarizes the preindex annual healthcare expenditures of the study patients.

The mean preindex all-cause annual per-patient expenditures totalled $19,612 (SD, $40,571). The mean preindex diabetes-related annual per-patient expenditures totaled $2866 (SD, $5187). The preindex outpatient annual per-patient pharmacy costs were higher for the most adherent patients compared with the least adherent patients ($5683 vs $3852, respectively); the outpatient pharmacy costs also accounted for a larger proportion (31%) of the preindex total costs among the most adherent patients versus the least adherent patients (14%).

In the preindex period, the mean all-cause annual per-patient expenditures in the least adherent group were $27,707 (SD, $53,270), whereas the mean all-cause expenditures were $18,068 (SD, $38,504) in the most adherent group, or 1.53 times (P <.001) higher in the least adherent subgroup.

Table 4 summarizes the postindex annual per-patient healthcare expenditures. The mean all-cause annual per-patient expenditures for insulin pen users during the study period were $24,680 (SD, $44,005). The mean diabetes-related annual per-patient expenditures totaled $4952 (SD, $5209) and significantly increased after the index for all MPR groups, except the least adherent. For the least adherent group, we observed that the inpatient costs were 29% of the total all-cause expenditures versus 19% of the total all-cause expenditures for the most adherent group, which are likely driven by differences in the proportion of patients with an inpatient stay (37.3% vs 25.3%; P <.001).

The postindex outpatient annual per-patient pharmacy costs were higher for the most adherent patients than for the least adherent patients ($10,174 vs $5395, re-

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spectively; P <.001); the outpatient pharmacy costs also represented a larger proportion of the total postindex healthcare costs among the most adherent patients (43%) compared with the least adherent patients (21%).

In the postindex period, the total all-cause annual per-patient expenditures were 9.4% (P = .007) lower for the most adherent group ($23,839; SD, $33,617) than for the least adherent group ($26,310; SD, $49,026).

Discussion This study evaluated the relationship of insulin adherence to healthcare costs for a population of patients with type 2 diabetes using an insulin pen. Poor adherence is of particular concern in patients with type 2 diabetes, because previous studies have demonstrated that improved adherence to insulin therapy may substantially reduce the direct and indirect medical costs of type 2 diabetes for these patients.22,23 Poor adherence not only increases the risk for poor diabetes-related clinical outcomes, but it may also heighten the likelihood of concomitant renal and cardiovascular damage.24 In our analysis, patients with type 2 diabetes in the lowest quintile of adherence (by MPR) had total healthcare expenditures of >$26,000 annually compared with <$24,000 in the most adherent quintile, nearly a 10% difference that is highly statistically significant. These differences in total expenditures remain, despite the finding that outpatient pharmacy–related costs in the most adherent subgroup were much higher than for the least adherent quintile (>$10,000 vs ~$5400, respectively). These relationships strongly suggest benefits of improved adherence to prescribed medical therapies in the population with type 2 diabetes.

A systematic review of the literature on adherence and persistence of pharmacotherapeutic diabetes management found that patients frequently fail to comply with lifestyle management plans and treatment for diabetes, including insulin, noninsulin injectables, and oral hypoglycemic agents.6 The reasons for poor adherence are multifactorial, including communication between patient and provider, inadequate patient knowledge about antidiabetes medications, complex treatment regimens and their required follow-up, and insulin (and needle) resistance.25-28 In addition to being more user-­ friendly and convenient, insulin pens offer improved dose accuracy; superior portability; and easier, less painful injections than vial and syringe methods.29-31 The burden of poorly managed type 2 diabetes includes costs directly associated with type 2 diabetes as well as related conditions that are associated with poorly managed type 2 diabetes. As part of a large survey of US Medicare beneficiaries with self-reported diabetes, Stuart and colleagues found that greater medication adherence

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Table 3 P reindex Annual Healthcare Expenditures Per Patient Medication possession ratio 0.0-0.20 0.21-0.40 0.41-0.60 0.61-0.80 0.81-1.00 Total Healthcare (N = 3560) (N = 4093) (N = 5973) (N = 7529) (N = 11,206) (N = 32,361) expenditures Mean (SD), $ Mean (SD), $ Mean (SD), $ Mean (SD), $ Mean (SD), $ Mean (SD), $ All-cause expenditures Inpatient admissions

13,424 (42,333)

8776 (30,953)

6742 (25,515)

6553 (28,717)

5608 (31,808)

7298 (31,403)

Emergency department visits

491 (1553)

391 (1328)

315 (1131)

308 (1281)

269 (1767)

327 (1480)

Outpatient office visits

975 (954)

903 (938)

877 (784)

890 (843)

906 (804)

904 (845)

Primary care physician

477 (508)

435 (449)

449 (481)

442 (460)

461 (476)

453 (474)

68 (168)

78 (181)

75 (169)

75 (172)

80 (174)

76 (173)

Endocrinologist Nurse practitioner Other physicians

6 (48)

6 (51)

6 (52)

7 (51)

7 (52)

6 (51)

360 (585)

316 (661)

289 (458)

298 (475)

298 (477)

305 (513)

Outpatient laboratory and radiology Laboratory services

789 (2118)

654 (1802)

569 (1542)

538 (1236)

520 (1384)

580 (1539)

Radiology services

1407 (5965)

809 (2376)

854 (3325)

806 (3120)

727 (2337)

854 (3296)

Other outpatient services

6769 (17,813)

5531 (18,502)

4803 (18,461)

4375 (11,697)

4354 (13,340)

4857 (15,334)

Outpatient prescriptions (pharmacy)

3852 (4859)

3924 (6259)

4331 (8013)

4755 (4560)

5683 (5062)

4793 (5798)

27,707 (53,270)

20,989 (43,392)

18,491 (38,161)

18,225 (36,192)

18,068 (38,504)

19,612 (40,571)

672 (7364)

408 (4605)

420 (5453)

265 (2791)

271 (3907)

359 (4609)

Emergency department visits

45 (264)

42 (337)

26 (192)

25 (229)

19 (160)

27 (224)

Outpatient office visits

282 (264)

310 (306)

318 (280)

325 (296)

339 (296)

322 (292)

Primary care doctor

172 (204)

184 (223)

193 (227)

194 (225)

206 (237)

194 (227)

60 (154)

73 (171)

70 (161)

71 (164)

76 (168)

71 (165)

2 (25)

3 (30)

3 (33)

3 (35)

4 (38)

3 (34)

31 (111)

31 (115)

33 (110)

34 (120)

33 (113)

33 (114)

Total expenditures

Diabetes-related expenditures Inpatient admissions

Endocrinologist Nurse practitioner Other physicians

Outpatient laboratory and radiology Laboratory services

135 (272)

140 (282)

140 (273)

135 (263)

139 (261)

138 (268)

Radiology services

11 (112)

7 (62)

7 (73)

7 (88)

6 (67)

7 (79)

Other outpatient services

272 (1446)

275 (1427)

256 (1027)

289 (1574)

254 (852)

267 (1229)

Outpatient prescriptions

987 (1179)

1233 (1329)

1523 (1521)

1778 (1669)

2268 (1946)

1745 (1721)

2405 (7632)

2415 (5113)

2690 (5907)

2825 (3778)

3298 (4595)

2866 (5187)

Total expenditures

SD indicates standard deviation.

was significantly associated with lower medical costs and a reduced risk for hospitalization; each additional anti足 diabetes drug prescription was associated with a net $71 decrease in Medicare spending, which incorporates the cost of the prescription.32 These findings are substantively similar to our analysis, albeit in a more aged patient

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population (Medicare beneficiaries) and using older data (1997-2004).

According to a study conducted in 2012 by the American Diabetes Association examining the economic burden of diabetes care, the most influential factors in driving costs stem from the inpatient setting, from increased

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hospitalization rates and longer average lengths of stay.1 Together, these 2 factors accounted for more than 40% of the medical cost of diabetes.1 In our current analysis, the presence and length of inpatient stays were significant cost-drivers. The patients in the least adherent quintile had an average inpatient admission cost of $7543, which was $3058 greater than the cost in the most adherent

quintile ($4485); the patients in the most expensive quintile (MPR, 21-40) had an inpatient cost ($8674) that was nearly twice that of the most adherent quintile.

According to research by the National Institute of Diabetes and Digestive and Kidney Diseases, each percentage point reduction in HbA1c reduced the risk for microvascular complications by 40%.33 In another study, 78% of

Table 4 P ostindex Annual Healthcare Expenditures Per Patient Medication possession ratio 0.0-0.20 0.21-0.40 0.41-0.60 0.61-0.80 0.81-1.00 Total Healthcare (N = 3560) (N = 4093) (N = 5973) (N = 7529) (N = 11,206) (N = 32,361) expenditures Mean (SD), $ Mean (SD), $ Mean (SD), $ Mean (SD), $ Mean (SD), $ Mean (SD), $ All-cause expenditures Inpatient admissions

7543 (27,815)

8674 (46,659)

7465 (38,569)

5889 (24,291)

4485 (21,542)

6228 (30,581)

Emergency department visits

548 (2880)

432 (1494)

427 (1740)

369 (1509)

315 (1223)

389 (1675)

Outpatient office visits

1138 (1073)

1091 (932)

1109 (913)

1156 (997)

1158 (875)

1138 (942)

Primary care physician

528 (569)

506 (508)

526 (522)

537 (525)

548 (527)

534 (528)

80 (178)

93 (194)

99 (199)

105 (214)

118 (231)

104 (212)

8 (54)

7 (50)

8 (56)

11 (80)

9 (63)

9 (64)

438 (689)

395 (618)

389 (583)

407 (598)

402 (556)

404 (595)

Endocrinologist Nurse practitioner Other physicians

Outpatient laboratory and radiology Laboratory services

901 (2694)

781 (2615)

719 (2233)

685 (1933)

645 (1867)

713 (2160)

Radiology services

1576 (6706)

1232 (5035)

1099 (4123)

1108 (4907)

978 (3543)

1129 (4612)

Other outpatient services

9208 (27,778)

7792 (25,265)

7236 (20,182)

6695 (18,253)

Outpatient prescriptions

6084 (17,264)

5395 (7509)

6017 (7130)

6913 (7144)

8303 (5798)

26,310 (49,026)

26,019 (60,894)

24,968 (50,935)

24,206 (37,794)

23,839 (33,617)

24,680 (44,005)

274 (4335)

247 (3540)

281 (3162)

231 (3627)

161 (3079)

223 (3441)

Emergency department visits

22 (184)

20 (160)

22 (166)

22 (222)

18 (315)

20 (240)

Outpatient office visits

308 (286)

341 (290)

367 (311)

394 (329)

414 (324)

380 (317)

Primary care physician

182 (225)

190 (226)

203 (235)

216 (244)

227 (257)

210 (243)

72 (166)

86 (183)

92 (185)

99 (205)

111 (212)

97 (198)

3 (32)

3 (35)

4 (43)

5 (48)

5 (49)

5 (44)

33 (105)

38 (129)

42 (130)

45 (137)

45 (138)

42 (132)

160 (284)

153 (322)

Total expenditures

10,174 (6108)

6998 (20,552) 8085 (6775)

Diabetes-related expenditures Inpatient admissions

Endocrinologist Nurse practitioner Other physicians

Outpatient laboratory and radiology Laboratory services

134 (361)

142 (303)

151 (269)

160 (397)

Radiology services

6 (52)

9 (98)

10 (108)

8 (84)

9 (100)

9 (93)

Other outpatient services

441 (2801)

391 (1224)

461 (1652)

523 (2270)

537 (3123)

491 (2477)

Outpatient prescriptions

1449 (1235)

2154 (1307)

2932 (1499)

3824 (1837)

5237 (2548)

3676 (2371)

Total expenditures

2634 (5830)

3304 (4144)

4224 (4099)

5162 (4885)

6536 (5549)

4952 (5209)

SD indicates standard deviation.

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diabetes-related inpatient costs, 47% of physician office visit costs, 82% of emergency department visit costs, and 52% of hospital outpatient costs were attributed to a combination of only a few diabetes-related medical and cardiovascular conditions.1 Similarly, in a 2011 review, Asche and colleagues reported that diabetic patients with an MPR of <80% have a 2.5 times greater risk for hospitalization related to diabetes than patients with an MPR of >80% (odds ratio, 2.53; 95% confidence interval, 1.384.64), a finding mirrored in this current analysis.34,35

Limitations This analysis is subject to limitations inherent in the data source. First, it does not include socioeconomic status, anthropometric information, race or ethnicity, and mortality information. The data source also lacked data on clinical characteristics, such as HbA1c levels, body weight, and body mass index or obesity, all of which may impact diabetes management and healthcare costs. Likewise, hypoglycemia during a hospitalization may have contributed to the discontinuation of insulin and could not be accounted for as a result of ICD-9 coding limitations. Economic factors, such as barriers to obtaining pharmacy benefits, were also not accounted for.

The data for this study came mainly from large US employers and health plans, and therefore may not be generalizable to patients covered by other types of health plans, such as those with no insurance coverage or patients who are covered through the Veterans Affairs.

Finally, our observational study design does not allow any causal inferences to be made regarding our findings; this study is not designed to describe a direct causal relationship between insulin MPR and healthcare costs. It is instead intended to present descriptive analyses of insulin pen adherence and the potential association with healthcare costs. The presence of differences in preindex costs for patients with higher or lower insulin pen adherence underlies the complexity of the relationship between diabetes management and healthcare costs.

Conclusions This study adds to a growing body of literature describing the burden of poor management of type 2 diabetes, including poor insulin adherence. Our study results are consistent with the published literature in describing the benefits of better insulin adherence in terms of healthcare costs. As expected, increased adherence was associated with increased outpatient pharmacy costs; previous research has demonstrated that the increased costs associated with increased adherence were more than offset by associated reductions in other medical and pharmacy costs.32 The average sample MPR for our study population

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was 0.63 (SD, 0.29), indicating that the average adherence to insulin was still relatively poor and continues to be a challenge for the successful management of diabetes.

A plausible goal for MPR is at least 0.8, which was obtained by approximately 33% of patients in this analysis.

More research is needed to identify specific characteristics of better adherence as well as strategies or technologies that can lead to improved adherence among patients with type 2 diabetes. Further research should focus on the development of adherence measures that capture the effects of human and economic factors that can influence medication adherence. Furthermore, future analysis should focus on the interplay among insulin pen adherence and other antihyperglycemic therapies; this descriptive analysis focuses only on insulin pen adherence. â&#x2013; Funding Source This study was funded by Becton Dickinson.

Author Disclosure Statement Dr Bonafede is an employee of Truven Health Analytics, which was contracted by Becton Dickinson to conduct this study; Ms Chandran is, Ms Nigam was, and Ms Saltiel-Berzin is an employee of Becton Dickinson; Dr Hirsch is an employee of and holds stocks in Becton Dickinson, as well as in Merck; Ms Lahue is an employee of and holds stocks in Becton Dickinson.

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33. Centers for Disease Control and Prevention. National diabetes fact sheet: national estimates and general information on diabetes and prediabetes in the United States, 2011. 2011. www.cdc.gov/diabetes/pubs/pdf/ndfs_2011.pdf. Accessed April 13, 2015.

34. Asche C, LaFleur J, Conner C. A review of diabetes treatment adherence and the association with clinical and economic outcomes. Clin Ther. 2011;33: 74-109.

35. Lau DT, Nau DP. Oral antihyperglycemic medication nonadherence and subsequent hospitalization among individuals with type 2 diabetes. Diabetes Care. 2004;27:2149-2153.

STAKEHOLDER PERSPECTIVE

Adherence to Antihyperglycemic Treatment Regimen Also Reduces Overall Costs

By Quang T. Nguyen, DO, FACP, FACE, FTOS Medical Director, Las Vegas Endocrinology; Clinical Associate Professor, Clinical Education, Arizona College of Osteopathic Medicine; Adjunct Associate Professor of Endocrinology, Touro University Nevada

There are currently 14 classes of antihyperglycemic medications available for treating type 2 diabetes.1 Despite the extensive and diverse treatment options, more than 50% of patients with type 2 diabetes are still not achieving glycemic goals of hemoglobin (Hb) A1c levels <7%,2-5 as recommended by the American Diabetes Association and the American Association of Clinical Endocrinologists (AACE). The reasons for the failure to achieve glycemic control are multifactorial; however, medication nonadherence is one major issue frequently encountered in this population.6 In patients receiving oral medications for glycemic control, the rate of adherence has been reported to be as low as 65%.7 The adherence rate for patients receiving insulin is even lower,

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ranging from 26% to 52% in the year after the initiation of basal insulin, and 19% to 42% for bolus insulin.8,9 PATIENTS/PROVIDERS: Glycemic control in patients with type 2 diabetes is important to prevent long-term micro- and macrovascular complications, especially when the control is achieved early in the disease process.1,10 The recently updated “AACE/ACE Comprehensive Diabetes Management Algorithm 2015” recognized that there is a continuum of risk for poor health outcomes in the progression from normal glucose tolerance to overt type 2 diabetes.5 Early interventions, combining lifestyle modifications, weight-loss control, and early use of antihyperglycemic agents is recommended for all at-risk patients, especially those who are over-

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STAKEHOLDER PERSPECTIVE Continued weight or obese, or in patients with prediabetes.

Because diabetes is a progressive disease, most patients will require pharmacologic therapy that will need to be intensified over time. The success of the treatment regimen depends on the patient’s adherence to the recommended therapy. One study demonstrated an inverse relationship between prescribed oral antihyperglycemic drugs and HbA1c levels: with each 10% increase in adherence rate, a decrease of 0.1% in HbA1c was observed.11 The common reasons for medical nonadherence include fear of treatment side effects (weight gain, hypoglycemia), needle anxiety, complexity of the treatment regimen, and costs or formulary issues.12-14 The emergence of the latest 3 classes of drugs—­ glucagon-like peptide (GLP)-1 receptor agonists; ­dipeptidyl peptidase (DPP)-4 inhibitors; and sodium-­ glucose cotransporter 2 (SGLT2) inhibitors—offers treatment options that may alleviate the fear of hypoglycemia and weight gain that initially plagued the older diabetes drugs.

These 3 classes have low hypoglycemic risks, and the GLP-1 receptor agonists and SGLT2 inhibitors can promote weight-loss effects when used alone or in combination.15 The SGLT2 and DPP-4 inhibitors are once-daily oral medications, and are available in combination with metformin to decrease pill burden. The GLP-1 receptor agonists are available as injection pens, with treatment frequency ranging from twice-daily to weekly injections.

The use of insulin pens over syringes may also improve the adherence rate.13 In the current retrospective claims database analysis, Chandran and colleagues demonstrated a significant, nearly 10% difference in total healthcare expenditures (>$26,000 vs <$24,000) between the lowest adherence quintile and the highest adherence quintile in patients using insulin pens.9 This relationship remains despite the findings that outpatient pharmacy costs in the most adherent subgroup were higher than in the least adherent quintile.9 These findings suggest the benefits of improved glycemic control and lower complication rates with improved adherence to prescribed medical therapies.

PAYERS: The rates of nonadherence to type 2 diabetes treatments are similar to the corresponding rates for other chronic diseases.16,17 Advances in delivering and monitoring devices, combination therapies, and

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more convenient treatment frequencies are new strategies that have emerged only within the past 3 or 4 years. The benefits of these interventions are yet to be fully appreciated.

Chandran and colleagues demonstrated an important concept in their study, showing that although the patients with the greatest insulin adherence rate had a higher overall outpatient pharmacy cost compared with patients with the lowest insulin adherence rate, the total healthcare expenditures for the highest adherence group were significantly lower.9 ■ 1. American Diabetes Association. Standards of medical care in diabetes­­ —2015. Diabetes Care. 2015;38(suppl 1):S1-S93.

2. Ford ES. Trends in the control of risk factors for cardiovascular disease among adults with diagnosed diabetes: findings from the National Health and Nutrition Examination Survey 1999-2008. J Diabetes. 2011;3:337-347.

3. Ali MK, Bullard KM, Saaddine JB, et al. Achievement of goals in U.S. diabetes care, 1999-2010. N Engl J Med. 2013;368:1613-1624.

4. National Committee for Quality Assurance. Improving quality and patient experience: the state of healthcare quality 2013. www.ncqa.org/Portals/0/News room/SOHC/2013/SOHC-web_version_report.pdf. Accessed May 7, 2015.

5. Garber AJ, Abrahamson MJ, Barzilay JI, et al. AACE/ACE comprehensive diabetes management algorithm 2015. Endocr Pract. 2015;21:438-447.

6. Kurtz SMS. Adherence to diabetes regimen: empirical status and clinical applications. Diabetes Educ. 1990;16:50-56.

7. Rubin RR. Adherence to pharmacologic therapy in patients with type 2 diabetes mellitus. Am J Med. 2005;118(suppl 5A):27S-34S. 8. Xie L, Zhou S, Wei W, et al. Does pen help? A real-world outcomes study of switching from vial to disposable pen among insulin glargine-treated patients with type 2 diabetes mellitus. Diabetes Technol Ther. 2013;15:230-236.

9. Chandran A, Bonafede MK, Nigam S, et al. Adherence to insulin pen therapy is associated with reduction in healthcare costs among patients with type 2 diabetes mellitus. Am Health Drug Benefits. 2015;8:148-158.

10. Inzucchi SE, Bergenstal RM, Buse JB, et al. Management of hyperglycemia in type 2 diabetes, 2015: a patient-centered approach: update to a position statement of the American Diabetes Association and the European Association for the Study of Diabetes. Diabetes Care. 2015;38:140-149.

11. Rozenfeld Y, Hunt JS, Plauschinat C, Wong KS. Oral antidiabetic medication adherence and glycemic control in managed care. Am J Manag Care.

2008;14:71-75.

12. Tan AM, Muthusamy L, Ng CC, et al. Initiation of insulin for type 2 diabetes mellitus patients: what are the issues? A qualitative study. Singapore Med J. 2011;52:801-809.

13. Hauber AB, Mohamed AF, Johnson FR, Falvey H. Treatment preferences and medication adherence of people with type 2 diabetes using oral glucose-­ lowering agents. Diabet Med. 2009;26:416-424.

14. Davis SN, Wei W, Garg S. Clinical impact of initiating insulin glargine therapy with disposable pen versus vial in patients with type 2 diabetes mellitus in a managed care setting. Endocr Pract. 2011;17:845-852.

15. Fakhoury WK, Lereun C, Wright D. A meta-analysis of placebo-controlled clinical trials assessing the efficacy and safety of incretin-based medications in patients with type 2 diabetes. Pharmacology. 2010;86:44-57.

16. Briesacher BA, Andrade SE, Fouayzi H, et al. Comparisons of drug adherence rates among patients with seven different medical conditions. Pharmacotherapy. 2008;28:437-443.

17. Mitigating the burden of type 2 diabetes: challenges and opportunities. Am Health Drug Benefits. 2015;8(suppl 1):S1-S23.

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Confirming Diagnoses and Identifying Biomarkers Linked to Targeted Treatments with the bioT3 Approach An Interview with Ralph V. Boccia, MD, FACP, of Georgetown University

T

he current generation of oncologists has witnessed great advances in our understanding of tumor biology and biomarkers linked to treatments. Those advances started with research, but disseminating this information can be difficult given the myriad of obstacles in adoption to practice. The science behind these advances is fascinating and excites those in medicine with the possibility of providing meaningful, life-altering care to patients. But still there exists the reality of the vetting of each new discovery, starting with niche use among the early users, before it gets adopted more broadly.

With the advent of molecular medicine, we have novel options to detect and identify genetic mutations and other biomarkers to assist in selecting the appropriate therapy to target cancer cells. Combining this knowledge with guidelines of how to treat based on tumor type can only serve to improve patient outcomes.

There are many options in selecting tests to gather pertinent information related to a patient’s genetic pro-

file and the biology of their tumor. In this current installment of Interview with the Innovators, and with the intent to assist in the dissemination of impactful information, we focus on the bioT3 approach, which provides a molecular diagnosis for tumors with unclear diagnosis as well as compreRalph V. Boccia, hensive biomarker profiling, includMD, FACP ing mutational analysis and protein expression markers to assist oncologists in selecting site-specific and targeted therapy options for patients with metastatic cancer. The publishers of PMO had the pleasure of meeting with Dr Ralph V. Boccia from the Center for Cancer and Blood Disorders and Clinical Associate Professor at Georgetown University who participated in the research for these products and has firsthand experience with them in the clinic. To view the live interview, please visit www.PersonalizedMedOnc. com/videolibrary.

PMO Genomic tools such as next-generation sequencing are not widely adopted in community practices for metastatic patients. In your experience, what are the barriers to adoption?

Dr Boccia The low uptake in the community is primarily due to the fact that the first wave of tools was developed to meet the needs of academia and don’t adequately address the needs of community practices. More specifically, when it comes to next-gen sequencing, research-focused oncologists are interested in understanding all mutations associated with a given tumor type,

even if no agents are currently available that can target the related pathways. Increasingly, there is interest among these academics in obtaining information across the entire genome in the hope of future actionability, and often in the context of their collaborations with research divisions of pharmaceutical companies.

In sharp contrast, treatment-focused oncologists are primarily interested in current actionability and thus interested in biomarkers linked to Food and Drug Administration (FDA)-approved drugs and late-stage clinical trial candidates. Further, they are focused on getting the information fast in a simple and easy-­ to-understand tumor-specific report at a reasonable cost. Therefore, the use will increase when the needs of community practices are more directly addressed.

PMO Can you discuss the strengths and weaknesses of the various next-gen sequencing tests to detect actionable biomarkers?

Dr Boccia is a founder and the Medical Director of The Center for Cancer and Blood Disorders. He is also Clinical Associate Professor of Medicine at Georgetown University, consulting Medical Director of the International Oncology Network (ION) Clinical Research Program, and Chairman of ION’s Medical Advisory Panel.

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Dr Boccia In terms of the first wave of tools developed for academia, there are 2 main approaches: 1) sequencing only, and 2) testing everything independent of tumor type. The strength of the “sequencing-only” approach is that it consumes very little tissue but, unfortunately, it is not a comprehensive platform. For some spe­cific biomarkers, IHC [immunohistochemistry] and FISH [fluorescence in situ hybridization] are the more appropriate platforms versus sequencing. IHC probes protein expression levels in the tumor, which cannot be performed with sequencing. This is relevant both for traditionally important biomarkers such as HER2, ER [estrogen receptor], and PR [progesterone receptor] expression, which are recognized to be important in breast cancer, as well as relatively new biomarkers such as programmed death-ligand 1 (PD-L1), which may have a growing clinical relevance in melanoma, lung cancer, and other solid tumors.

Sequencing also probes genetic rearrangements and amplifications in a manner that is inconsistent with approved targeted therapy labels and inclusion criteria of many clinical trials. Recent ASCO/CAP [American Society of Clinical Oncology/College of American Pathologists] guidelines for biomarker testing in lung cancer clearly state that ALK rearrangement testing

should be done by FISH, in line with the pivotal studies for crizotinib and the corresponding package insert.

Rearrangements, in principle, can also be probed by sequencing, but the cutoff criteria and the test specifics are not identical. Unlike academia, where the remaining tests can be done by in-house pathology, it is not pragmatic for a community oncologist to work with multiple testing facilities to obtain comprehensive biomarker information.

The “testing everything independent of tumor type” approach employs a very large number of biomarker tests.

The strength of this approach is that it is extremely comprehensive. However, when you run such a large number of biomarkers independent of the type of cancer, you end up with slower turnaround times, high costs, and significant tissue use, in conflict with the basic needs for a community oncology practice. In addition, many biomarkers are only relevant within specific tumor types, so this approach is not aligned with the clinical evidence behind many biomarkers. High-cost tests like this are better used as a last resort when a patient has exhausted all standard-of-care options.

PMO How common is the issue of unclear diagnosis in metastatic cancer?

Dr Boccia In clinical practice, patients can present

Different needs related to metasta/c disease management Different needs related to metastatic disease management Research-focused oncologists

Treatment-focused oncologists

• Research focused, and interested in clinical trial enrollment

• Focused on patient care

• Often specialize in specific cancers

• More often see all cancers, with specialization in select cases

• Interested in all targets, including those in the discovery stage

• Interested in targets with FDA-approved drug or late-stage clinical trials candidates

• Actionable now or in the future

• Actionable now

• Cost not usually a limiting factor

• Cost-focused (especially patient portion)

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bioT3 addresses needs for a broad bioT3 addresses needs for a broad group of metastatic group of patients metastatic patients Clear Diagnosis?

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Value proposition

• Help achieve definitive diagnosis of tumor type & subtype • Biomarkers linked to targeted treatments • Reimbursement ease • Logistical ease, minimal tissue use (low QNS) • Time: 7-10 days

with carcinomas for which we cannot identify their primary site—otherwise called carcinomas of unknown primary site. In addition, there are certain ambiguous presentations where patients appear to have a certain type of tumor; however, the overlap of the clinical presentation with potentially different types of cancer makes the initial diagnosis unclear.

Data would suggest that the combination of carcinomas of unknown primary site and the ambiguous presentations probably make up for around 100,000 patients newly diagnosed each year, which is ~15% of all newly diagnosed metastatic patients. So it’s no small number.

It is important for clinicians to identify the primary site, because the treatment that we render is dictated by where the tumor started, not where the tumor ends up. Accurate diagnosis of tumor type/subtype is necessary for selecting the proper site-specific chemotherapy and molecularly targeted therapies. It is important to note that molecularly targeted therapies are indicated for specific tumor types. For example, vemurafenib is FDA approved for metastatic melanoma patients harboring a BRAF V600E mutation, but it is not approved in metastatic colorectal cancer with the same mutation and may not be effective in this case. So under-

• Biomarkers linked to targeted treatments • Concise actionable panel • Lower cost • Lower rejection rates (QNS) • Tumor-specific reports • Time: 5-7 days

4

standing the biomarker profile in the context of tumor type is important.

PMO We understand that you have used bioT3 from bioTheranostics in your clinical practice. Can you share with us the type of patient for whom you use this approach, and how it compares to other offerings that you are familiar with?

Dr Boccia I’ve had the opportunity to work with bioTheranostics for a number of years, first in the research setting and now in clinical practice. bioT3 was not commercially available when I first started doing research with them as part of a consortium looking at carcinomas of unknown primary site. I currently use bioT3 in my everyday practice for metastatic patients with clear as well as unclear diagnoses, from initial treatment through resistance and recurrence.

The bioT3 offering combines tumor type diagnosis and comprehensive biomarker profiling for metastatic tumors. It is made up of 2 components, the first being CancerTYPE ID, a gene expression–based molecular tumor classifier. CancerTYPE ID is necessary when we’re looking to identify a primary tumor type, specifically if we’re confronted with a carcinoma of unknown primary site or potentially one of those ambiguous states

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Tumor specific panels designed to optimize cost, turn-around time, QNS Tumor-specific panels designed to optimize turnaround time, QNS rates, and actionability rates,cost, and actionability IHC/FISH tests

Next-Generation Sequencing panel (NGS) ABL1

EGFR

GNAS

KRAS

PTPN11

AKT

ERBB2

GNAQ

MET

RB1

ALK

ERBB4

HNF1A

MLH1

RET

APC

EZH2

HRAS

MPL

SMAD4

ATM

FBXW7

IDH1

NOTCH1

SMARCB1

BRAF

FGFR1

JAK2

NPM1

SMO

CDH1

FGFR2

JAK3

NRAS

SRC

CDKN2A

FGFR3

IDH2

PDGFRA

STK11

CSF1R

FLT3

KDR

PIK3CA

TP53

CTNNB1

GNA11

KIT

PTEN

NSCLC

CRC

Breast

Melanoma

ALK (FISH)

PTEN (FISH)

HER2 (IHC)

PD-L1 (IHC)

ROS1 (FISH)

HER2 (FISH)

Comprehensive panel ALK (FISH) C-MET (IHC) C-MET (FISH)

RET (FISH)

PTEN FISH)

PDL1 (IHC)

ER (IHC)

EGFR (IHC)

PR (IHC)

FGFR1 (FISH) HER2 (IHC) HER2 (FISH) RET (FISH) ROS1 (FISH)

PD-L1 (IHC)

VHL

PTEN (FISH)

• Concise list of FISH and IHC biomarkers for NSCLC, CRC, Breast, and Melanoma based on NCCN® recommended biomarkers and phase 2/3 clinical trials • In contrast, the comprehensive panel is designed to maximize “shots on goal”

where there is a differential diagnosis. An example of that might be metastatic squamous cell carcinoma in the lung that could be a primary bronchogenic squamous cell carcinoma in the lung, or it could be a primary head and neck squamous cell carcinoma metastatic to the lung. If unidentified using regular tools, CancerTYPE ID can help distinguish between these tumor types. Another example might be a patient who presents with abdominal carcinomatosis, and we don’t know if it’s a GI [gastroin­testinal] or a GU [genitourinary] primary. CancerTYPE ID can be useful for cases in which the tumor type is unknown, and also in cases where there is diagnostic ambiguity and several tumor type possibilities exist.

The second component is CancerTREATMENT NGS+, a comprehensive platform that includes next-­ generation sequencing, FISH, and IHC that lends us the opportunity to select therapies. The biomarkers tested by CancerTREATMENT NGS+ are based on National Comprehensive Cancer Network and ASCO guidelines and major phase 2 and phase 3 clinical trials, resulting in more concise panels and reports. This is in contrast to the complicated reports you receive when you do extensive next-generation sequencing that leave a lot of physicians in a position where they don’t understand where to go next.

2

PMO How do you view the strength of the clinical validation evidence for the CancerTYPE ID, and how does it compare with other gene expression tests?

Dr Boccia In comparison to other gene expression tests, CancerTYPE ID covers a significantly larger number of tumor types, 50 tumor types compared with 15 and 42. In addition, several studies have validated its accuracy and clinical utility. Specifically, the Mayo Clinic, University of California Los Angeles, and Massachusetts General Hospital have done a blinded study and documented the accuracy of CancerTYPE ID (Clin Cancer Res. 2012;­18:3952-3960). A head-to-head comparison of CancerTYPE ID versus IHC demonstrated that CancerTYPE ID was significantly better (J Mol Diagn. 2013; 15:263-269). A prospective study in patients with carcinomas of unknown primary site that we published in the Journal of Clinical Oncology showed a 37% improvement in overall survival in those patients profiled with this assay and then treated based on the tumor type identified compared with empiric standard-of-care chemotherapy (J Clin Oncol. 2013;31:217-223).

PMO For what types of patients do you see a role for CancerTYPE ID in clinical practice?

Dr Boccia We’ve used CancerTYPE ID in our clinical practice in a number of situations. When we get a pathology report back, the first thing we do is to look to see

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how they document where the tumor that they’re describing appears to have originated from. Oftentimes there is a long account of immunohistochemical stains describing what they conclude. But sometimes pathology reports have an inconclusive or ambiguous diagnosis from a histologic and immunohistochemical standpoint.

An example might be a patient with a suspected diagnosis of non–small cell lung cancer [NSCLC] based on clinical correlation, but the pathology report indicates that the tumor is TTF-1 [thyroid transcription factor-1] negative, whereas most lung cancers, but not all lung cancers, are TTF-1 positive. If we think it is NSCLC but can’t be absolutely certain, that would be a reason to use the CancerTYPE ID. Additionally, if the clinical presentation is atypical, or if there are multiple lesions at a distant point from any organ, and standard workup does not provide a definitive diagnosis, then CancerTYPE ID can be very helpful in these situations.

PMO Considering the second component of bioT3, for which patients do you see a role for CancerTREATMENT NGS+ in your clinical practice?

Dr Boccia We find CancerTREATMENT NGS+ to be helpful in several situations. The first would be at the time of diagnosis where we’re looking to profile that patient’s tumor and make sure that we have in fact identified actionable targets.

An example of that might be NSCLC, the nonsquamous variety, where we want to be sure that we have given the patient the best treatment options since there are several targeted therapies available based on the biomarker profile of the tumor. If, for instance, the tumor is EGFR, ALK-1, or ROS1 positive, that’s not a patient we want to be giving chemotherapy to at the outset, because randomized trials have clearly shown that the tyrosine kinase inhibitors offer the patient better response rates, better progression-free survival, and better overall survival. On the other hand, if these biomarkers are negative, then this patient is best suited for chemotherapy. So patients with a known diagnosis of metastatic NSCLC are candidates for CancerTREATMENT NGS+ in the up-front setting. CancerTREATMENT NGS+ is a great platform because it combines next-gen sequencing with FISH and IHC testing, which is important for NSCLC if you are looking for ALK rearrangements because ASCO/ CAP guidelines recommend that ALK testing be performed by FISH. If you’re looking for PD-L1 expression, the best way to assess this is through IHC. CancerTREATMENT NGS+ is also very useful for those metastatic cases in which several lines of therapy have been implemented and the disease progresses. A good example of that would be a breast cancer patient with ER+/PR+ tumor type; we would offer several lines

of endocrine therapy before moving on to chemotherapy. Once we’ve gotten beyond those first several lines of therapy and looking for additional actionable targets or clinical trial options, that would be a good time to use CancerTREATMENT NGS+ secondarily.

There are times when we would use the 2 components of bioT3 together. An example would be an unknown primary site, let’s say an ambiguous primary site or one that we thought might be lung. CancerTYPE ID would help us confirm this is an NSCLC, and that it is nonsquamous, to allow us to better understand whether there is an actionable target, specifically ALK, ROS1, RET, and EGFR. So combining them in this instance would be a perfect tool for us to set up a treatment program that we could carry through for many lines of therapy.

We’re at a point in this society where healthcare costs are clearly out of control.

The budget is unsustainable, and it’s important that all of us contribute to controlling costs the best we can.

PMO An important theme at ASCO 2014 is the importance of managing costs of cancer care, particularly for metastatic patients. How important is it to lower cost from the perspective of community practices, and how does bioT3 address this critical need?

Dr Boccia We’re at a point in this society where healthcare costs are clearly out of control. The budget is unsustainable, and it’s important that all of us contribute to controlling costs the best we can. There is ongoing payment reform, and so the whole system is changing in the next several years. What this means is that we’re going to be sharing risks with the carriers, as well as showing value and quality with our treatment selection. Accountable care organizations are forming and will recruit members, and all will share risk. The upside potential here is enormous to begin to control the cost of some of these more expensive tests and provide actionable answers for more effective therapy. In looking at Explanation of Benefits coming in from my patients for the testing we have ordered, I’m sometimes appalled. I’ve seen bills for profiling as high as $30,000, certainly $5000, $6000, $7000, and $8000. As a treatment-focused community physician, it is very important for me to obtain actionable information in a cost-effective manner, and I think the bioT3 approach takes this into account.

PMO Thank you very much for your time today, and our best wishes to you for continued success.

Dr Boccia Thank you, it was my pleasure. n

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