of
Precision
Stephen T. Parente, Ph.D., M.P.H., M.S.
Minnesota Insurance Industry ChairMedicine
of Health Finance
Governing Chair, Health Care Cost Institute
Director, Medical Industry Leadership Institute
Associate Dean, MBA Programs
Carlson School of Management
Department of Finance
sparente@umn.edu
WhatisaPrecisionMedicine?
Amedicalmodelthatproposesthecustomizationof
healthcarewithmedicaldecisions,practices,and/or
productsbeingtailoredtotheindividualpatient.In
thismodel,diagnostictestingisoftenemployedfor
selectingappropriateandoptimaltherapiesbasedon
thecontextofapatientsgeneticcontentorother
molecularorcellularanalysis.ToolsemployedinPM
canincludemoleculardiagnostics,imaging,and
analytics/software.(source:Timmerman,Luke(4February2013).
"WhatsinaName?ALot,WhenItComestoPrecisionMedicine".Xconomy.
WheredoesHealthEconomicsPlay?
JournalofEconomicPerspectivesStudy:
Setting:priceandhealthbenefitsof58anticancerdrugs
approvedbetween1995and2013
Conclusion:gainsinsurvivaltimeassociatedwithrecently
approvedanticancerdrugsaretypicallymeasuredinmonths,
notyears.
BUT:thecostofeachmonthoflifegainedthroughthenew
treatmentsiswayup.
Theinflationadjustedpricefornewanticancerdrugsrose10%ayearover
those18years,accordingtothestudy.
In1995,patientsandinsurerspaid$54,100(in2013dollars)forayearofextra
life.
By2005,thathadgoneupto$139,100ayear,andby2013itwas$207,000.
NIH/Industrysupportbasicscienceresearch
Basicscienceyieldsaninnovativematerialormissinglinkfor
therapeuticordiagnosticvalue
Newproductdevelopmentwithinafirm.
Prototypedeveloped
Prototypeusedforclinicaltrials
Ifprototypeproceedstohumantrials,costeffectivenessanalysis
commissioned.
SuccessfulhumantrialsleadingtoFDAapprovalcombinedwith
positivecosteffectivenessanalysisareusedtosolicitreimbursement
frompublicandprivateinsurers.
Technologyaddedtoreimbursementscheduleaftermedicaltechnology
reviewbyinternalinsurerauditors.Medicarereimbursementoftena
signalofpositivereimbursementdecision.
CostEffectivenessAnalysisStandards
NationalInstituteforClinicalExcellence(UK):Guidetothe
MethodsofTechnologyAppraisal(2004)(www.NICE.org.uk)
PharmaceuticalBenefitsAdvisoryCommittee(PBAC):
GuidelinesforthePharmaceuticalIndustryonPreparationof
SubmissionstothePharmaceuticalBenefitsAdvisory
Committee(2002)
WellPointPharmacyManagement,HealthTechnology
AssessmentGuidelines,DrugSubmissionGuidelinesforNew
Products,NewIndicationsandNewFormulations(2004)
(www.Wellpointrx.com)
WellPointPharmacyManagement,HealthTechnology
AssessmentGuidelines:DrugSubmissionGuidelinesforRe
EvaluationofProducts,IndicationsandFormulations(2004)
(www.Wellpointrx.com)
ThePrecisionMedicineMarket:
WhereHealthEconomicsGetsReal
Theprincipalroleofthehealtheconomistinthe
pharmaceuticalindustryistodevelopandrecommend
asustainableglobalunitpricingstrategy
Asustainablepricingstrategyisonethatisconsistent
withachievingandmaintainingreimbursementinkey
globalmarketsandmarketsegmentsataunitprice
thatisconsistentwithanacceptablemarketshareand
rateofreturnonresearchanddevelopment
expenditures
HealthEconomistsandtheirJamborees
Dossier Structure
TargetDiseaseClassification
Epidemiology
Treatmentpatterns,resourceutilizationandcosts
Productdescription
Comparatorproduct/proceduredescription(s)
Clinicalsummariesandmetaanalyses
Modeledcosteffectivenesscase
Modeledsystemimpactcase
Productclaims,monitoringandverification
Dossier Scope
Dossiermustidentifyandreportonallkeymarkets
andmarketsegmentsforcontentdescriptionand
analysis:
US(managedcare,VA,Medicaid,Medicare)
EuropeanUnion(UK,France,Italy,GermanySpain)
Canada
Australia
Japan
Developingcountries(Mexico,Brazil,India,China)
AndtheTargetAlwaysMoves
Overthebalanceoftheproductlifecyclethedossiermustbe
updatedtoreflectnotonlytheresultsofproductclaims
monitoringandvalidationbutalsochangesinthecompetitive
environmentforthemanufacturersproduct
Thedossiershouldsupportongoingdiseaseareaand
therapeuticclassreviews
Updateofclinicalsummariesandmetaanalyses
Reviewofcomparatorchoice
Reevaluationofmodeledcosteffectivenessandsystemimpactcase
fortheproduct
Revisionstoempiricallyevaluableproductimpactclaims
NICE Legacy
TheCochraneandCampbellCollaborations.
HealtheconomicsandtheQualityAdjustedLifeYear
(QALY)
TheNHSCentreforReviewsandDissemination
(UniversityofYork).
TheCochranecontrolledtrialsregister.
Fastelectronicsearchenginesaccessinglargedatabases.
SystematicReviewandmetaanalysis
NICE
Comprehensiveevidencebase
Expertinput
Patientandcarerinvolvement
Independentadvisorycommittees
Genuineconsultation
Regularreview
Openandtransparentprocess.
Methodologicalprinciplesgoverning
allNICEswork
Baserecommendationsonthebest
availableevidence.
Todeterminecosteffectiveness
usingtheQALY.
Tobeclearaboutscientificand
othervalues
Toallowcontestability.
Tobeseentobeandtobe
independentofgovernment,the
pharmaceuticalindustryandother
vestedinterests.
Probability
of rejection
x
XX
XX
0
10
20
30
40
50
3DisRequired
Derivedfromthebestavailableevidencesuchas
NICEguidanceandotherevidencesourcesaccredited
byNHSEvidence,theyaredevelopedindependently
byNICE,incollaborationwithNHSandsocialcare
professionals,theirpartnersandserviceusers,and
addressthreedimensionsofquality:clinical
effectiveness,patientsafetyandpatientexperience.
E
X
G
B
C
H
D
J
Y
L
AndClearResults:Thehealthgradient
Hi
Healthstate
Lo
Lo
Hi
Socialstatus
Thehealthgradient
Hi
Healthstate
Lo
Lo
Hi
Socialstatus
Thehealthgradient
Hi
Healthstate
Lo
Lo
Hi
Socialstatus
Summary
Therelargemarketopportunitiesfromprecisionmedicine.
Butwithopportunity,thereisrisk..
Theincreasinglyprescriptiverequirementsthatmanufacturers
meetgoldstandardevidentiaryandanalyticalcriteriain
formularysubmissionsandproductreevaluationshave
profoundimplicationsfortheprocessofproductdevelopment
andassessmentsofcomparativetreatmenteffects.
Manufacturersmustrecognizethatallclaimsarepotentially
discoverableandthataconsistentglobalapproachtoclinical
assessmentwillminimizeadverseassessmentsoffalseor
misleadingclaims.
Asfutureconsumers,noneofuswouldwantanythingless.