Evidence-Based Oncology
September/October 2013
Volume 19
Issue SP9

Melanoma: From Impossible to Treat to Poster Child for Targeted Therapies


An AJMC Panel Discussion

In September, Mark Fendrick, MD, co-editor-in-chief of The American Journal of Managed Care, led a discussion of experts about advances in the treatment of metastatic melanoma, which examined both the promise offered by new therapies and the issues surrounding cost, payment, and delivery. The text of their discussion has been edited for clarity, style, and length. To hear the full discussion, please visit Joining Dr Fendrick were:

Jeffrey Weber, MD, PhD, senior member of the H. Lee Moffitt Cancer Center and director, Donald A. Adam Comprehensive Melanoma Research Center, Tampa, Florida.

Antoni Ribas, MD, PhD, of the Johnson Comprehensive Cancer Center, University of California, Los Angeles.

Jennifer Malin, MD, PhD, manager and medical director of Oncology, Well-Point.

Frederick: To start, I’m going to call on you, Dr Weber. Why don’t we start with a therapeutic overview and perhaps a broader discussion of the unmet needs in our current therapeutic armamentarium?

Weber: There has been a tremendous amount of progress in cancer therapeutics in the melanoma field in the last 5 years. Melanoma has gone from being regarded by many oncologists as an impossible to treat and hopeless malignancy to a disease that one would argue is the poster child for new targeted and immunologic therapies, so we’ve come a huge distance in the last 5 years, and it has been very gratifying. That being said, there are major unmet needs in our field because while we are achieving good response rates with targeted therapy, prolonging survival with immunologic therapies, we still have a pretty narrow repertoire of drugs to use and they still have pretty serious toxicities, and we are a long way from curing a significant proportion of our patients. So, to me, the biggest unmet need is understanding essentially how to cure patients, and I use the word “cure” in the sense of having someone adoptive cell therapy, an area that both Dr Ribas and I are interested in, trying to figure out how to bring that into the mainstream is very difficult, and how to overcome resistance to the targeted drugs, because a lot of patients get great response with these targeted personalized drugs that impact on the signaling pathways for melanoma growth and proliferation, but almost all of them will eventually progress. We are trying to figure out how to overcome the resistance.

Ribas: I fully agree with everything you said because having seen this remarkable change in a short period of time with agents that have come from understanding biology, the melanoma biology or the immune biology of melanoma, and leading to rational drug development and to this remarkable benefit to patients, it has been something that has invigorated all of us, but we are still faced when we go to the clinic with many patients who are either not responding, responding for a short time and progressing, or having side effects. But, the process has gone so rapidly and based on things that we can rationalize and understand, that your point of saying we are shooting for a home run, we are trying to get durable responses in the majority of patients, I don’t think it is an unrealistic goal anymore in melanoma, when it was a completely unrealistic goal 5 years ago. Having said that, I would move on to the next point of the agenda, which would be these recent successes, and, what do they mean? Dr Weber has already pointed to the general theme of targeted therapies giving an initial response rate that tends to not be durable, and the appropriate immunotherapies interleukin-2, aldesleukin, or ipilimumab that are good for blocking antibodies, giving a much lower frequency of responses, but clinically very significant for the patients who respond because they can go on to have years of response and probably be cured.

Patients who were treated 2 to 5 years ago, some of them by Dr Weber, continue to respond and patients with T24 blocking antibodies, the longest one is now going for 12 years, a patient in my clinic continues to respond and we just see each other once a year. So the goal is there, but we need to make it more efficient for everyone. The particular agents that we will discuss and try to understand the cost-benefit ratio would be the B-RAF inhibitors, vemurafenib being the first one, and then the B-RAF that is called dabrafenib, which is a very recent approval. These are agents that when we select patients with the B-RAF mutation, which is around 50% of melanomas, we are close to guaranteed to have some kind of patient benefit.

Over 80% of the patients have some shrinkage of disease at some point over time, and that is shown in impressive particle plots with these agents, but the majority— not all of them, but the majority—will progress within a matter of months usually, and the median duration of response is around 6 to 7 months, although there are some patients from the Phase I trial of vemurafenib who are now going beyond 4 years and are continuing to respond, but that is the minority.

The benefit to patients is very rapid. These are targeted therapies that block the driver oncogene, which leads to cell cycle arrest and responses in the majority of patients, but then the majority of patients will progress. Around two-thirds of the progression mechanisms go through reactivation of the same pathway and a signal through an immediate downstream, a factor which is called MEK, which is a kinase under BRAF and them we have the MEK inhibitor trametinib that has been approved to use a single agent in B-RAF mutant melanoma. But that is not where we are going to be using it because by itself, trametinib is less effective in mutant melanoma and more toxic, so it is probably one of the only approvals by the FDA that we know from the start that we are not going to be using it the way the current label is written. You can use it in combination with the B-RAF inhibitor and you can use it in patients who progress on the B-RAF inhibitor because there is actually no activity there. But there is a lot of activity when you put it together, and that is something that Dr Weber has reported on, where it is one of the first examples that I would know in medicine where you have 2 effective drugs, that you put them together and they are not only more effective but they are less toxic when you keep them together, which should impact on the cost-benefit ratio because even though obviously 2 drugs are more expensive than 1, the side effects decrease and the benefits of the drugs is markedly improved and randomized trials are still ongoing, and that is why it is not in the label. It would suggest to me that in the near future I think most of us will agree that this will be a drug that is cost-effective.

Weber: I think everyone agrees with that, and I think the expectation certainly is that the Phase II study results … with those 2 drugs are going to show serious benefit and major prolongation of survival, but again we don’t have the data and they won’t be out probably for another year, but maybe circling back to the issue of the immunotherapy agents, I think everybody is impressed that both the PD-1 antibodies from BMS and Merck, those are nivolumab and lambrolizumab … and the drug which doesn’t have a real name, it is MPDL from Genentech which is a PLD-1 blocking antibody … everybody accepts that they have serious activity, good response rates in the realm of 30-plus-percent, and they appear to induce a significant number of long-term remissions; and whether they will overall prolong survival, that awaits the results of some ongoing Phase III studies, but they look awfully promising.

Fendrick: The optimism and the advances are very impressive. I would like to—for some of our audiences, Dr Weber, can you just let us know a little bit about whether all of these agents are IV or some of them orals like we’ve seen with biologics, and also comment just a little bit on frequency if there is any differentiation. Many of our audiences have seen, in other classes, great emergency of multiple agents, some of which are very similar, some of which work together, and are very, very intrigued, but we will talk about this later, about the combinations, because any time where the situations is where the sum is greater than the parts, as Dr Ribas alluded to and you confirmed, that is something always of great interest, not only to our clinicians but also to the folks on the managerial side.

Weber: The nice thing is that dabrafenib,trametinib, vemurafenib, and a lot of these drugs that are being developed are all oral, you take them once or twice a day, it makes it very easy for the doctor and for the patient, whereas interestingly virtually all of the immunologic agents that are in development are given intravenously. Ipilimumab, for example, is given every 3 weeks and to be honest, with ipilimumab, we haven’t settled on the optimal dose. There is a big trial of the standard approved dose of the 3 mg per kilogram given intravenously every 3 weeks versus 10. Ten may be better, and we will talk later about what implications that might have for the cost because it is not a cheap drug, and if it turns out that the FDA will now approve 10 instead of 3 (mg), are they going to triple the price? Nivolumab and lambrolizumab are given every 2 weeks.

Sometimes lambrolizumab is every 3 weeks, which it is not clear ultimately how often that will be given, but we are talking every 2 to 3 weeks in the veins which is not hugely convenient for the patient, but that is the way these drugs seem to have been effective, and it looks like the PD-1 blocking drugs or the PLD-1 drugs will have great promise; they are in Phase III studies.

I am optimistic that we will see positive outcomes. I should add that the excitement at ASCO was all about these drugs. Dr Ribas gave a great talk at this session, at the ASCO meeting in June in Chicago. I then gave another talk. I think that is where all the excitement was, and probably they saved the best for last because there was a combination trial of one of the PD-1 drugs nivolumab with the CTLA-4 blocking drug ipilimumab, and there someone commented that the waterfall plot, where you see in a graph the bars up or down indicating shrinkage or growth, looked like it was a targeted drug, it was so good. Toxicity, on the other hand, was not so trivial but that combination looked awfully impressive. Now, not only are we thinking about how do you combine the targeted drug, now you think about how to combine the immunologic drugs, so that is 5 more years of work at least to work that out, and that will be impressive.

Fendrick: Are most individuals now just getting orals, or are there individuals just getting IVs? Obviously you can imagine there is a strong preference from a patient perspective to avoid getting into the veins, as you say, Dr Weber.

Weber: I certainly would want to hear from Dr Ribas and others, but the key question that will be addressed in one of the world’s most complicated trials is, what is the best sequence of a targeted drug and an immunologic drug, and it is not just a (single) drug, it is what combination of targeted drugs and what combination of immunologic drugs, what should be the proper sequence? Should you give the targeted drug first, should you give the immunologic drug first? That actually isn’t just a major unmet need; that is a major unanswered question, and I think Dr Ribas is involved heavily through these cooperative groups trying to answer those questions, so I will defer to him.

Ribas: About the mode of therapy and the benefits, it is moving so fast, we are in situations where we have no data about how to recommend patients with the B-RAF mutant melanoma; should we start with a single agent or hopefully a or PDL-1 and hopefully in combination with ipilimumab? The delivery of the agent is based on what they are targeting, so the B-RAF and MEK inhibitors need to permeate the cells and block enzymatic function, so those are the small molecules and those are formulated as pill drugs because they can go through membranes. As a small molecule, they can get inside the cells as opposed to the immunotherapeutics, which are blocking negative regulatory pathways of the immune system. This is a concept that came about first with Tim Allison’s description of anti-tumor activity of CTLA-4 blocking antibodies, on which ipilimumab is based. What we are trying to do is get the immune system to attack the tumor, and the tumor is growing from inside and the immune system doesn’t recognize that as something bad, and it has breaks that are built by nature to avoid cell reactivity to normal tissues, and as we take a break like CTLA-4 we get some patients to respond. Within another more relevant break, PD-1 and PDL-1 interactions, which is a break when the immune system cells are ready to attack the tumor in the final stage of an immune response to cancer. We take that out, and now we have higher responses, less side effects, and hopefully they will demonstrate to be durable responses. Those breaks are surface proteins, and those surface proteins have no instamatic activity by themselves, so they are blocked by specific antibodies that are blocking antibodies to the receptor. That is why they have to be given intravenously.

Fendrick: That is very helpful. I am going to ask our clinician experts 1 broader question, and I’m going to tee you up, Dr Malin. With all this activity going on, and all of this enthusiasm and trials in place, how do payers actually assess value and ultimately determine access to these agents? The question I would like to ask is, I was involved in a medicine panel that released a report yesterday on geographic variation in healthcare delivery, particularly showing a variation tends to be greatest when even the experts in the field don’t know what the right path is for a particular condition. We have a faculty member from Southern California and one from Northern California, but you are obviously engaged nationally and internationally. What can you say about a standard of care, or a lack thereof in metastatic melanoma, given all of this exciting innovation going on in the field? Is it the wild, wild west, or are there guidelines similar to what we used to see from the National Comprehensive Cancer Network?

Weber: Well, there are NCCN guidelines for metastatic melanoma, and a lot of private practice doctors in South Florida where I practice in our academic center will follow them. In fact, they will write it into the notes. Dr Ribas and Dr Malin, I assume in your area that is the same, isn’t it?

Malin: I think NCCN has done a tremendous service to the field of oncology in that we do have very comprehensive guidelines, and they are updated very frequently. This is very helpful in an exciting area like melanoma, where there is so much innovation and so many new therapies that there are not hard data on how to sequence them, so you really have to rely on experts to provide that kind of guidance to people out there in the community treating patients. I will say, however, that before this call, I checked how NCCN was recommending use of the 2 new B-RAF inhibitors and they were FDA approved in May, and NCCN hasn’t updated its guideline. So, there is a little bit of a lag, and I think it is challenging. It is a good challenge to have, so many new therapies all at once that you are not sure yet how to choose among them and how to sequence them. I think we will see over the short period, as we are all struggling to figure this out, a lot of heterogeneity in practice, and I think that is understandable.

Weber: Also, I think practices will vastly vary at an academic center like mine where you have 25 melanoma trials. At UCLA I’m sure it’s the same. It is going to be a little different than if you are in Albuquerque, New Mexico, at a good private practice with 5 other oncologists. It is going to be very, very different as to what you can offer the patient.

Malin: Right. Maybe this brings up the issue of access. These therapies are very, very exciting and the benefits that some patients have are really tremendous. It is very exciting to see someone go into a complete remission following 4 treatments of ipilimumab and stay in remission even for a year, which wouldn’t have happened before. But, the wholesale cost of just the drug for that is $120,000, combination of B-RAF inhibitors, or start with immunotherapy, hopefully a PD-1 so most private practices, most small, independent practices (are) concerned about even taking on the financial risk of a drug that is that expensive without knowing whether the patient’s insurance is going to cover it, whether the patient can afford whatever their copay might be. If they have a 10% copay, that is $12,000 right there, so the cost of these drugs, at least in combining them, is going to bring new questions regarding access for people. We’ve seen this recently with CML where CML is the 1 disease that I think the treatment has transformed since I was in training with Dr Ribas, and these drugs really are unbelievablein terms of the dramatic change in terms of the impact of the disease on people’s lives. They really do live in symbiosis with their disease for probably, it appears now, to “what their natural life expectancy would be.” But the drugs cost over $100,000 a year. Even some of the original ones like imatinib, the price has been going up each year quite steadily. So much so that recently there was an editorial in The New York Times, signed by a large number of the hematologists that treat these patients, that the crime is profiteering. I think if we are looking at imatinib in combination with another drug, an anti-PD-1 drug, we don’t know what the price is going to be of those other therapies, but it is easy to envision that we would be looking at several hundred thousand dollars a year of therapy, and a therapy that someone might get retreated with.

People can have long remissions and some people do benefit from retreatments so we don’t know, to achieve that vision of 10 or 15 years of symbiosis, does it mean someone is going to need to repeat treatment every couple of years? I was mentioning earlier that many independent practices feel that it is too costly, but when someone gets the treatment in an outpatient hospital setting, usually the cost is double or triple, so just for ipilimumab, we are looking at a cost to the patient’s payer, which eventually is actually their employer, of $240,000, $360,000. That is really what the true cost of the therapy ends up being after whatever the markup is from the hospital. The price of these we need to be very conscious of to insure that people have access to these therapies.

Weber: I think this is something that is at the top of everybody’s consciousness in the medical field. There are a number of things that will come into effect over the next few years, in that the NCI, the FDA, just about every professional group is going to emphasize the idea of trying to have biomarkers to select the right patients. You can’t just treat 100 patients and benefit 8 of them. It is not going to happen in the future, and the FDA has made it very clear how important they think biomarkers are. The classic was the B-RAF mutation test that was approved when they approved dabrafenib, so the 2 variables will be selecting the patients more appropriately, and determining what the value will be. I predict that you are not going to get the (Oncologic Drugs Advisory Committee) and the FDA to approve drugs or push forward unless there is clear, significant value; a 5-week prolongation of survival is not going to cut it in the next 10 to 20 years, not when the drug costs $120,000 just for the wholesale price. As Dr Malin just pointed out, you increase the price because you have to add the margin of profit for the hospital, you have to add the nursing costs, the infusion cost, the doctor cost, etc, so those 2 driving forces will help, and the final thing is, there is only so much money in the world and certainly there is only so much money in this country.

At the current rate, I suspect if you graph the price of current drugs over the last 20 years, you would see at least a linear increase with a doubling every 5 years and eventually what is it going to be, $300,000, $400,000, $500,000, or $600,000 to treat someone? That is just not practical. There will be pushback from citizens, there will be pushback from every walk of American life. People study this, and Dr Ribas probably knows these data and can correct me if I get it wrong, but Tom Smith, who used to be at the Medical College of Virginia and is now at Hopkins, studies what Americans think would be a proper amount of money to spend per year of life...the so-called marginal value of a drug, and it is not $500,000, it is not $20,000, it is somewhere between $50,000 and $180,000, and that is kind of where ipilimumab is and vemurafenib is. You are adding, and looking at the dabrafenib, trametinib price together, and if you add it together and multiply that by the profit margin and then you add that it is a monthly charge over a year or 2 years, it is $200,000 a year. I just think people won’t accept it, and I think the companies are going to have to cut the price. I’m not an economist, but I find it hard to believe that for them to stay in business they need to charge $200,000 a year for dabrafenib and trametinib.

Fendrick: Dr Weber, we don’t have anyone representing the manufacturers’ side on the line, but you are falling into my own area of expertise and all of the numbers you say are, of course, right on, except it is not talking about who is actually paying, the employer or the government through organizations like WellPoint that are paying these dollars.

Weber: You and I are paying. It is our tax dollars that are going for this.

Fendrick: I wanted to ask a question, an easy one, and then comment on some areas where The American Journal of Managed Care has taken the lead. Dr Ribas and Dr Weber, I would like you to comment on whether you actually feel there is cost-related nonadherence and lack of access right now, and I just want to throw out very quickly the concept that the other co-editor of The American Journal of Managed Care, Mike Chernew, and I developed over 10 years ago called value-based insurance design, and you should at least find some solace to know that one of the slowest areas of healthcare cost growth in the United States is pharmaceuticals overall, largely because of the emergence of generics in the small molecule market, and everyone is focusing, of course, on you guys in the specialty pharma area where almost every American who has coverage, and especially in pharma, pays an equal amount of coinsurance on every drug. That being a drug that cures cancer like the ones you are talking about, as well as ones that hardly work at all, or even best case scenario, prolong life by just a few months, so we have proposed with great support from ASCO, NCCN, and COA and everyone else, an idea to extend value-based insurance design to especially pharma, where coinsurance would go much lower for the drugs that work as well as you say, particularly in the case of metastatic melanoma, and cost sharing would go up when you use agencies that are off label or for rescue therapy, and this is being discussed by multiple stakeholders that are used in other areas of medicine now, but now just being explored in, especially, pharma. Imagine that a combination is discovered that works all the time, regardless of the manufacturer’s price, the cost to the patient would be lower than for a combination of agents that you would never, ever use but see being used out there by people behind the curve. With that editorial comment, what do you see happening now regarding cost-related lack of access or nonadherence, if at all?

Ribas: It is certainly happening for ipilimumab. In places like the county hospital, it is hard to find any patient who has been on ipilimumab because it has not been approved for administration even though it is an FDA-approved drug and there are randomized trials that demonstrated approval and survival. Those randomized trials showed improvement that is based on a small percentage of patients, around 10% to 15% when we look at the totality of the difference between the control curve and the ipilimumab curve, but to try to make a point in favor of the manufacturers of these drugs, especially BMS for ipilimumab, ipilimumab took 10 years of clinical development and several thousand patients treated until this benefit was demonstrated in randomized trials. Why would it take so long? Because, as Dr Weber was saying, we don’t have a marker and possibly we will not have a marker because it is an agent that is activating the immune system very far away from the tumor, so there are several thousand genes that are involved from the activation, from the release of CTLA-4 and until a T-cell kills the tumor and shrinks the tumor. So it is unrealistic to think there is going to be 1 biomarker that says this works or doesn’t work in patients, or even in niches for responders and nonresponders. Both Dr Weber and I, in our labs, have dedicated over 5 years of research in these and we are back to where we were, which is we give it to everyone because we don’t want to miss those patients that can go on to have decades worth of life and continuing free of metastatic melanoma. Those are people that should not be alive but continue to be alive, and are going on with their lives. That is something that I have trouble putting a price on, but the worst case is when we don’t even have the chance to give it, and that is what is happening with the price of ipilimumab being so high, and as Dr Malin was saying, it is not only the wholesale price, it is the total bill that I see, and I am outraged every time a patient comes and says this is what your clinic charged my insurance to give 4 doses of ipilimumab.

Weber: To further address the question, are there people for whom it is not available? We have had the occasional referral to Moffitt, a charity patient who has either Medicaid from another part of the state, like someone from Miami, who is a bit of a distance away, and actually the folks at the University of Miami will not treat them and have occasionally been referred here and Moffitt will either eat the cost of some percentage of those patients, or BMS will make the drug essentially available free, for example. Generally we have gotten along and I can’t think of anyone who has denied it, but it certainly can be a torturous process to get treated with the drug. A lot of the companies have these programs where if you can’t get anybody to pay for it, they will give you the drug for free, for either a huge discount or for nothing, so eventually it happens, but it can be a huge hassle for everyone concerned.

Fendrick: We have seen this and tied in some very important points about biomarkers and targeted therapy, and there is practically zero cost-related nonadherence to Herceptin and HER2-positive patients just because of the compelling evidence for them, and I’m hoping not knowing your field anywhere near as well, that what you say Dr Weber is happening at Moffitt in Tampa, will expand around the country.

Weber: Dr Ribas, is that the case at UCLA? I guess UCLA is a state hospital and they take Medi-Cal and they have charity patients, and I assume everyone eventually, in spite of the hassles, who merits getting treated with ipi will eventually get it, is that correct?

Ribas: Yes, there are patients who don’t get to our clinics, and other patients who have no insurance at all that aren’t seen at the county hospital, which is normally where you see patients. ....when I talk with the doctors there, they tell me that it is very seldom we are able to give ipilimumab to a patient because of the cost.

Weber: I can see that being an issue for the poorest patients. Those who are at the LA County Hospital, I can see that being a big issue, because I’m not sure what Medi-Cal does, whether they will cover the cost of the ipilimumab. That is a good question. But, it is a huge debate. Again, this was a huge topic of conversation at this Advisory Board I recently attended at ASCO on this very topic, and I can’t go into the exact details of what drug we were talking about, but the question was, what if the price were $300,000 or $400,000 to get treated with some regimen lasting a year, would that be realistic? My opinion was, there is only so much money in the United States. You are going to run out of money and you have to cap the cost, and where that cap goes is a national debate or dialogue, but I think our scientists who study this will tell us that Americans will accept somewhere between $100,000 and $200,000 expended on this kind of treatment for a year’s worth of treatment that will seriously prolong your life.

Fendrick: Again, it matters if it is their money. You don’t need to cap the cost, you need to cap the coverage and I think there will always be people with resources willing to spend unlimited amounts of money on evidence-based and, unfortunately, non—evidence-based therapies, and it is pervasive in this country. I would like to go back to Dr Malin for a second and you said something, that many of the managed care pharmacists that we touch on a regular case basis may take an argument with you on the fact that you said how exciting it was to have a large number of innovative, expensive therapies that we don’t really have a full dossier of evidence on. The kind of thing that really makes managed care pharmacists crazy is the fact that they are pushed harder, and harder, and harder to identify preferred agents, much more so out of the cancer realm, but more and more in the cancer realm. I wanted you to comment. There are many reports in The American Journal of Managed Care on new models of payment in oncology, particularly a bundled payment or an episodebased payment for a condition over a very long period of time, as opposed to the a la carte approach that we have been talking about a lot on this call, and you can imagine when you are capitated or bundled, or episode group or whatever the term is, there is at least a theoretical perception that people would not use the best, if expensive, agent, and instead start with lower-cost agents, which is something we are very accustomed to in the small molecule world.

Malin: In the oncology world, there have been a number of folks who have talked about episode-based payments and a proposal of those models. Dr Peter Bach at Memorial Sloan-Kettering has written extensively about it, and I think while conceptually it is appealing, it is very challenging to implement in oncology for a number of reasons. First of all, depending on the disease characteristics and biomarkers that the patient has, the cost of treatment may be $10,000 or $300,000, and so unless you have incredibly large risk pools, how do you account for the fact that just the natural prevalence of those things is going to vary? Then you have this rapid innovation, so how do you adjust the episode payment for when a new drug gets approved that costs an extra $100,000?

Then there is the fact that just the way our system is designed, some drugs are paid for under the medical side, and some drugs on the pharmacy side. Envision how would you construct an episode payment for melanoma when you have ipilimumab that let’s say, just the average sales price is $120,000, but all the B‑RAF inhibitors would be covered under the patient’s pharmacy benefit. Do you say that the practice has to pay for those oral drugs as well out of their episode payment and they have to provide it whether it is IV or oral, which impact or benefit design then? It is very, very complex to try to envision how you would come up with a single payment for an episode, and not have a thousand different types of episodes in order to capture the heterogeneity of these diseases and the cost. A global capitation has certainly been tried and there are some large medical groups that have capitation more globally with stop/loss ratios in California, but again, there aren’t really good data for us to know whether access to innovative therapies is impaired in those kinds of environments, and we have seen some concerning signs regarding use of counterfeit drugs and things like that, in environments where practices are more pressured financially. The approach we are favoring at Well-Point is a pathways approach where we are in the process currently of designing a pathways program and our goal there is to insure that there is parity between more cost-effective treatment options and the higher-cost treatment options to the practice that is treating the patients. One of the vague ways that we reimburse oncology is that most of the revenue for a practice comes from the margin on the drug they prescribe, if you are talking about independent practices and certainly hospitals as well, although the treating physicians and the hospitals may have a less line of sight into that, so if you are looking at 6% of 5FU, that is 17 cents margin. If you are looking at 6% of Herceptin or ipilimumab, Herceptin, the average cost for treatment is probably around $3000 and that is a big difference from 17 cents for 5FU margin when you are talking under $60, and 6% of ipilimumab if you feel you want to undertake the risk of not getting paid. The current reimbursement system really provides no incentive for physicians to select the most cost-effective therapy even if the treatments are equally effective, and so the idea behind a pathways program is you have a group of experts who review the regimens, review the NCCN guidelines, and if there are treatments that are equally effective for a given patient type, then you would have on your pathway the least effective of those treatments and then provide additional funding for the practice so that they stay whole if they are choosing the most effective and most cost-effective treatments.

Fendrick: As we heard in Dr Weber’s complete introduction, oftentimes we don’t have the answers when we have to make decisions on this issue, but you have articulated, almost in an academic way, the imitation of the bundle payment model. Although these have been discussed for quite some time, it is our impression from the AJMC standpoint that it hasn’t slowed the momentum to see these things moving forward, so limitations notwithstanding, I think these are things that you folks in practice are going to have to deal with head-on. I want to ask 1 last general question of the 3 of you, and just to make a point that may make Dr Weber feel better, this week Governor Jack Markel of Delaware signed a bill limiting patients’ out-of-pocket expenditures for specialty drugs to $150 a month. So you can imagine if these bills go forward (in other states) and we end up pushing the other side of the cost of these agents into premiums and other types of things, it will have certainly a much, much different effect than if patients had to continue to pay 10% or 20% coinsurance every time they got these things prescribed. So there at least is some movement on the state policy front, and some initiatives are actually happening on Capitol Hill as well, to actually see copay relief for specialty drugs, at least with some evidence-based requirements as Dr Malin outlined. I want to ask 1 thing that comes up a lot also for our readers—the issue of Sterigen’s Center of Excellence, and what you thought about the idea of a situation where patients would get better coverage or lower cost-sharing if they went to Centers of Excellence for specific types of cancers? Just theoretically say that the Johnson Center and the Adams Center were designated as Centers of Excellence by payer organizations like Dr Malin’s. Do you think it is a good idea or a bad idea for particularly rare cancers to follow a model that we’ve had in place for transplants for decades?

Weber: I guess as long as it is legal, I wouldn’t have a problem with seeing more patients and bringing more business to places that excel at what they do. To be honest, if I had a metastatic melanoma and I were living in some rural location in a large state geographically isolated from the large center, I would probably go to the big center, no question.

Fendrick: You would favor benefit designs encouraging that?

Weber: That is an interesting question. My first query, is that actually legal? Can you actually, financially penalize someone for where they choose to get their treatments?

Fendrick: You are not penalized. Just so you know, Dr Weber, the Cleveland clinic, for instance, has multiple contracts with multiple large employers for employers around the country to send their patients to Cleveland, which I call negative medical tourism, for their cardiovascular procedures, so I’m not suggesting that they raise cost sharing to go to certain places but to lower it for others, and I’ll just say, and Dr Malin certainly knows, this has been the core contract behind networks and health insurance products for at least 4 decades. Dr Weber, you probably have a health contract with lower costs for you to go to certain doctors as opposed to others.

Weber: Absolutely.

Fendrick: I know these exist, these types of products exist, so I would not spend a lot of time on that. I just want to get your impressions and opinion on evidence-based steerage.

Weber: I think that Dr Ribas and I would probably love the idea, and we would welcome having melanoma patients all go to a specialty center, at least for consultation. Dr Ribas, I assume you would agree?

Ribas: I would agree. Sometimes we see patients on a second opinion coming from the community. The data the community doctor has are the same as we have, the drugs are the same but the usage may be wrong because they are not thinking about melanoma every day. My thinking is always that regardless of the cost, if we treat, it is cheaper than if we don’t treat. I mean treat, not just delivery of a nature, but we actually treat a medical condition and the medical condition improves. That is always going to be cheaper, regardless of the price of the drug, not an absolute, but we don’t give drugs that don’t work or give them in the wrong way...

There may be a value in having a centralized guidance of treatment adapted to a particular patient. We have NCCN guidelines, but that has to be interpreted for individual patients and that requires a clinic visit. With all of this discussion I just wanted to bring up 1 thing which is, even though things have come so rapidly, Dr Weber and I know it is going to change even further, that the PD-1, PDL-1 antibodies are going to change in the treatment of melanoma again within the next 2 years, and none of the price structure that we may be discussing now, it is going to be a problem for just a couple of years because the PD-1, PDL-1 antibodies, if we look at the data right now, suggest that we will get a significant fraction of patients with metastatic melanoma to have durable responses with therapies that are basically non-toxic or serious side effects that need to be intervened and will leave the patient in the hospital. It is basically non-existing, now that we know we have to anticipate what it is. There are 7 of those PD-1, PDL-1 antibodies in the clinic being developed right now, and probably there are going to be more that will be developed. There are 3 of them that are positioned to have licensing potential in melanoma and maybe many other cancers. I would assume that would drive down the cost, and instead of going the path of ipilimumab where it was to the maximum that it could, there was no competition, not a second CTLA-4 because the Pfizer one was negative and the trametinib, the clinical trial was negative for a whole bunch of reasons, and then there was not a similar agent besides high-dose IL-2 that could give durable responses in melanoma, but high-dose IL-2 would assume it is even more expensive than giving ipilimumab, so the field backing will go into what we are talking about which is adapting the prices to the benefit because there will be more competition and the existing drugs will become second-line drugs, and companies will not be able to be charging as much anymore.

Weber: I think Dr Ribas raised a very interesting point. The essence of the capitalist system is that competition brings down the price for the consumer, and if you have 3 PD-1 or PDL-1 antibodies, how are you going to choose? If they seem equally effective, obviously whoever cuts the price the most, that is the one that is going to get used, and here you have in front of you an example, what is the price per month of dabrafenib, a drug that arguably is equally effective as vemurafenib, and has a slightly different toxicity profile that may or may not be superior. Its price is significantly less than debrafenib’s, and does anyone think that is an accident? I don’t think so. One of the solutions to the problem is as companies develop competing drugs, the price will to some degree come down, and look who is developing B-RAF met combinations, 3 companies, Novartis, Genetech, and GSK. The same thing is going to happen, it is not going to be $16,000 a month because someone will come in with a new approval and it will be $13,000 a month, and the next one will be $10,000 a month, so perhaps there is some relief on the horizon in terms of pricing because of competition, the classic essence of capitalism.

Fendrick: The relief for price will fall only if the drugs remain equally effective. Evidence over 50 years would suggest that the prices will go up in toto as opposed to likely going down per agent, but I did want to let Dr Malin comment on this. What I find most interesting and learned a lot about over this session is that from a scientific and clinical outcomes perspective, the field of metastatic melanoma can be held out as exemplary in terms of innovation and science, and actually lead to better outcomes for individuals with this 1-time, nearly always fatal disease as you said, Dr Weber, so clearly that glass is half full, if not more than half full regarding where we are going on the health outcome side. Dr Malin, in terms of cost, are we half full or half empty, given the pressures that Dr Weber and Dr Ribas mentioned clearly on not only individual patients, but the healthcare system as a whole?

Malin: I think clearly the cost of these new therapies is a challenge, just as the overall cost of healthcare is a major challenge for our country. There was a recent article in the American Journal of Family Practice that was looking at the rate of rise of healthcare premiums and out-of-pocket costs, and in just a few years basically the cost that both the employer and the individual pay for their health insurance, along with their out-of-pocket costs, will be equal to half of the median family income. So clearly it is not conceivable that costs can continue to go up. We can not spend really more than we already are of our incomes on our healthcare, so as we get new, innovative therapies that are more and more expensive, in order to pay for them, it means that the dollars have to come from somewhere else in the healthcare system. Now the good news is we think that 30% of what we spend on healthcare is waste, so if we can figure out how to stop doing the things that don’t help people, we can insure that we can continue to make sure to make new therapies that are highly innovative available to people, but figuring out where that waste is, and getting people to stop doing things that don’t provide value is challenging, and I think you know the comments made about the costs will come down, the costs will come down likely if we can exert pressure like formularies.

It is interesting, you look at the fact that there are 3 aromatase inhibitors that have gone generic, on 2 of them the price dropped to $20 a month and 1 of them is still at $300 a month, but most oncologists don’t even realize there is a difference in price, that either the patient is or isn’t paying at the pharmacy but their employer is paying a difference, and that is a big difference in the cost for a very active therapy that is equally effective. We have to, I think, as health plans and for pharmacists that are managing patients’ pharmacy benefits plans, we have to be mindful of the evidence and certainly we want to insure that people always get the most effective therapy, but in order to insure that competition really does have these drugs be available at a price that everyone has access to, we are going to have to use tools like formularies and pathways to highlight where things are equally effective if the cost is out of line and prefer those treatments that are lower cost so that we can insure that people have access to these therapies.

Fendrick: Thank you very much. I have to say that I’ll finish where you started on this idea of value, or Dr Weber started it, on the issue of clinical nuance, which is something that is critically important to what we do at The American Journal of Managed Care, which is identifying that services differ in the value that they create and the current benefit designs that patients see, they pay the same out of pocket for lifesaving drugs as they do for drugs that I wouldn’t give my dog, and we are focusing very much on the issue of waste. I think all 3 of you know about the Choosing Wisely initiative, which is now over 50 medical societies identifying services of low or no value, which is bringing a clinically driven umbrella to the trade-offs between high-value services and low-value services, and what we do at The American Journal of Managed Care and the Center for Value-Based Insurance Design is to exactly reiterate what Dr Malin said, to make those services on which the evidence is strong accessible to patients and profitable to providers, and hopefully turn the corner and no longer make it profitable or easily accessible to patients to do services for which the evidence is weak, or in some cases, where there is true evidence of harm.

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