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Precision Oncology: Are Payers on the Right Pathway?

Evidence-Based OncologyAugust 2015
Volume 21
Issue SP12

In oncology, the shift from a "companion diagnostic" to a "companion therapeutic" paradigm is in high gear. While the noise and confusion is leading many payers to avoid coverage, they can benefit by proactively taking steps to integrate precision oncology to better manage quality, access, and cost of cancer care.

A New Vision

In 2009, a 58-year-old man diagnosed with poorly differentiated adenocarcinoma of the lung received then standard of care diagnostics and treatment, including neoadjuvant therapy, surgical resection, and postoperative radiotherapy, which stabilized the disease. In 2012, the patient experienced abdominal pain, and a diagnostic workup confirmed relapse of his lung adenocarcinoma. Polymerase chain reaction (PCR) and fluorescent in situ hybridization (FISH)—based molecular testing of the EGFR, KRAS, BRAF, HER2, ALK, ROS1, and MET genes were each negative. After 2 cycles of standard chemotherapy, the tumor was refractory, and the patient’s condition worsened. Additional molecular testing was completed, and a novel RET/KIF5B gene fusion, discovered by Foundation Medicine in 2012,1 was reported. The patient was then started on the RET inhibitor vandetanib, leading to clinical remission.2

Following the discovery of the RET/KIF5B gene fusion by Foundation Medicine, additional data demonstrating clinical responses to another RET inhibitor, cabozantinib,3,4 led the National Comprehensive Cancer Network (NCCN) to include RET fusions and cabozantinib treatment in the 2014 guideline update recommending broad molecular profiling for lung adenocarcinoma patients.5 Thus, within 2 years, a previously unknown genomic alteration (RET fusion) and a matched targeted therapy option were identified and demonstrated clinical utility. This progression from discovery to guidelines to standard of care is one of many examples that underscore the rapid evolution from empirically selected cytotoxic treatment to genomically driven, precision oncology care for an increasingly broad population of patients.

The Unmet Need

Payers challenged with the task of managing quality, access, and cost of cancer care struggle to keep pace with the innovations and rapid evolution of precision oncology. The total costs of cancer are rising exponentially; annual costs for cancer care in the United States increased from $104 billion in 2006 to a projected $173 billion in 2020.6 At the same time, many patients are living longer. Largely due to earlier stage detection, two-thirds of Americans live at least 5 years after a cancer diagnosis, an improvement in survival since the collection of such data began in the Surveillance, Epidemiology, and End Results (SEER) Program in the 1970s.7 It is estimated that the number of new cancer cases will increase by 45% in the United States by 2030, making cancer the nation’s leading cause of death, driven largely by the growing number and aging of patients from the baby boomer generation.6

The current standard of care in oncology often results in wasted dollars. Adverse events associated with invasive procedures, non-targeted treatment toxicity and unnecessary testing, as well as emergency department (ED) visits and hospitalizations, all drive substantial human and financial costs associated with comorbidity, reduced quality of life, and even mortality. The idea of 1 empiric treatment approach for every patient with a particular cancer (eg, breast cancer) is not yielding the results required to make meaningful improvements in care. Because of failures with the empiric approach, and the new understanding that cancer is a disease of the genome, treatment is rapidly moving toward precision-based oncology care.

Understanding a patient’s cancer at the level of the genomic drivers requires new approaches to diagnostics. Current molecular diagnostic testing platforms are primarily “hotspot” tests (ie, a small segment or segments of the coding region within cancer genes where common alterations—usually only base substitutions and some insertions or deletions—are found). “Hotspot” tests have significant limitations, including the potential for missing clinically relevant genomic alterations, being too costly and inefficient, and using too much tissue. For example, insufficient tissue to complete all of the recommended diagnostic cancer tests is a growing problem. Using conventional methods (eg, FISH, immunohistochemistry, PCR), precious tissue is consumed by multiple types of “hotspot” tests. This challenge may affect patient safety, potential treatment efficacy, and cost-effectiveness of care. A recent study reported that the primary reason for not successfully testing all targetable alterations was insufficient tissue for the basic molecular testing itself, in addition to the fact that 2 or more biopsies were often required to complete requisite molecular testing.8 Insufficient tissue places the patient at risk for additional comorbid and costly procedure(s),9 which can be avoided with a tissue-sparing approach to testing.

Precision oncology cancer care is becoming routine, with more than 300 identified driver and tumor suppressor genes, hundreds of test options, and more than 40 FDA-approved targeted therapies available.10 Targeted therapy is primarily used in advanced stages of disease (ie, stage IV) since patient treatment and outcomes in earlier stages are often highly amenable to standard chemotherapy, radiation, and surgical resection. While molecular testing is standard for many advanced tumor types (eg, stage IV breast cancer), payers are reporting enormous costs from overutilization, often in excess of $10,000 per member diagnosed with cancer. And the influx continues—targeted therapy pipelines for commercial development include more than 470 drugs for more than 150 molecular targets in over 950 clinical trials.10

Professional organizations like the NCCN and the American Society of Clinical Oncology (ASCO) consider clinical trials to be standard of care for patients with cancer,11 and many new clinical trial designs are expanding access for patients.12 When approved by the FDA, targeted therapies are projected to cost in excess of $100,000 per year with the potential for “combination” targeted therapy to multiply this cost impact further.

Unfortunately, in sharp contrast to improved survival in early stage disease, the relative survival rates of patients with advanced cancer remain largely unchanged (Figure 1). Despite decades of research, promising advances in treatment, and billions of dollars of investment, improved outcomes and quality of life have yet to be realized for most patients with advanced cancer. Additionally, the explosive growth of molecular tests and related treatment options are overwhelming the payers’ ability to review and assess value for coverage and payment. Payers are clearly in need of simple solutions, and a new approach is required to improve outcomes and quality of life through improved safety, efficacy, and cost-effectiveness of diagnosis and treatment in later stages of disease.

The Payer Response Payers are responding with a variety of alternative payment solutions to managing the quality, accessibility, and accelerating costs of cancer care. Examples include but are not limited to payer-provider collaborative programs, such as:

  • Oncology medical homes
  • Pay for performance
  • Bundled payment
  • Limited provider networks
  • Nurse navigators
  • End-of-life support
  • Survivorship support
  • Treatment pathways

For example, United Healthcare, in a pilot initiated in 2009, reimbursed 5 oncology practices a flat fee for physician care and drug infusions in breast, colon, and lung cancer. While total costs were reduced by 34% compared with a control group, surprisingly, drug spending actually increased by 179% versus the same control group.13 In a recent article, Molly Gamble summarizes this trend by stating: “But more recently, in the move from fee-for-service to pay-for-performance, payers and providers seem genuinely interested in meeting each other halfway when it comes to cancer care and costs. Whether through clinical protocols, provider-patient counseling sessions, genetic testing, or oncology-specific accountable care organizations and bundled payments, oncology presents several collaborative opportunities for providers and payers to better align incentives.”14

Perhaps more controversial than other approaches, pathway-based programs have been developed and implemented to help streamline oncology decision making in an increasingly complex environment. These programs rely on evidence and provider incentives that reduce options and the trial-and-error approach common in many aspects of cancer care. Pathways align utilization and payment with evidence supporting a reasonable likelihood of improved safety, efficacy, and cost-effectiveness of treatment. Unfortunately, because these programs rely on empirical evidence and consensus opinion that is largely outdated and out of sync with new standard genomic practices, they are likely to yield a poor return on investment in terms of relative survival (Figure 1) and quality of life. Pathways may save some money in the short term, but in the long term may be less successful without the inclusion of precision oncology.

Precision Oncology: A Core Solution

Cancer diagnosis and treatment is being transformed with the knowledge that cancer is a disease of the genome,15-18 and the genomic “blueprint” responsible for driving cancer is unique to each patient, the so-called “malignant snowflake.”19 Data indicate that genomically driven targeted treatment, or precision oncology, is often less toxic, more efficacious,20,21 and less expensive than traditional cytotoxic chemotherapy, especially when used as a first-line treatment option.22 Targeted therapies also have the potential to improve patient outcomes and quality of life downstream, in addition to yielding cost savings. Transitioning patients from cytotoxic to targeted treatments is a smart solution that meets the core objectives of payer-initiated alternative payment models—improved outcomes and quality of life through increased safety, efficacy, and cost-effectiveness. As discovered by Newcomer et al,13 while targeted treatments may initially be expensive, these costs can be significantly offset by the total cost-effectiveness achieved, primarily through:

  • Eliminating unnecessary molecular tests
  • Eliminating unnecessary biopsies
  • Reducing cytotoxic chemotherapy use
  • Optimizing targeted therapy utilization
  • Reducing ED visits
  • Reducing hospitalizations
  • Reducing futile treatment

This shift toward precision oncology has been rapidly accelerating due in large part to advancements in our understanding of cancer biology and molecular testing, which better inform diagnosis and treatment decision making. Initially, targeted treatment options were based primarily on single gene “hotspot” or panel tests of 2 or more genes to identify known targetable alterations and “matched” therapies in a very limited subset of tumor types (eg, EGFR/erlotinib in non-small cell lung cancer [NSCLC]). However, this “1 target—1 drug” model is unsustainable, and a transition to comprehensive genomic profiling (CGP) of all clinically relevant cancer genes and classes of genomic alteration is already replacing the “hotspot” approach as standard practice for select groups of advanced cancer patients.

It is increasingly acknowledged that a comprehensive histo-genomic diagnosis (ie, combination of histologic classification by tumor type with subtyping by genomic characterization: Figure 2) based on a robust knowledge base, with deep analysis of all biologically and clinically relevant genes in cancer, is essential in treatment decision making because it enables a complete understanding of the cellular pathways that drive a tumor’s growth. Such a comprehensive approach can provide clinicians with accurate information about treatment sensitivity, resistance, and the need for best supportive care options in the absence of clinically relevant alterations or matched therapies (ie, futile targeted treatment). (Figure 3).

There are many contributors to the emergence of highly validated CGP and robust decision-support platforms. These include the capability to simultaneously assess, with high sensitivity and specificity, all genes and classes of genomic alteration known to be biologically and clinically relevant in cancer (including base pair substitutions, copy number alterations, insertions/deletions, and select rearrangements), and a growing list of targeted therapeutics that can only be fully utilized with a comprehensive diagnostic approach. Modern medical techniques incorporating smaller, less invasive biopsy procedures cause a scarcity of tissue for diagnostic testing, which requires comprehensive and fully validated testing for patients with advanced cancers, using increasingly minute tissue samples. Test content can be updated daily to reflect the most current evidence supporting clinical utility, which relieves the payer burden of trying to keep pace with the rapidly evolving field of precision oncology.

Evidence supporting analytic validity, clinical validity, and clinical utility of CGP is now well established.23 To assure quality, validation standards have recently been established by Palmetto MolDX,24 and their new Local Coverage Determination (LCD) NSCLC, Comprehensive Genomic Profile Testing (L36143) specifically establishes coverage criteria for CGP effective July 6, 2015. Additionally, at the 2015 ASCO meeting, Wheler et al reported on one of the first prospective trials to evaluate patient therapy matching informed by CGP-improved survival in a group of patients with advanced, refractory tumors that were highly pretreated. Median overall survival was 10.8 months for patients receiving CGP-informed matched therapy versus 7.5 months for patients treated with non-matched therapy.25

For select patients with life-threatening advanced cancer, access to a single clinically effective and cost-efficient test is essential. A significant advantage of CGP is the opportunity to eliminate clinical inefficiency, costly use of suboptimal tests, and unnecessary biopsy procedures. Further, CGP enables effective utilization and cost management of the increasing number of targeted therapies within the patient’s medical and pharmacy benefit. As a core navigational aid for payer coverage, payment, and management programs, CGP enables the timely consideration of all available targeted treatment options consistent with relevant guidelines including those from the NCCN and the FDA. As precision oncology becomes more standardized, improved outcomes and quality of life will benefit broader patient populations,25; and, as reported by Intermountain Healthcare at the 2015 ASCO meeting, the total cost of cancer care is likely to be substantially reduced as cytotoxic therapies, ED visits, hospital utilization, and related costs are replaced by preferential use of targeted therapies with improved safety and efficacy.22

A New Pathway for Payers

Payers challenged with the task of managing quality, access, and accelerating costs in cancer care are struggling to keep pace with the innovations and rapid evolution of precision oncology. Complicating matters further is the existing medical, coverage, and payment policy framework for diagnosis and treatment. This outdated framework is fundamentally organized around populations rather than individuals and is based on tumor histology that is not supplemented by the comprehensive genomic evaluation of specific alterations associated with the exhaustive universe of cancer genes.

The growth of precision oncology has generated a proliferation of new drugs and tests, with manufacturers and labs clamoring for payer coverage. The shift from a “companion diagnostic” to a “companion therapeutic” paradigm is in high gear; the current armamentarium of FDA-approved and clinical trial agents are now being matched to the patient based on their unique genomic profiles. Unfortunately, the noise and confusion is leading many payers to avoid coverage, missing out on the unique opportunity to proactively collaborate with leading experts by integrating precision oncology into pathways and other programmatic solutions.

Fortunately, payers can now benefit from proactively taking strategic steps to integrate precision oncology into coverage and alternative payment models, as noted below:

1. Acknowledge cancer as a disease of the genome; modify the existing coverage and payment policy framework to align with cancer biology and the N-of-1 diagnostic reality of treatment decision making as a frontline strategy.

2. Recognize CGP as a universal solution for precision targeted treatment decision making; reduce total costs of care by minimizing the use and costs associated with unnecessary biopsies, testing, cytotoxic treatments, and downstream ED visits and hospitalizations.

3. Partner with CGP providers capable of consistently meeting or exceeding high standards of analytic validation, clinical validation, clinical utility, and cost-effectiveness using tailored and efficiently integrated molecular information solutions.

4. Establish a genomic benefit management program that seamlessly integrates highly validated CGP data with expert decision support as the primary navigational tools informing evidence-based utilization and cost management solutions; for example, integrate CGP as the pathway to optimized use of targeted treatments in accountable care organizations, oncology medical home, pay for performance, bundled payment, limited provider networks, nurse navigators, end-of-life support, survivorship support, and/or treatment pathways.


5. Establish strategic advantage with precision oncology coverage and payment policies based on CGP as the “pathway” solution to successfully manage the growing costs in diagnostics and targeted treatment of members with advanced cancer.

Jerry Conway is vice president, payer relations and reimbursement, Foundation Medicine.Mark Oldroyd, JD, is senior director, regional payer relations and reimbursement, Foundation Medicine.References

1. Lipson D, Capelletti M, Yelensky R, et al. Identification of new ALK and RET gene fusions from colorectal and lung cancer biopsies. Nat Med. 2012;19(3):382-384.

2. Gautschi O, Zander T, Keller FA, et al. A patient with lung adenocarcinoma and RET fusion treated with vandetanib. J Thorac Oncol. 2013;8(5):e43-e44.

3. Drilon A, Wang L, Hasanovic A, et al. Response to cabozantinib in patients with RET fusion-positive lung adenocarcinomas. Cancer Discov. 2013;3(6):630-635.

4. Mukhopadhyay S, Pennell NA, Ali SM, Ross JS, Ma PC, Velcheti V. RET-rearranged lung adenocarcinomas with lymphangitic spread, psammoma bodies, and clinical responses to cabozantinib. J Thorac Oncol. 2014;9(11):1714-1719.

5. NCCN clinical practice guidelines in oncology: non-small cell lung cancer. National Comprehensive Cancer Network website. http://www.nccn.org/professionals/physician_gls/pdf/nscl.pdf. Accessed July 2, 2015.

6. American Society of Clinical Oncology. The state of cancer care in America, 2014: a report by the American Society of Clinical Oncology. J Oncol Pract. 2014;10(2):119-142.

7. SEER*Stat Databases: November 2013 Submission. Surveillance, Epidemiology, and End Results (SEER) Program website. http://seer.cancer.gov/data/seerstat/nov2013/. Accessed July 2, 2015.

8. Drilon A, Wang L, Arcila ME, et al. Broad, hybrid capture-based next-generation sequencing identifies actionable genomic alterations in lung adenocarcinomas otherwise negative for such alterations by other genomic testing approaches [published online January 7, 2015]. Clin Cancer Res. doi:10.1158/1078-0432.

9. Medicare costs analysis indicates need for decreasing use of biopsies as diagnosis tool for lung cancer. ScienceDaily website. http://www.sciencedaily.com/releases/2014/10/141030133053.htm. Published October 30, 2014. Accessed July 2, 2015.

10. Foundation Medicine Inc, S-1 Filing. Foundation medicine website. http://investors.foundationmedicine.com/secfiling.cfm?filingID=1193125-14-108289&CIK=1488613. Accessed July 7, 2015.

11. Weber JS, Levit LA, Adamson PC, et al. American Society of Clinical Oncology Policy Statement update: the critical role of phase I trials in cancer research and treatment. J Clin Oncol. 2015;33(3):278-284.

12. Schork NJ. Personalized medicine: time for one-person trials. Nature. 520(7549):609-611.

13. Newcomer LN, Gould B, Page RD, Donelan SA, Perkins M. Changing physician incentives for affordable, quality cancer care: results of an episode payment model. J Oncol Pract. 2014;10(5): 322-326.

14. Gamble M. Hospitals, Insurers devote more attention to the cost of cancer care. Becker’s Hospital Review website. http://www.beckershospitalreview.com/accountable-care-organizations/hospitals-insurers-devote-more-attention-to-the-cost-of-cancer-care.html. Published June 10, 2013. Accessed July 6, 2015.

15. Alexandrov LB, Nik-Zainal S, Wedge DC, et al. Signatures of mutational processes in human cancer. Nature. 2013;500(7463):415-421.

16. The benefits of looking across many cancer genomes: a perspective [press release]. http://www.cancer.gov/newscenter/newsfromnci/2013/PanCanPerspective2013?utm_content=sf31579812&utm_medium=spredfast&utm_source=twitter&utm_campaign=National+Cancer

+Institute&cid=sf31579812. Bethesda, MD: National Cancer Institute; August 12, 2014.

17. Targeting molecular tumor types. Nat Genet. 2013;45(10):1103.

18. Chmielecki J, Ross JS, Wang K, et al. Oncogenic alterations in ERBB2/HER2 represent potential therapeutic targets across tumors from diverse anatomic sites of origin. Oncologist. 2015;20(1)7-12.

19. LaFee S. Precision medicine is practiced medicine. University of California at San Diego website. http://health.ucsd.edu/news/features/Pages/2015-03-06-precision-medicine-at-ucsd-health-system.aspx. Accessed July 6, 2015.

20. Tsimberidou AM, Iskander NG, Hong DS, et al. Personalized medicine in a phase I clinical trials program: the MD Anderson Cancer Center Initiative. Clin Cancer Res. 2012;18(22):6373-6383.

21. Johnson DB, Dahlman KH, Knol J, et al. Enabling a genomically informed approach to cancer medicine: a retrospective evaluation of the impact of comprehensive tumor profiling using a targeted next-generation sequencing panel. Oncologist. 2014;19(6):616-622.

22. Heger M. Intermountain Healthcare demonstrates cost effectiveness of NGS testing for late-stage cancer. genomeweb website. https://www.genomeweb.com/cancer/intermountain-healthcare-demonstrates-cost-effectiveness-ngs-testing-late-stage-cancer?utm_source=SilverpopMailing&utm_medium=email&utm_campaign=Daily%20News%3A%20

Sequencing%20Data%20from%20Ebola%20Virus%20Released%20-%2006/03/2015%2004%3A00%3A00%20PM. Published June 2, 2015. Accessed July 6, 2015.

23. Foundation Medicine website. www.foundationmedicine.com. Accessed July 6, 2015.

24. Analytical Performance Specifications for Comprehensive Genomic Profiling (M00118, V1). Palmetto GBA website. http://www.palmettogba.com/palmetto/MolDX.nsf/DocsCat/MolDx%20Website~MolDx~Browse%20By%20Topic~

Technical%20Assessment~9WRHPN3576?open&navmenu=Browse%5eBy%5eTopic||||. Accessed July 6, 2015.

25. Wheler J, Yelensky R, Stephen B, et al. Prospective study comparing outcomes in patients with advanced malignancies on matched versus non-matched therapy. J Clin Oncol. 2015;33(suppl): abstract 11019.

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