31
Are payers ready to assess the combined value of drugs with a companion diagnostic?
by Anick Dubois PhD and Marie-Pierre Dubé PhD
The high cost (average of $100,000 to $300,000 USD per year)4and rapid market expansion of CDx-Rx pairs has put pressure on Health
Technology Assessment (HTA) bodies to conduct joint assessment and to provide reimbursement guidelines for CDx-Rx pairs. HTA bodies
and payers have much experience in the assessment of drugs, but adding a test to the assessment of a drug is creating additional challenges.
In particular, the establishment of a unique and clear approach for the assessment of CDx has been difficult. Consequently, guidance on the
appraisal of the combined value of CDx-Rx pairs for decision-making is lacking.
Anticipating the expansion in the availability of CDx-Rx pairs, HTA agencies in some countries are in the process of, or have already adapted
their policies and methods, to accommodate the assessment of CDx-Rx pairs including the HTA agencies of the United-Kingdom (UK) and
Australia. But, in general, there is a striking lack of evaluation frameworks to enable assessment of CDx-Rx package. Canada and the US do
not yet have specific policies or guidance for CDx appraisal, except for Palmetto GBA in the US. Palmetto GBA was the first Medicare carrier
to provide specific reimbursement guidelines for CDx, developing the Molecular diagnostic services program5 and establishing clear coding,
coverage and payment policies for CDx. In Australia, the Medical Services Advisory Committee (MSAC) framework6 was the first fully integrated
national framework for the co-assessment of CDx-Rx pairs. Applications for CDx-Rx pairs have been accepted in Australia using this updated
framework since 2010 via the Health Technology Assessment Access Point to ensure that each codependent technology is evaluated by the
relevant committee (i.e., the Pharmaceuticals Benefits Advisory Committee for the Rx and the MSAC for the CDx) and has the ability to inform
each committee’s decision and can provide coordinated advice. The UK HTA body, the National Institute for Health and Care Excellence (NICE),
published an update to their methods of technology appraisal to include CDx in January 20137. NICE has two paths for CDx: the technology
appraisal program and the diagnostics assessment program. Drugs that are dependent on the use of a CDx are evaluated in the technology
appraisal program. Within this evaluation, the CDx used in the pivotal trials is likely to be considered as well as the potential impact of using
alternative tests. However, these alternative tests are appraised under the diagnostics assessment program, which can enable more complex
assessments involving multiple technologies. The MSAC also compares various testing options in its appraisal of CDx.
argeteddrugsthataretailoredtobiomarkersaremostoftendevelopedorco-developedwith
acompaniondiagnostictoidentifypatientswhoaregoodresponders.Suchcompanion
diagnostic(CDx)-drug-(Rx)pairshavegainedsubstantialinterestintherecentyears.Thismarket
iscurrentlyworthapproximately$42billionandshouldbeworthover$60billionby20191.
Theoncologyarealeadsthemarket(e.g.Herceptin,Erbitux,Vectibix,Gleevec,Iressa,Giotrif,Zelboraf,
Xalkori,Mekinist,Tafinlar).Currently,42%ofalldrugsand73%ofoncologydrugsindevelopmentare
targeteddrugs2.In2014,20%ofdrugapprovalsintheUnited-States(US)weretargeteddrugs
3.
T
CO
GN
OS
CIE
NT
I
Australia and the UK HTA bodies have made
a more concerted effort to grow from their
traditional guidance appraisal in order to
include CDx, but the process remains
challenging. The major challenges that will
be discussed in this article are related to
evidentiary requirements and standards
(summarized in Table 1), and to new economic
evaluation modeling complexities assessing
the CDx. In many countries, the economic
impact of introducing a new heath technology
into the healthcare system is assessed using
budget impact analyses and pharmacoeco-
nomic analyses such as cost-effectiveness
analyses (CEA). A CEA compares two or more
health technologies by looking at the ratio of
incremental costs over the incremental benefits
of the new technology. Cost–effectiveness is
an established criterion for reimbursement in
Canada, Australia and the UK, and many US
payers and other international HTA bodies or
payers are using it for guiding decision making.
Distinct needs, same evidence source and
challenges for HTAs
In CDx-Rx pairs, the CDx and Rx are linked,
but distinct in terms of scientific knowledge,
of their evidence base, and with respect to the
system to set the price and the requirement for
the different decision-makers implicated. For
instance, regulators and payers do not have the
same decision drivers and evidentiary needs
(Figure 1). Regulators are gatekeepers who grant
market access on the basis of efficacy and safety
profiles using clinical evidence provided by
randomized clinical trials (RCTs). Payers’
roles are to maximize the expected health
benefits given healthcare budget constraints
and the clinical evidence as well as the economic
impact compared to other available treatments
(i.e., comparative effectiveness and cost-
effectiveness). Regardless of their distinct
needs, the evidence provided by manufacturers
for their assessment is generally idem. Data
from RCTs are analyzed and used to answer
the different questions of regulators and
payers. However, the data provided through
RCTs are sometimes not supplying the necessary
No clear guidance
Distinct for regulators and payers
Distinct for CDx and Rx
Unclear and not transparent for CDx (compare to Rx)
Variable depending of HTA bodies/markets (country to country)
Variable within a country (multilevel of HTAs: national, regional or provincial, local)
Table 1 Major challenges related to evidentiary requirements and standards
Figure 1. Distinct needs for regulators and HTAs, same evidence source and related challenges for HTAs.
answers to reimbursement and coverage questions,
creating evidence translation issues or
evidence gaps, and a need to use a number of
assumptions which leads to uncertainties.
How to make evidence translation work for HTAs?
As an example, direct and real-life outcomes
are particularly important for payers as
compared to the intermediate and surrogate
outcomes that are often provided as part of
RCTs (e.g., improved survival or quality of life
vs reduction in tumour size). Although this
does not present a new challenge, it does
present a recurrent problem, particularly
while assessing oncology drugs. Yet, with the
increased availability of CDx-Rx pairs and
targeted-oncology drugs with expedited or
conditional approval, this challenge is bound
to increase in frequency. Clinical trials are
powered to study differences in median overall
survival and progress free survival or other
intermediate and surrogate parameters (e.g.,
overall response rate) from smaller, open-label
trials. But for economic evaluation the gains in
a mean survival is a requisite outcome.
Thus, even if a drug is granted conditional
approval by a regulatory agency on the basis
of results from a Phase II or III trial with a
lack of overall survival benefit, it may not
be reimbursed. Also, as Jönsson B. (2013)8
indicated, progress free survival may be useful
for assessing efficacy, but it has many flaws
when it is used to predict survival and quality
of life. Quality of life is required to estimate
quality-adjusted life-year (QALY), which is
typically the preferred outcome measure in
REGULATORS NEEDS
QualitySafety
Efficacy
HTAs’ NEEDS
Direct / Real-world outcomesComparative effectiveness
Cost-effectiveness
CHALLENGES for HTAs
Evidence translation issuesEvidence gapsAssumptionsUncertainties
Validity of results challenged
RCTs’OUTCOMES
IndirectIntermediate
Surrogate
Provided evidence
economic evaluations (i.e., CEA is expressed
as an incremental cost-effectiveness ratio
(ICER) of costs per QALY or other health
gains). QALY is the preferred valuation method
by the HTA bodies of UK, Australia and Canada
when making recommendations for reimbursement,
but it requires evidence throughout the care
pathway. Commentaries in HTA bodies’ assessment
reports of targeted-oncology drugs are
frequently related to evidence translation and
gaps, lack of direct outcomes and uncertainty
related to long-term benefits.
From evidence to uncertainties
When faced with limited information available
from the RCTs, assumptions and uncertainties
are often introduced in the estimates calculated
(e.g., benefits, QALY, test performance, costs,
clinical management) in order to predict
comparative effectiveness. Complete and
perfect evidence is typically not available for
CDx. While clinical utility is provided through
RCTs for co-developed CDx-Rx pairs, other
parameters are sometimes lacking, creating
input assumptions issues in CEA and many
uncertainties. The extent of uncertainties
may affect decision–making. If two technologies
have the same incremental cost per QALY
but one has a higher degree of uncertainty,
the intervention with the higher degree of
uncertainty will be less likely to receive a
positive recommendation.
How much uncertainty should decision
makers accept?
Uncertainties in parameters can be evaluated
by means of scenario and sensitivity analysis,
but a large number of sensitivity analyses in a
CEA model can become burdensome and the
validity of these estimates may be confronted
by decision makers. To reduce decision-making
uncertainty in the absence of direct evidence,
a linked-evidence approach (i.e., chain arguments
linking different types of evidence from various
sources, e.g. epidemiological data, expert
opinion, observational and retrospective
studies, web-based surveys) was first proposed
in the Australian guideline of 2005 for the
appraisal of diagnostic tests and was used for
CDx assessment by the Australian Medical
Services Advisory Committee and NICE. But
the linked-evidence approach comes with
drawbacks. As Merlin T (2014)9 point out, the
main limitation is finding evidence to support
all areas of the linkage and to ensure that there
is transferability of populations, tests, biomarker
definitions and outcome criteria between each
linked piece of evidence, particularly when
used in economic modeling. Merlin gives as
example the assessment of EGFR-TK (Epidermal
growth factor receptor tyrosine kinase) testing
by NICE under the diagnostics assessment program
where ten EGFR-TK testing methods were
compared10: two Food and Drug Administration
(FDA)-approved and Conformité Européenne
(CE)–marked tests, one only CE-marked, five
laboratory developed test (LDTs), and two test
strategies combining a CE-marked test and a
LDT. Three modeling methods were used to
estimate the cost-effectiveness of the different
tests: a comparative effectiveness analysis, a
linked-evidence analysis and an ‘’assumption of
equal prognostic value’’ analysis that included
the tests for which the costs and/or technical
performance was available only from an online
survey of the National Health Service laboratories
in England and Wales. The accuracy estimates
used in the linked-evidence model were
considered unreliable as they were sampled
from different populations, using different
testing methods and having different levels of
diagnostics accuracy. The agency considered
that the CEA was not sufficiently robust but
they did recommend three tests in spite of all
the uncertainties: the Sanger sequencing based
methods and the two FDA-approved tests: the
cobas®EGFR mutation test and the therascreen
EGFR RGQ PCR kit. In Australia, the MSAC
recommended the cobas test.
HTA bodies and payers have much experience in the assessment of drugs, but the addition of a diagnostic test is challenging. A clear evaluation framework for the joint assessment of CDx-Rx is lacking and would help provide guidance for HTAs and economic evaluation.
The market of companion diagnostic drug pairs (CDx-Rx) is currently worth
approximately $42 billion and is expected to increase to over $60 billion by 2019.
33
CO
GN
OS
CIE
NT
I
and reimbursement processes as mentioned
before, but also according to markets, which
fragment reimbursement processes. Moreover,
there can be national, regional and local frag-
mentation of reimbursement decisions within
a country making it even more difficult for
manufacturers to design a study that can meet
all of the data needs for regulators and all
payers on a global scale. Stakeholders do not
incur the same burden related to the CDx.
As Payne K and Annemans L (2013)11 stated,
CDx-Rx pairs offer an opportunity cost, and
decision makers need information on areas
in which costs will be saved or reallocated.
The impact on the capacity to provide the
test and the associated service requirements
has become an issue. This situation creates
challenges mostly for accessibility of the
CDx in clinical practice (which may be
replaced by LDTs), but sometimes it will
impact the uptake of the drug. For example,
in Canada, a publicly-funded healthcare system,
funding decisions for genetic tests are made
at the provincial level and decisions may vary
across jurisdictions. As the Canadian Agency
for Drugs and Technologies in Health (CADTH)
related in their Environment Scan on CDx-Rx
(2014)12, some provinces may not have dedicated
processes in place to review, fund, and
implement such tests.
Thus, these situations may result in increased
pressure on individual hospitals to evaluate
and offer new genetic tests, but when the local
decision is made to offer the test, usually it is
done without additional funding. We see a lot
of ‘’manufacturer-pay-for-testing scenarios’’
for CDx in Canada and it is unknown how this
trend will progress.
The ‘’too high ICER’’ trend
Another factor that is influencing reimbursement
of precision medicine, and which has also been
raising issues among decision-makers, is the
high premium of targeted drugs. The cost of
the Rx is an impactful value driver in the overall
value of CDx-Rx pair. In a context of budget
constraints and steadily increasing healthcare
costs, it is not unusual for HTA bodies to defer
Regulators and payers have different decision drivers and evidentiary needs but commonly receive the same evidence for assessment. This leads to evidence translation problems and evidence gaps, leaving them to rely on assumptions which lead to uncertainties. Avenues for new evidence generation and harmonization are required.
What value drivers’ parameters should be
included in CEA for CDx appraisal?
In addition to input assumptions and uncertainty
issues in the economic modeling due to lack
of direct evidence or further evidence gaps,
other modeling challenges exist with CDx
assessment. One of these challenges is modeling
with different value drivers’ parameters that
can impact the overall value of the CDx. There
is currently only limited harmonization on
the CDx parameters that should be assessed,
amplifying the necessity for clear guidance.
Looking at existing guidance and commentaries
in reports from assessments made by HTA
agencies for CDx, parameters of importance
that should be considered in economic
modeling are the following:
l Test-related costs;
l Test performance characteristics (e.g.
accuracy, economic consequences of false
positives and false negatives, predictive
value, clinical utility);
l Real biomarker prevalence;
l Diagnostic suitability;
l Clinical management and implementation
strategy (e.g. infrastructure to support
testing and samples collection practices,
current local laboratory platform, etc.) as
well as associated resource utilization.
New evidence requirements related to these
value drivers are emerging for CDx assessment.
HTA evaluators generally rely on a ‘’test and
treat’’ vs ‘’no test’’ economic model where the
clinical management and the costs and health
outcomes in both situations are evaluated. But
if most of these parameters are not integrated
or considered, the model and assessment may
fail to fully capture all relevant health and
economic outcomes.
Reimbursement fragmentation
The uneven reimbursement landscape across
jurisdictions is also problematic due to a lack
of standardization in regulatory, coverage and
reimbursement processes, from country to
country. Evidentiary standards and decision
criteria differ not only for market authorization
or reject applications based on an unacceptable
ICER, and several favourable recommendations
necessitate a price reduction. The situation
has been trending in oncology. In Canada for
example, of the 26 submissions recommended
from the Pan-Canadian Oncology Drug
Review between May 2011 and April 2014,
nineteen (73.1%) had price reduction requests
and only two were accepted without conditions13.
The problem of high pricing is not new but
it has been on the rise for targeted drugs in
oncology, and can be expected to recur
with the recent availability of CDx-Rx pairs
with high premiums (e.g. Zelboraf, Xalkori).
Multidrug regiments with these new targeted
drugs and expansion to other indications after
approval (e.g. Gleevec) impose an increasing
burden and concerns for payers. More
reimbursement conditions or arrangements
(e.g. performance-based risk-sharing arrangements,
coverage by evidence development), stronger
evidentiary support and a clearer codependent
proposition value are required by payers that
must cope with budgetary constraints. This
will require manufacturers to adjust to these
demands and develop early robust co-development
strategies with strong biomarker science,
appropriate trial designs and implementation
strategies, etc.
How could the requirements of diverse
stakeholders be aligned?
All these challenges highlight the need for all
stakeholders to change their approach in order
to better align combined assessment. Manufacturers
may have to adjust to enable the development
of the evidence needed for both regulatory
and reimbursement assessments from the
earliest stages of development and to better
communicate their proposition value to
agencies. This may require the conduct of
different or more complex study designs.
HTA bodies of major global markets need to
provide formal and clear guidance to assess
CDx and CDx-Rx pairs in an effort towards
harmonization and standardization. Australia
is an example that should inspire other HTA
agencies with the establishment of joint
35
CO
GN
OS
CIE
NT
I
Marie-Pierre Dubé is Associate Professor in the
Department of Medicine at the Université de Montréal.
She is the Director of the Pharmacogenomics Centre
at the Montreal Heart Institute where she leads clinical
research projects in personalized medicine. Dr. Dubé
completed a Ph.D. in genetics at McGill University and
post-doctoral studies in public health at University of
Toronto. She worked at Xenon Pharmaceuticals before
taking her current academic position. Dr Dubé has
authored over 110 peer-reviewed articles.
Anick Dubois, is the Director of personalized medicine
implementation at CEPMed, the Center of Excellence
in Personalized Medicine of the Pharmacogenomics
Center at the Montreal Heart Institute where she is
looking at socioeconomic benefits and translation of
personalized medicine as well as developing,
coordinating or managing projects. Dr Dubois holds
a Ph.D. in Pharmaceutical Sciences from the University
of Montreal. Prior to CEPMed, she worked as program
manager at Génome Québec and as Vice-Director of
R&D at Seryx Signature Genetics.
T
References
1. http://www.prnewswire.com/news-releases/personalized-medicine-targeted-therapeutics-and-companion-diagnostic-market-to-2019---strategic-analysis-of-industry-trends-technologies-participants-and-environment-300114875.html; consulted July 20th 2015.2. http://www.phrma.org/sites/default/files/pdf/pmc-tufts-backgrounder.pdf 3. http://www.personalizedmedicinecoalition.org/Userfiles/PMC-Corporate/file/2014-fda-approvals-personalized-medicine2.pdf4. http://www.imshealth.com; consulted July 20th 2015. 5. http://www.palmettogba.com/palmetto/MolDX.nsf/DocsCatHome/MolDx; consulted July 28th 2015.6. Australian Government Department of Health. Framework for evaluating co-dependent technologies for a reimbursement decision: Additional file 1. Canberra: Commonwealth of Australia; 2010 Sep 16.7. Guide to the methods of technology appraisal 2013 [Internet]. London: National Institute for Health and Care Excellence; 2013. Available from: http://publications.nice.org.uk/guide-to-the-methods-of-technology-appraisal-2013-pmg9/the-reference-case.8. Jönsson B. Technology assessment for new oncology drugs. Clinical Cancer Research. 01 Jan 2013;19(1):6-11.. 9. Merlin T. 2014. The use of the ‘linked evidence approach’ to guide policy on the reimbursement of personalized medicines. Personalized Medicine (2014) 11(4), 435–448.10. National Institute for Health and Care Excellence. EGFR-TK mutation testing in adults with locally advanced or metastatic non-small-cell lung cancer. NICE diagnostics guidance 9, National Institute for Health and Care Excellence, Manchester, UK, 46, (2013).11. Payne K, Annemans L. Reflections on market access for personalized medicine: recommendations for Europe. Value in health: the journal of the International Society for Pharmacoeconomics and Outcomes Research. Sep-Oct 2013;16(6 Suppl):S32-38.12. Canadian Agency for Drugs and Technologies in Health. Pharmaceuticals Requiring Companion Diagnostics. Environmental Scan. Issue 47. Ottawa, ON, 2014.13. Rawson N. Has pCODR Improved Access to Oncology Drugs? Timeliness and provincial acceptance of pan-Canadian Oncology Drug Review recommendations. 2014:30.14. http://www.prnewswire.com/news-releases/qiagen-announces-first-ever-regulatory-registration-of-a-lung-cancer-companion-diagnostic-based-on-liquid-biopsies-288226911.html; consulted July 28th 2015.15. Marrone M et al. Multi-marker Solid Tumor Panels Using Next-generation Sequencing to Direct Molecularly Targeted Therapies. PLoS Curr. 2014 May 27; 6.16. https://www.whitehouse.gov/the-press-office/2015/01/30/fact-sheet-president-obama-s-precision-medicine-initiative; consulted February 10th 2015.
applications and reviews with coordinated
advice for the Rx and the CDx. Evidentiary
requirements and standards for reimbursement
decision-making need to be clarified
and aligned with marketing authorization
requirements within a country to optimize
process efficiency and enable uniformity of
outcomes. Interagency collaborations and
coordination is important to determine and
harmonize necessary requirements for both
regulators and payers. Health economic
evaluation as early as the development phase
could help to identify the most valuable
information in an attempt to reduce uncertainty
in CEA. These potential solutions to enable a
better appraisal of CDx-Rx pairs, are summarized
in Table 2.
Such challenges do present themselves with
the “one CDx, one Rx” paradigm. Convincing
global payers and assessing the value of CDx
will become more challenging as possibilities
enabled by advances in technology and their
potential applications increase. In January 2015,
the therascreen EGFR Plasma RGQ PCR Kit
(CE-marked) using blood samples instead of
tissue samples was launched as the first “liquid
biopsy” for patients in whim surgical biopsies
were not assessable14. Multi-biomarker panels
(e.g. including EGFR, BRAF, KRAS mutations
and multiple other common markers) for
selecting one or multiple targeted-oncology
drugs have been or are being developed
(mostly LDTs) using next generation sequencing
(e.g. SuraSeq™NGS, Foundation One™) or
other multiplex technology15. The 2015, $215
million Obama Precision Medicine Initiative16
is a hallmark of the end of the traditional
one-size-fits-all drug model. Precision medicine
is leading the way toward the future of
healthcare. Regulators, HTA bodies, payers
and decision-makers should all work together
to be prepared to assess the value of the new
codependent technologies that will result
from these advances, and have clear and
aligned requirements for manufacturers to
better satisfy their needs.
Table 2 Potential solutions enabling better co-value appraisal of CDx-Rx pairs
Multi-stakeholders efforts
HTAs joint applications/review and guidance for CDx-Rx co-assessment
Manufacturers to improve combined value proposition and provide stronger evidentiary support
Joint advice, harmonize review and requirements for regulators and payers (within a country)
Identify parameters (value drivers) of CDx to be included/considered in economic modeling
Better Harmonize HTAs requirements and standards
Interagency collaborations and coordination