Perspectives From Oncologists, Pathologists, and Payers ......Welcome to The Precision Oncology Annual Trend Report: Perspectives From Oncologists, Pathologists, and Payers, Fourth

Novartis Oncology

The Precision Oncology Annual Trend Report Perspectives From Oncologists, Pathologists, and Payers

Fourth Edition

Table of Contents

Foreword 3

Introduction 4

Methodology 5

Market Trends and the Evolution of Precision Oncology 8

Influencers of Utilization and Coverage 10

Cost Effectiveness 24

The Future 25

Precision Medicine Programs 28

References 30

THE PRECISION ONCOLOGY ANNUAL TREND REPORT, FOURTH EDITION | 3

ForewordThe promise of personalized medicine—to improve patient outcomes while also reducing overall costs by making health systems more efficient—rests on a simple assumption. By basing therapeutic decisions on increasingly sophisticated diagnostic tests, physicians can determine which medical treatments, especially in oncology, will work best for each patient and, in turn, develop targeted treatment and prevention plans that are tailored to individual patients.

Unfortunately, facilitating the adoption of personalized medicine—moving it from concept to the clinic—is anything but simple. As the Personalized Medicine Coalition has documented in “Strategies for Integrating Personalized Medicine into Health Care,” published in Personalized Medicine last year, it requires educating multiple stakeholders, empowering patients, demonstrating value, managing clinical information, and, especially, ensuring access to new diagnostics and treatments. Without coordinated strategies among distinct medical constituencies, patients will not benefit from the rapid new breakthroughs in science and medicine as quickly as we would like.

As the trend toward precision or personalized medicine in oncology continues, coordination of all health care stakeholders has become more important than ever. Oncologists, pathologists, and payers must work with pharmaceutical and diagnostic companies to develop products, services, and coverage policies that improve patient outcomes and, as we have begun to see, lower overall health care costs for institutions that put personalized regimens in place.

By providing insightful survey data, The Precision Oncology Annual Trend Report: Perspectives From Oncologists, Pathologists, and Payers, Fourth Edition, underlines this essential point. The report provides decision makers with useful information on how oncologists, pathologists, and payers view the rapid changes in cancer care now and how these three constituencies also understand what needs to happen to accelerate the movement away from one-size-fits-all/trial-and-error treatment to one that is personalized and preventive.

In addition, this year’s report highlights exciting scientific developments, including:

• A new biomarker microsatellite instability-high (MSI-H) or deficient mismatch repair (dMMR)—which has led to the first cancer treatment with a biomarker indication without reference to a tissue of origin

• Genomic sequencing, which has the potential to make individual biomarker diagnostic testing obsolete, monitor the efficacy of treatment over time, and identify therapeutic approaches based on molecular pathways rather than the patient’s tumor type

• Circulating tumor DNA (ctDNA), known as “liquid biopsy,” which enables genomic sequencing of a patient’s cancer via a blood sample instead of tissue biopsy

This is an exciting moment in the evolution of precision oncology. Increased understanding of what cancer is and the development of new diagnostic tools to analyze it provide more hope for patients. The challenge for oncologists, payers, and pathologists is to work together to ensure alignment among testing, treatment decision making, coverage, and payment so that integrated precision medicine programs underpin the treatment of all cancer patients in the future.

Edward Abrahams, PhDPresidentPersonalized Medicine Coalition

4 | THE PRECISION ONCOLOGY ANNUAL TREND REPORT, FOURTH EDITION

IntroductionWelcome to The Precision Oncology Annual Trend Report: Perspectives From Oncologists, Pathologists, and Payers, Fourth Edition. Developed to provide updated information on the use of precision medicine in oncology, this report provides insights into the trends affecting utilization and coverage of predictive biomarker tests.

The future of precision oncology hinges on the development of valid biomarker tests. The quality and outcomes of patient care may improve through the use of predictive biomarker tests and companion diagnostics (CDx). Cost effectiveness may improve when treatment is stratified to patients with genetic biomarkers. Genomic sequencing has the potential to enable widespread utilization of precision oncology to determine treatment independent of a patient’s tumor type.

This year’s report includes the introduction of new biomarkers (eg, MSI-H), new technology (eg, ctDNA), and new initiatives (eg, the GRAIL study) that have advanced the treatment of cancer.

Recognizing and understanding current trends in precision medicine can help us all continue to make progress toward improving outcomes. This report encourages payers to fully evaluate the impact of diagnostic coverage for the appropriate use of therapeutics and to promote broader biomarker test utilization, including the latest technologies to improve health and lower overall costs.

This is the fourth edition of The Precision Oncology Annual Trend Report. Novartis continues to produce this report as an annual service to the oncology community and to shed light on the developing impact and utilization of biomarkers with the aim of accelerating adoption of biomarker testing in precision oncology. This report and the overview of the potential benefits, coverage, and utilization of precision medicine in oncology provide a timely snapshot of this rapidly evolving new clinical paradigm.

“Personalized medicine is absolutely exploding...As we look at value in terms of not just incremental but significant improvements in survival, especially given the cost of the drugs, the biomarker is really helping to differentiate who we treat and with what so we can all derive the value from these high-cost therapies or combination therapies.”

– Payer


MethodologyPrimary research for this report consisted of data obtained between July 2017 and October 2017 through a Web-based survey. In addition, qualitative, in-depth interviews were conducted with providers (ie, oncologists and pathologists) and individuals from commercial health plans (ie, medical directors and pharmacy directors) who are familiar with their company’s current coverage of predictive oncology biomarkers. All surveys and in-depth interviews were conducted anonymously.

The report provides data on the following:

• Market trends and the evolution of precision oncology

• Influencers of utilization and coverage

• Current and anticipated predictive biomarker utilization and coverage

• Predictive biomarkers as drivers of precision oncology therapy cost effectiveness

• New technology, including genomic sequencing panels (GSPs)

For the purpose of the market research study, an oncology predictive biomarker and/or companion diagnostic was defined as a biomarker test that determines the likely benefit from a specific targeted therapeutic treatment. A prognostic biomarker was defined as a test that provides information on the likely outcome of the cancer (ie, risk for progression).1 The research did not look at the use of prognostic biomarkers. While considered important tools in determining the aggressiveness of the disease that may indirectly influence treatment, they do not directly influence choice of a specific therapeutic agent.

The payer respondents in the 2017 survey (Figure 1) were equally split between medical directors (25) and pharmacy directors (25). This was very similar to the payer respondent demographics in last year’s report.

Pharmacy director

Medical director

Figure 1 | Payer Respondent Job Title

62%

38%

50%

50%

0 10 20 30 40 50 60 70

2017 2016

N=50 payers.


Provider Demographics

The providers (oncologists and pathologists) in this study are highly active in clinical practice (>90% of time) and representative of diverse geographic locations across the United States (Figure 2). The oncologists’ practice site locations segmentation is similar to last year’s report (50% independent community based, 40% hospital affiliated, and 10% academic cancer center). This year, however, all of the pathologists who participated in this study worked in a hospital-affiliated practice (Figure 3). In 2016, 76% of pathologists worked in the hospital setting and 24% in a community or commercial setting. Variances in the pathologist data versus last year may be attributed to this change in demographics.

Midwest

West

South

Figure 2 | Provider Practice Location

14%

24%

36%

18%

20%

36%

Northeast 32%

20%

0 5 10 15 20 25 30 35 40

Oncologists Pathologists

N=50 oncologists, 25 pathologists.

Independent community- based practice

practice

Academic cancer center

Figure 3 | Provider Site of Care

50%

0%

40%

100%

10%

0%



0 10 20 30 40 50 60 70 80 90 100


Payer Demographics

All payer study participants hold either medical or pharmacy director positions and are responsible for direct decision making as it pertains to coverage for oncology predictive biomarkers, companion diagnostics, and GSPs. Study participants work in large- (52%), medium- (18%), and small-size plans (30%), and all geographic coverage regions are represented. Payer plan member lives are covered by managed Medicare (63%) and managed Medicaid (37%), with a majority of plans (64%) offering medical and pharmacy benefits (Figures 4-7).

Figure 7 | Payer Medical and Pharmacy Benefits Distribution

N=50 payers.

15%

21%64%

Medical and pharmacy benefits

Pharmacy benefit only

Medical benefit only

Figure 6 | Payer Coverage of Managed Medicare and Medicaid

N=50 payers.

37%

63%

Managed Medicare

Managed Medicaid

Figure 5 | Payer Coverage by Region

West

Midwest

Northeast

South

National

N=50 payers.

16%28%

16%

20% 20%

Payer Plan Size by Number of Lives Managed Annually

Figure 4 |

30%

52%18%

Small (400,000 or less)

Medium (400,001 to 999,999)

Large (1 million or more)

N=50 payers.


Market Trends and the Evolution of Precision OncologyPD-L1 Biomarker Testing for Patients With Non-Small Cell Lung Cancer (NSCLC)

Providers’ approach to the utilization of PD-1 and PD-L1 biomarkers remained unchanged over the course of the last year, with the exception of the belief that all patients should have their tumor biopsied and undergo biomarker testing for PD-L1. Pathologists who strongly agreed with this approach increased by 225% in 2017 with 52% of pathologists in strong agreement. Oncologists, however, were less inclined to agree with this approach. In 2017, only 30% of oncologists strongly agreed with this approach compared to 50% in 2016 (Figure 8).

Figure 8 | Provider Comments on PD-1 and PD-L1 Biomarkers: Percent Who Strongly Agree

All patients should have their tumor biopsiedand undergo biomarker testing for PD-L1

PD-L1 biomarker tests are not su�cientlypredictive to select patients for a PD-1 inhibitor

I prefer a PD-1 inhibitor that does not require a tumor biopsy

I prefer a PD-1 inhibitor that does not require PD-L1 biomarker test for reimbursement

A PD-1 inhibitor should only be used in patients positive for PD-L1 expression

30% (+0%)

20% (+150%)

28% (+8%)

26% (-13%)

30% (-40%)

52% (+225%)


26% (+30%)28% (-13%)

8%

12%

0 10 20 30 40 50 60


(Top 2 Box Score)


PD-1 Inhibitor Coverage Based on PD-L1 Biomarker Status

Payers utilizing a step-therapy approach for PD-1 inhibitor coverage based on PD-L1 biomarker status has evolved over the last year. Currently, 54% of payers reported using this approach for first- and second-line NSCLC as compared to only 16% in last year’s report (Figure 9). During the payer in-depth telephone interviews, medical directors stated that the reason many are using this approach is because their pathways and/or guidelines place Keytruda® (pembrolizumab) before Opdivo® (nivolumab) based on the drugs’ labelling.

No

Currently evaluating in 2nd-line NSCLC

Currently evaluating in 1st-line NSCLC

Yes, for 2nd-line NSCLC

Yes, for 1st-line NSCLC

N=50 payers.

20%

Figure 9 | Payers Using a Step-Therapy Approach to PD-1 Inhibitor Coverage Based on PD-L1 Biomarker Status

24%

34%28%

20%

“The insurance companies drive decision making for PD-1 and PD-L1 products in lung cancer. They are very clear that unless you’ve got greater than 50% PD-1 expression, don’t think about using Keytruda first line because they will not cover it. That’s the approved indication. The insurance companies are very scrupulous in making sure that if I’m ordering something, I have the results of the test justifying an approved indication.”

– Oncologist


Influencers of Utilization and CoverageThe following trends are impacting utilization:

• The US Food and Drug Administration (FDA) continues to push regulatory strategies for drug/diagnostic codevelopment and oversight2,3

– Approximately two-thirds of the breakthrough therapy designations granted by the FDA include diagnostic assays2

– Regulatory oversight of laboratory-developed tests (LDTs) was announced in July 20143

• Patients are interested in the potential benefits of personalized/precision oncology, as evidenced by enrollment in prospective clinical trials stratified by cancer genomics methods and large molecular screening initiatives4

• Commercial payers are becoming increasingly involved in the design of clinical trials in which biomarker tests are utilized5

For oncologists and pathologists, the 5 most pressing concerns when ordering a biomarker test remained the same this year compared to 2016: cost, lack of clinical utility data, reimbursement, obtaining insurance authorization, and lack of evidence-based guidelines. For oncologists, cost of the test has become the top concern (33% increase over 2016). For pathologists, concerns over lack of clinical utility data and obtaining insurance authorization have increased over last year (58% and 67%, respectively). Oncologists are also more concerned with their lack of familiarity when ordering a test (36%), an increase of 100% versus 2016 (Figure 10).

Cost

Lack of clinical utility data

Reimbursement

Obtaining insuranceauthorization

Lack of evidence-basedguidelines

Complexity of testingprocess

Lack of familiarity

Delay in care waitingfor test results

44% (-15%)56% (+33%)

42% (-5%)60% (+25%)

60% (+67%)

48% (-11%)76% (+58%)

38% (-21%)

40% (-23%)

36% (+100%)20% (0%)

36% (+13%)24% (+20%)

28% (+27%)20% (0%)

56% (-18%)

Figure 10 | Provider Concerns When Ordering a Biomarker Test



0 10 20 30 40 50 60 70 80

(Top 2 Box Score)


Changes in providers reporting on the use of pathways and/or guidelines from payers with respect to the use of biomarkers changed in 2017 versus 2016.

Specifically, oncologists and pathologists reported using pathways/guidelines more frequently this year for prognostic biomarkers (36% and 32%, respectively) and less frequently for GSPs (12% and 24%, respectively) (Figure 11).

It should be noted that changes in the pathologists’ reporting in 2017 are most likely attributed to changes in the sample demographics. For example, this year the sample is predominantly hospital-based pathologists (100%) versus a mix in 2016 of hospital-based (76%) and community/commercially based pathologists.

Figure 11 | Percent of Providers Using Pathways and/or Guidelines From Payers

0 10 20 30 40 50 60

Yes for oncology predictive biomarkers and/or companion diagnostics

Yes for GSPs

No, we do not use pathways and/or guidelines from payers on the use of oncology predictive

biomarkers, companion diagnostics, GSPs, and/or prognostic biomarkers

48% (-4%)

52% (-13%)

36% (+38%)32% (+100%)

12% (-33%)

24% (-71%)

44% (+5%)

44% (+22%)

Yes for prognostic biomarkers



(Percent Using)

New Predictive Biomarkers: MSI-H, dMMR

• Biomarkers: microsatellite instability-high (MSI-H) or deficient mismatch repair (dMMR)6

• Test: Immunohistochemistry (IHC)6

• Importance: Nivolumab and pembrolizumab have new approved indications7,8

– Nivolumab—metastatic colorectal cancer

– Pembrolizumab—any tumor type

• Why this is important: Pembrolizumab is the first cancer treatment with a biomarker indication without a defined tumor type8


Participation in alternative payment models rose to significant levels in 2017.

Provider organization membership to alternative payment models in 2017 continues to grow. Oncologists’ participation is highest in the Physician Quality Reporting System (PQRS) and the Quality Oncology Practice Initiative (QOPI), in which 36% and 30% of study participants belong, respectively. For pathologists, membership is highest in the PQRS and accountable care organizations (ACOs), with 80% and 36% of study participant membership. It’s important to remember that any dramatic changes to the pathologist data (eg, 50% decrease in QOPI participation) are likely attributed to changes in the sample demographics and small sample size (Figure 12).

Figure 12 | Providers Currently Participating in QOPI or Alternative Payment Models

Physician Quality Reporting System (PQRS)

Quality Oncology Practice Initiative (QOPI)

Oncology care model(OCM)

Commercial payer episodic care model

36% (+38%)

80% (+11%)

24% (+50%)

36% (+50%)

24% (+100%)

12% (+100%)

16% (+60%)

20%

Patient-centered medical home (PCMH)

14% (+40%)

24% (50%)

30% (+88%)

8% (-50%)

Accountable care organization (ACO)



0 10 20 30 40 50 60 70 80 90

(Percent Participating)


Oncologists and pathologists utilize third-party support to guide use or pathway development for oncology predictive biomarkers.

Oncologists and pathologists both utilize third-party information, most commonly the National Comprehensive Cancer Network® (NCCN®) Clinical Practice Guidelines in Oncology (NCCN Guidelines®), in their development of pathways for the use of oncology predictive biomarkers (Figure 13).

Figure 13 | Provider Use of Third-Party Information for Pathway Guidance

Utilize the NCCN biomarker compendium category evidence level 2A and 1

Utilize NCCN evidence blocks

Utilize ASCO value framework

Managed by contracted consultant or benefit management company

52%

60%

34%56%

30%

12%

20%

44%

42%

80%

Monitor and incorporate guidance issued by professional and regulatory

organizations; ie, ASCO, AUA, AACR, FDA, CAP



0 10 20 30 40 50 60 70 80 90

(Top 2 Box Score)

“I make the decision along with the pathologist about what to test. As long as it appears within the ASCO guidelines and NCCN Guidelines, we are good.”

— Hospital-based oncologist

AACR, American Association for Cancer Research; ASCO, American Society of Clinical Oncology; AUA, American Urological Association; CAP, College of American Pathologists; FDA, US Food and Drug Administration.


Oncologists and pathologists agree on the top 2 factors that influence selection.

For oncologists and pathologists, there was no change versus last year in the top 3 factors that are important in the selection of a oncology predictive biomarker, CDx, or GSP: the test has predictive power to identify treatment responders/nonresponders, the test is recommended in patient-relevant guidelines, and the test is mandated in the therapeutic’s FDA labelling. Some other metrics experienced significant growth in importance over prior years; specifically, for oncologists, the QOPI metric requirement (325% growth). For pathologists, the importance of the cost effectiveness for the diagnostic test grew 86% (Figure 14).

Predictive power to identify treatment(responders & nonresponders)

Recommended in patient-relevantclinical pathway/guidelines

(ie, payer, health system, NCCN)

Companion diagnostic is mandated in the therapeutic’s FDA labelling

Reimbursement coverage bythe patient’s payer

Pathologist recommendation

Direct cost of diagnostic test(if not covered by payer)

Cost e�ectiveness of the diagnostic test(ie, diagnostic test cost for a patient

population relative to the direct treatmentcost for nonresponding patients)

Quality metric requirement (ie, QOPI measure)

84% (+5%)66% (+0%)

52% (-7%)56% (-13%)

24% (+50%)

48% (+16%)76% (+0%)

38% (+29%)

38% (-5%)

36% (+6%)52% (+86%)

34% (+325%)32% (-20%)

34% (-6%)36% (+13%)

Patient or caregiverrequest for test

Impact on patient satisfaction with treatment

24% (+33%)16% (-20%)

18% (+80%)32% (-38%)

56% (+0%)

Figure 14 | Factors Important to Providers in the Selection of an Oncology Predictive Biomarker, CDx, and/or GSP



0 10 20 30 40 50 60 70 80 90

Percent Important (Top 2 Box Score)


There was no change in the important factors impacting coverage decisions in 2017.

For payers in 2017, the top 3 factors important when making coverage decisions for new targeted therapies remained the same as the last year: improved survival versus current standard of care, direct cost of the therapy, and improved duration of remission (Figure 15).

Improved survival versuscurrent standard of care

Direct cost of therapy

Improved duration of remission(ie, progression-free survival)

Overall response rate

Direct cost of a predictivebiomarker and/or companion

diagnostic test

Improved side e�ect profileversus standard of care

Quality of the response(partial vs complete vs molecular

complete response)

58%66% (+14%)

66% (+3%)

62% 80% (+29%)

48%

64%

32%46% (+44%)

46%46% (+0%)

32%42% (+31%)

Indirect cost of therapy

Improved quality of life26%

40% (+40%)

30%38% (+27%)

62% (+29%)

Figure 15 |

Factors Important to Payer Coverage Decisions for New Targeted Therapies


2017 2016

0 10 20 30 40 50 60 70 80 90

Percent Important (Top 2 Box Score)


Most organizations reported using third-party guidelines to help guide coverage decisions for oncology predictive biomarkers.

Half of payers reported using third-party guidelines to help guide coverage decisions for oncology predictive biomarkers.

No

Figure 16 | Payer Use of Third Parties to Guide Coverage Decisions for Oncology Predictive Biomarkers

40%

Don’t know10%

14%

32% (-20%)

Yes50%

54% (+8%)

0 10 20 30 40 50 60

N=50 payers.

2017 2016

“Oncology predictive biomarkers have made a huge impact. I think we can spend our resources very effectively. It’s not a one size fits all so I think we have moved so far away from the cytotoxic chemotherapy to more target oriented therapy, which is better tolerated and more effective.”

– Hospital-based oncologist


Payers cite comparative effectiveness as the most important factor influencing biomarker coverage.

Payers deem many factors as important influencers when making coverage decisions for biomarkers. Remarkably, the overall importance of a majority of factors increased this year. Statistically significant growth was noted for comparative effectiveness (58%), mandated in a therapeutic’s FDA labelling (32%), and test performance (46%). This could be a result of payers’ increased attention and understanding of this category (Figure 18).

Genomic sequencing panels lag behind oncology predictive biomarkers, companion diagnostics, and prognostic biomarkers in current coverage.

Payers and providers all report the inclusion of biomarker tests as part of clinical oncology pathways. Pathway inclusion for biomarker tests is highest amongst pathologists in this study, due to their 100% hospital-based practice location (Figure 17).

Figure 17 | Providers and Payers Report on the Current Inclusion of Biomarker Tests as Part of Clinical Oncology Pathways

Oncology Predictive Biomarkers,Companion Diagnostics

Prognostic Biomarkers

GSPs

46% (-8%)

76% (+39%) 50% (-5%)

44% (+76%)

80% (+120%) 40% (+110%)

26% (-61%)

44% (-52%) 32% (-33%)

N=50 oncologists, 25 pathologists, 25 payers.

Oncologists Pathologists Payers

0 10 20 30 40 50 60 70 80 90


Cost e�ectiveness

Test results must change patient management

Inclusion in an external clinical pathway (eg, NCCN)

The need to test many to identify the few who will benefit

Per member per year impact

Unnecessary, nonpredictive tests conducted by research hospitals

Quality metric performance

Overall increased use of diagnostic tests

64% (+33%)48%

50% 48% (-4%)

44% (+38%)

48%52% (+8%)

28%

32%

30%38% (+27%)

24%38% (+58%)

24%34% (+42%)

Increased test complexity

Impact on patient and provider satisfaction 24%

26% (+8%)

24%22% (-8%)

40% (+43%)

Figure 18 | Most Important Factors Influencing Payer Coverage Decisions for Biomarkers

N=50 payers.

2017 2016

0 10 20 30 40 50 60 70 80 90

Comparative e�ectiveness

Mandated in a therapeutic’s FDA labelling

Clinical validity

Test performance (sensitivity, specificity)

Cost

Clinical utility

76% (+58%)48%

64%72% (+13%)

70% (+46%)

56%74% (+32%)

70%

48%

62%66% (+6%)

68% (-3%)

(Top 2 Box Score)


Payer Organizational Approach

A majority of payers (64%) consider not only the cost of the biomarker test, but also the cost offset by the savings from narrower utilization of the associated targeted therapy and the cost offset by the savings due to better outcomes achieved in biomarker patients receiving the targeted therapy when evaluating biomarker coverage and cost effectiveness.

More payers are publishing biomarker coverage guidance.

Payers who reported publishing guidance on biomarker coverage increased by 46% (38%) over 2016 (26%).

Payer Organizational Approach When Evaluating Biomarker Coverageand Cost E�ectiveness

Figure 19 |

18%

64% 10%

(A) Consider only the cost of the biomarker test

(B) Response (A) o�set by the savings from narrower utilization of the associated targeted therapy

(C) Response (A) o�set by the savings due to better outcomes achieved in biomarker-positive patients receiving the targeted therapy

(D) B and C

N=50 payers.

8%

Figure 20 | Percent of Payers Who Publish Biomarker Coverage Guidelines

Don’t know

8%

6%

No

66%

56% (-15%)

0 10 20 30 40 50 60 70

N=50 payers.

2017 2016

Yes

26%

38% (+46%)


Most pathologists do not specify a specific brand of biomarker tests, but they do specify the biomarker plus indication plus technology.

Payers and providers have unique approaches regarding the level of specificity their organization guidelines or pathways provide with respect to biomarker utilization. Payers rely predominantly on biomarker test plus indication whereas providers (oncologists and pathologists) report using biomarker test plus indication plus technology (Figure 21).

Figure 21 | Providers and Payers Report on the Level of Specificity Their Organizations’ Guidelines/Pathways Provide With Respect to Biomarker Utilization

Biomarker + indication(ie, HER2 in breast cancer)

22% (-31%)

4% (-50%) 42% (-32%)

Biomarker (ie, HER2)

24% (+50%)

4% (0%) 11% (0%)

Laboratory name for alaboratory-developed test

2%

4% 0%

Brand name + indication (ie, HERCEPTEST®

[Dako] in breast cancer)

6%

4%11%

Biomarker + indication+ technology (ie, HER2 in breast

cancer by FISH)

36% (+64%)

84% (+40%) 32% (+3%)



0 10 20 30 40 50 60 70 80 90


Coverage of GSPs is somewhat dependent on FDA approval.

Payers report a strong preference to having the availability of prospective clinical trial data in order to make coverage decisions (68%) and coverage by Medicare as strong influencers for GSP coverage decision (60%) (Figure 22).

In most cases, fees for biomarker testing are negotiated with laboratories.

Most payers surveyed (48%) negotiate contracted rates with a lab or restricted network of labs that must be used for the test to be covered. The CMS laboratory fee schedule is also utilized frequently as well (32%), and use increased 45% over the last year (Figure 23).

44% (-15%)

Coverage by Medicare of the oncology GSPs will strongly influence a positive coverage

decision by my company

Prospective clinical trials will be required tovalidate that this technology can accurately

identify patients for specific therapy(s) in order tomake a coverage decision

60%

68% (+13%)

44%

60% (+36%)

Previous clinical trial data done with other singlemutation biomarker tests are su�cient to

support the e�ectiveness and reimbursementof oncology GSPs

The GSP will not be covered unlessapproved by the FDA as a companion

diagnostic for specific therapeutics 52%

28%

34% (+21%)

Figure 22 | Payers Who Stongly Agree With the Following Statements

N=50 payers.

2016 2017

0 10 20 30 40 50 60 70

(Top 2 Box Score)

Figure 23 | Payer Reimbursement Strategies for Predictive Biomakers

Negotiate contracted rates with a lab or restricted network of labs that must be used for the test to be covered

Use the CMS laboratory fee schedule

Set a maximum allowable based on a methodology that reflects the typical amount charged by labs

Other

N=50 payers.

48% (+14%)

2% (+2%)

18%(-36%)

32%(+45%)

CMS, Centers for Medicare and Medicaid Services.


Few payers cover a specific BRAF test for melanoma.

At the time of printing, 4 agents were approved by the FDA for the treatment of patients with advanced melanoma with a BRAF V600E or V600K mutation (2 BRAF inhibitors and 2 MEK inhibitors), yet only 16% of payers specify coverage for BRAF tests that capture both mutations.9

Payer coverage policies for the BRAF biomarker test in melanoma have not changed dramatically over the last year (Figure 24).

(C) Cover only BRAF V600E 14%

16% (+14%)

14%20% (+43%)

(A) Cover all BRAF biomarker tests

(B) Cover only BRAF V600E/K biomarker tests

18%20% (+11%)

16%16% (+0%)

(E) Any of the above and specify by tumor type

Don’t know

(D) Cover only a specific BRAF test(s) (ie, cobas® 4800 BRAF V600 Mutation Test)

34%30% (-12%)

24%14% (-42%)

Figure 24 |

Payer Policies for Coverage of the BRAF Biomarker Test in Melanoma

N=50 payers.

2017 2016

0 10 20 30 40


Table 1 | Percent of Respondents Indicating the Biomarker Is Ordered or Covered

Biomarker Test Oncologists Pathologists Payers

2017 2016 2017 2016 2017 2016

HER2 in Breast Cancer 78% 88% 96% 96% 74% 78%

HER2 in Esophago-gastric Adenocarcinoma

66% 74% 92% 72% 42% 48%

HER2 in NSCLC Adenocarcinoma 18% 22% 40% 44% 48% 56%

KRAS in Colorectal Cancer 70% 70% 80% 96% 62% 70%

KRAS in NSCLC 46% 36% 64% 72% 54% 56%

KIT in GIST 64% 62% 92% 88% 38% 44%

KIT in Melanoma 34% 36% 48% 68% 42% 44%

BCR-ABL in CML 78% 62% 96% 76% 50% 48%

KIT D816V 24% Not Asked 32% Not Asked 36% Not Asked

PML-RARa in Acute Promyelocytic Leukemia

62% 58% 88% 64% 40% 28%

FLT3 in AML 60% 58% 76% 40% 42% 36%

17P Deletion in CLL 70% 74% 80% 56% 48% 56%

EGFR in NSCLC 74% 74% 88% 92% 58% 52%

EGFR in Colorectal Cancer 38% 40% 40% 52% 56% 56%

EGFR cfDNA “Liquid Biopsy” 46% 16% 24% 16% 38% 32%

ALK in NSCLC 76% 72% 96% 84% 44% 50%

MET in NSCLC 32% 30% 40% 36% 44% 40%

BRAF in NSCLC 40% 36% 40% 44% 54% 70%

BRAF V600E/K in NSCLC 36% 26% 44% 36% 44% 52%

BRAF in Melanoma 70% 78% 92% 80% 64% 56%

BRAF V600E/K in Melanoma 68% 70% 88% 76% 54% 50%

PD-L1 in Melanoma 52% 40% 44% 40% 52% 48%

PD-L1 in NSCLC 70% 52% 84% 52% 54% 44%

MEK1 in NSCLC 36% 16% 12% 8% 46% 38%

PIK3CA in NSCLC 12% 12% 24% 12% 36% 28%

ROS1 in NSCLC 66% 60% 64% 52% 34% 32%

PDGFRB in MDS 16% 32% 28% 24% 36% 30%

BRACA 1/2 in Breast Cancer 76% 72% 72% 72% 62% 56%

Oncotype DX in Breast Cancer 68% 76% 88% 72% 56% 48%

5-50 Gene Solid Tumor Genomic

Sequencing Panel (CPT 81445) 26% 16% 24% 28% 28% 26%

51+ Gene Solid and Hematologic Tumor Genomic Sequencing Panel (CPT 81455) 24% 16% 36% 24% 26% 24%

Academic Genomic Sequencing Panels 18% 8% 24% 20% 32% 14%

Commercial Lab Genomic Sequencing Panels 46% 26% 36% 40% 34% 22%

Microsatellite Instability-High (MSI-H) 68% Not Asked 88% Not Asked 32% Not Asked

Mismatch Repair Deficient (dMMR) 60% Not Asked 64% Not Asked 32% Not Asked



Cost EffectivenessPayers report being very engaged in evaluating or planning to evaluate the impact and cost effectiveness of oncology biomarker tests.

All 3 respondent groups are currently conducting analysis on the overall effectiveness of biomarkers. All respondent groups also report that their organizations plan to conduct this type of analysis over the next 12 months (Figure 25).

Figure 25 | Provider and Payer Intent to Conduct Overall Cost-E�ectiveness Analysis on Oncology Predictive Biomarker Use

No plan to conduct Don’t know

16% (+0%) 28% (+75%) 44% (-21%) 12% (0%)

14% (-59%) 2% (69%)54% (+42%)30% (+36%)Payer

Pathologist

52% (+63%) 20% (-50%) 10% (-17%)18% (+13%)Oncologist

Currently conducting Plan to conduct in the next 12 months

0 10 20 30 40 50 60 70 80 90 100



The FutureMore oncologists agree that lab-developed tests are very effective.

Since 2016 there was a 133% increase in the percent of oncologists (28%) who strongly agree that LDTs are currently very effective and can be utilized for clinical decision making without further regulation.

Figure 26 | Provider and Payer Comments on LDTs

A nongovernmental professional organization should set standards for predictive biomarker LDTs by requiring

LDTs to meet in vitro performance criteria (ie, false +ve,false -ve) vs a standard, FDA-approved biomarker test

The short-term costs for increased biomarker-baseddiagnostic testing is worth the potential

long-term savings

LDTs are currently very e�ective and can beutilized for clinical decision making

without further regulation

32% (+23%)

32% (-20%) 38% (+12%)

Precision medicine and biomarker developers needto collaborate on the development of outcomes data for

oncology predictive biomarkers related to their products

54% (+0%)

76% (+0%)

68% (+26%)

32% (+14%)

28% (-36%) 48% (+26%)

The FDA should regulate predictive biomarkerLDTs by requiring LDTs to meet in vitro

performance criteria (ie, false +ve, false -ve)vs a standard, FDA-approved biomarker test

The FDA should regulate predictive biomarkerLDTs by requiring clinical outcomes data

to prove the e�ectiveness of each LDT

42% (-25%)

44% (-15%) 58% (-12%)

42% (-19%)

40% (-33%) 60% (-6%)

28% (+133%)

24% (+50%) 30% (+67%)



0 10 20 30 40 50 60 70 80

Percent Who Strongly Agree (Top 2 Box Score)


Next-Generation Sequencing

Next-generation sequencing (NGS), or massively parallel sequencing, is a method of arranging millions of DNA fragments simultaneously to create a large collection of individualized patient data. Cancer-causing genes are sequenced all at once.10

NGS has the potential to change how CDx testing is performed. Instead of ordering tests to evaluate a patient prior to the use of one specific drug, genetic screens using NGS could be performed at diagnosis to identify biomarkers and guide treatment decision making for multiple drugs.5

Treatment efficacy over time may also be monitored by NGS. For example, a patient with lung cancer may benefit from regular screenings for a dominant epidermal growth factor receptor mutation. The screening results can show whether or not the current treatment is working effectively.11

NGS may also assist with clinical decision making and identify treatment approaches for which no established protocols exist.12

Widespread adoption of genomic sequencing is likely to increase in the future.

Less than half of oncologists and one-quarter of pathologists in this study strongly agreed in 2017 that inclusion of NGS or GSPs into internal or third-party guidelines or pathways would preclude use.

I would wait for FDA approval before utilizing an NGS or GSP to profile all solid and liquid tumor biopsies

I would wait for inclusion into NCCN, payer, or my organization’sguidelines/pathways before utilizing an NGS or GSP

to profile all solid and liquid tumor biopsies

46% (-4%)20% (-62%)

42% (+24%)28% (-30%)

I am not waiting for results of these studies; I am currently utilizing an NGS or GSP to profile all solid and liquid tumor biopsies

I am currently utilizing an NGS or GSP to profile all solid and liquid tumor biopsies

26% (-28%)52% (+63%)

22% (+120%)8% (0%)

Figure 27 | Provider Comments on NGS


0 10 20 30 40 50 60


Strongly Agree (Top 2 Box Score)


The cost threshold of NGS has fallen since 2016.

A majority of oncologists (62%) and pathologists (72%) agree that the price threshold of NGS is when it becomes comparable to a single biomarker predictive test and/or companion diagnostic test. A majority of payers in this study (42%) had a higher price threshold comparable to 2 to 4 single biomarker predictive tests and/or companion diagnostic tests (Figure 28).

Circulating Tumor DNA

• Represents a “liquid biopsy” alternative, enabling sensitive and serial sampling to be taken during treatment13

• Provides the earliest measure of treatment response13

• NGS assays based on circulating tumor DNA are more sensitive compared to imaging technologies used to monitor recurrence11,13

• The FDA approved the cobas® EGFR Mutation Test v2, a blood-based CDx for Tarceva® (erlotinib) on June 1, 2016. This is the first FDA-approved blood-based genetic test that can detect EGFR gene mutations in NSCLC patients. EGFR mutations are present in an estimated 10% to 20% of NSCLC

Liquid Biopsy Updates

Recently FDA approved: cobas EGFR Mutation Test14

Pending: Guardant360® local coverage determination for its molecular diagnostic assay15

GRAIL: One of the largest genomics-focused clinical studies designed for early detection of cancer before symptoms appear16

Figure 28 | At What Threshold Price Does NGS Become Disruptive and Replace a Single Mutation Biomarker Test?

72%

32%

38%

28%

26% (-24%)Payers

Pathologists

62% (+182%)Oncologists

Comparable to a single biomarker predictive test and/or companion diagnostic test

Comparable to 2 to 4 single biomarker predictive testsand/or companion diagnostic tests

Don’t know

42% (+32%)


0 10 20 30 40 50 60 70 80 90 100


Precision Medicine ProgramsMore payer organizations report being involved in a coordinated precision medicine program, and more are communicating to providers regarding predictive biomarkers.

Of those surveyed, 34% (an increase of 21% over 2016) of payers reported being involved in a coordinated precision medicine program. Interestingly, when compared to 2016, 44% of payer organizations (an increase of 57%) actively communicate with providers regarding coverage and appropriate utilization of predictive biomarkers.

44% (+57%)

My organization is awareand interested in the utilization andcoverage of predictive biomarkers

My organization prefers therapeuticsthat have a predictive biomarker

or companion diagnostic

My organization requires predictive biomarkeror companion diagnostic result documentation

prior to approving coverage of a therapeutic

When making coverage or formulary decisionsfor an oncology therapeutic, my organization

includes the value of predictive biomarkersin the overall cost/benefit analysis

My organization collects predictivebiomarker real-world cost/benefit data

My organization actively communicates withproviders regarding coverage and appropriate

utilization of predictive biomarkers

Our clinical recommendations and/orpathways include predictive biomarkers

Not Asked52%

48%

52% 56% (+8%)

50%

28%

32%40% (+25%)

30%36% (+20%)

We collaborate with local IDNs/providersand diagnostic labs/pathologists to provide a

coordinated oncology precision medicine program 28%34% (+21%)

48% (-4%)

Figure 29 | Payer Comments on Predictive Biomarkers

N=50 payers.

2017 2016

0 10 20 30 40 50 60 70

Not Asked

Percent Who Strongly Agree (Top 2 Box Score)


8%

24%

0 20 40 60 80 100

62%38%

18%52%30%

20%

0%

60%20%

40%46%14%

Strongly agree Neutral Strongly disagree

Payer coverage and reimbursement are su�cient

The time required to acquire a biopsy and receive the test results can be an issue

Obtaining enough tumor from the biopsy for the test is not a problem

My provider organization (hospital, clinic) has collaborated with local payers and testing laboratory(s)

to develop a covered, standard protocol for utilizing NGS

0 20 40 60 80 100

56%36%

56%20%

48%44%8%

56%28%16%

Strongly agree Neutral Strongly disagree

Payer coverage and reimbursement are su�cient

The time required to acquire a biopsy and receive the test results can be an issue

Obtaining enough tumor from the biopsy for the test is not a problem

My provider organization (hospital, clinic) has collaborated with local payers and testing laboratory(s) to

develop a covered, standard protocol for utilizing NGS

Figure 30 | Oncologist Comments on NGS and GSPs

N=50 oncologists.

N=25 pathologists.

Figure 31 | Pathologist Comments on NGS and GSPs

Percent Agreement

Percent Agreement


References

1. Roychowdhury S, Chinnaiyan AM. Translating cancer genomes and transcriptomes for precision oncology. CA Cancer J Clin. 2016;66(1):75-88.

2. Olsen D, Jørgensen JT. Companion diagnostics for targeted cancer drugs – clinical and regulatory aspects. Front Oncol. 2014;4:105.

3. US Food and Drug Administration. Laboratory developed tests. http://www.fda.gov/MedicalDevices /ProductsandMedicalProcedures/InVitroDiagnostics/ucm407296.htm. Accessed June 23, 2016.

4. Andre F, Mardis E, Salm M, Soria JC, Siu LL, Swanton C. Prioritizing targets for precision cancer medicine. Ann Oncol. 2014;25(12):2295-2303.

5. Varond AJ. Trends in personalized medicine: regulatory focus. Regulatory Affairs Professionals Society website. www.raps.org/WorkArea/DownloadAsset.aspx?id=5275. Published October 2013. Accessed November 30, 2017.

6. Boland P, Ma W. Immunotherapy for colorectal cancer. Cancers. 2017;9(5):50.

7. US Food and Drug Administration. FDA approves first cancer treatment for any solid tumor with a specific genetic feature. https://www.fda.gov/newsevents/newsroom/pressannouncements/ucm560167.htm. Published May 23, 2017. Accessed October 26, 2017.

8. US Food and Drug Administration. Approved Drugs – FDA grants nivolumab accelerated approval for MSI-H or dMMR colorectal cancer. https://www.fda.gov/Drugs/InformationOnDrugs/ApprovedDrugs /ucm569366.htm. Published July 31, 2017. Accessed October 26, 2017.

9. BlueCross BlueShield of North Carolina. BRAF gene mutation testing to select melanoma or glioma patients for targeted therapy. http://www.bcbsnc.com/assets/services/public/pdfs/medicalpolicy /braf_gene_mutation_testing_to_select_melanoma_or_glioma_patients_for_targeted_therapy.pdf. Published June 2017. Accessed October 26, 2017.

10. National Health Service. Next generation sequencing. http://www.geneticseducation.nhs.uk /laboratory-process-and-testing-techniques/next-generation-sequencing-ngs. Accessed December 26, 2015.

11. Kruglyak KM, Lin E, Ong FS. Next-generation sequencing in precision oncology: challenges and opportunities. Expert Rev Mol Diagn. 2014;14(6):635-637.

12. Jones SJ, Laskin J, Li YY, et al. Evolution of an adenocarcinoma in response to selection by targeted kinase inhibitors. Genome Biol. 2010;11(8):R82.

13. Dawson SJ, Tsui DW, Murtaza M, et al. Analysis of circulating tumor DNA to monitor metastatic breast cancer. N Engl J Med. 2013;368(13):1199-1209.

14. AstraZeneca. Liquid biopsy: plasma ctDNA testing moves into mainstream cancer treatment. https://www.astrazeneca.com/media-centre/articles/2016/liquid-biopsy-plasma-ctdna-testing-moves -into-mainstream-cancer-treatment-220920161.html. Published September 22, 2016. Accessed October 26, 2017.

15. PR Newswire. Guardant Health announces draft Medicare local coverage determination for the Guardant360 assay. https://www.prnewswire.com/news-releases/guardant-health-announces-draft -medicare-local-coverage-determination-for-the-guardant360-assay-300459984.html. Published May 18, 2017. Accessed October 26, 2017.

16. Aravanis AM, Lee M, Klausner RD. Next-generation sequencing of circulating tumor DNA for early cancer detection. Cell. 2017;168(4):571-574.


Notes

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