The mantra in oncology over the last several years has revolved around how practices should deal with the myriad of challenges they face: new guidelines and regulations, lower reimbursement and a shift toward value-based patient care. As a result, many community oncologists are actively looking for opportunities to improve efficiency within their practices, lower costs, and ensure their practices remain financially healthy and independent. As exciting new therapies and drugs bring hope to patients and remind oncologists why they chose their field, new information technologies are also changing the game when it comes to operating a practice. In fact, through these challenging and exhilarating times in cancer care, one thing has become clear: innovative healthcare information technology can play a critical role in helping physicians provide high-quality, evidence-based, cost-effective patient care.

Electronic Health Record (EHR) systems are one example of technology that can help practices meet many of their clinical and operational goals. While there has been a great deal of talk about EHRs over the last couple of years, due in part to the financial incentives offered by the Centers for Medicare & Medicaid Services (CMS), many practices still have not yet taken the plunge. As more practices consider adopting an EHR for the first time or even switching to a new EHR, there are several important factors to consider:

	An Oncology-Specific EHR Will Provide the Greatest Support for an Oncology Practice

Healthcare Information Technology, including EHR systems, needs to be designed to drive outcomes and quality care. For oncologists, that means choosing an oncology-specific EHR that includes meaningful content relevant to oncology and clinical decision support tools available at the point of care. Oncology-specific tools will best help oncologists provide and measure value-based patient care.

One key to ensuring the technology offers relevant content is the inclusion of oncologists as an integral part of the software development team. These physicians can draw from their day-to-day clinical experience to create a system that integrates into daily oncology workflow. Oncology can require specialized and complex treatments. When EHR developers recognize the impact that immediate access to a regimen library and available clinical trials have on a physician’s ability to quickly and accurately make the best treatment recommendations to patients, the result is a combination of systems that work together to offer extensive support to the oncologist at the point of care. One component is a robust decision support engine that prompts the oncologist to answer questions relevant to a patient’s particular type of cancer, and based on the information provided, automatically calculates and recommends the most appropriate stage according to the American Joint Committee on Cancer’s (AJCC) staging criteria. The most robust EHRs will use this information to identify appropriate, up-to-date diseasespecific regimen treatment options and even clinical trials, if available.

	Interoperability Is Critical to Allow for Growth

An EHR should be interoperable to ensure the system is effectively meeting changing technology needs. When choosing an EHR, a practice should be sure the system will be able to communicate with other systems within the practice—such as practice management and inventory management systems&mdash;as well as be flexible enough to exchange information with patients’ other care providers, including hospitals and labs, for the most effective and comprehensive care. Even more, make sure the system was developed on a platform that will accommodate changes and advancements in the future. An EHR needs to stay on top of today’s rapidly changing environment with software that reflects the latest advancements in healthcare and technology.

	Mobile Access is the New Standard— For Care Any Time, Any Place

Oncologists are best served by an EHR optimized for access through a variety of mobile devices, including laptops, tablets, and smart phones. Let’s face it, in today’s mobile world, oncologists must be able to access patient information, quickly respond to questions, and communicate with patients and other care providers whenever and wherever they are.

For many oncologists and practice administrators, the thought of migrating to an EHR system is a doubleedged sword. On the one side, they want to take advantage of the benefits an oncology-specific EHR will provide for the practice and its patients. On the other side is the realization that implementing a new system is a big undertaking.

There are several keys to successful implementation of an EHR: detailed planning; clinical engagement; development of optimal workflows; thorough training of all physicians and staff; and active support throughout the process. To begin, a practice should create a team that oversees the selection and implementation of the EHR and monitors the progress toward meeting Meaningful Use objectives. A good EHR vendor will have an experienced and knowledgeable team that understands the nuances of the way an oncology practice operates and can minimize the disruption to patient care and workflows during the transition. Before selecting an EHR vendor, it’s a good idea for a practice to speak with a few of the vendor’s current customers to ascertain how long the implementation took and the problems they may have encountered.

When a practice has successfully implemented an oncology-specific EHR, it will begin to see benefits immediately— both to patients and practice operations.

On the most basic level, timely access to patient information can significantly impact patient care and workflow efficiency. Real-time access to patient data from multiple locations and mobile devices gives physicians the information they need to respond to patient needs more quickly. With an EHR, gone are the days of wasted time hunting for paper records and trying to interpret handwritten notes. Now, physicians and staff can access current and historical information when and where they need it.

Combined drug, infusion, and Evaluation & Management (E&M) charges account for approximately 81% of a practice’s revenue.

 Missed charges and coding errors can dramatically affect a practice’s bottom line. Using an EHR system specifically designed to meet the unique workflow of oncology helps practices correctly capture all charges related to a patient visit and efficiently submit the charges to payers, reducing the risk of being underpaid and improving cash flow. In fact, one study that analyzed data from 75 physicians who used an oncology-specific EHR revealed that physicians realized an average increase in their E&M gross charge capture of 7.5% per patient visit after implementing the EHR. The gains were based on improved documentation leading to more accurate E&M coding. Obviously, this increase has a direct positive impact on the average gross revenue per physician.

Qualification for Maximum Financial Incentives

Another sign of a successful implementation is a practice’s ability to demonstrate Meaningful Use and qualify for the maximum Medicare EHR incentives. According to a letter published in the February 21, 2013 issue of The New England Journal of Medicine, just over 12% of approximately 509,000 eligible professionals (EPs) said they met requirements for Meaningful Use incentives for EHRs as of May 2012. Reasons for such a small percentage likely include: (1) non-adoption of EHR technology; (2) use of EHR technology that isn’t certified to meet the standards; or (3) “unsuccessful” implementation of a certified EHR system, which could be a result of lack of efficient implementation, training, and support services. Remember that successful implementation of an EHR requires solid planning, training, and good support before, during, and after the install. As great as the technology may be, the people supporting it are often the real differentiating factor.

When selecting an EHR vendor, it’s critical to understand the vendor’s capability to help the practice meet the various stages of requirements for Meaningful Use. There were 25 Meaningful Use requirements in Stage 1. To qualify for payment, 20 had to be met. In 2014, EPs will begin meeting Stage 2, which requires reporting on additional objectives, meeting higher thresholds, and providing patients online access to their medical records through the use of patient portals. The purpose of these portals is to engage patients in their care, allow for easy access by patients to view and download their diagnosis and treatment information, as well as transmit information between physicians and patients via secure online messaging. Currently, several EHR vendors are struggling to help practices meet this requirement. Practices must be aware that as the requirements for Meaningful Use continue to ratchet up, so must each vendor’s capabilities.

Even EPs who did not qualify for the maximum incentive payouts under CMS’s program by demonstrating Meaningful Use of EHR technology in 2012 can qualify for incentives and avoid penalties that kick in by 2015 if they choose a vendor soon who can support them along the way. Additionally, with the use of oncology-specific technology, practices can minimize the negative effects of rising costs and declining reimbursement, and most importantly, capitalize on technology’s ability to improve patient care. As we forge ahead with advancements in technology, it’s exciting to see where we might go. Every day there are new innovations that allow us to re-imagine and improve upon our current healthcare information technology and its ability to enhance the quality and efficiency of cancer care. The key is for practices to implement technology that will help them meet their needs today and into the future.

			Barr TR, Towle EL. National Oncology Practice Benchmark, 2011 Report on 2010 Data. 

Articles

The mantra in oncology over the last several years has revolved around how practices should deal with the myriad of challenges they face: new guidelines and regulations, lower reimbursement and a shift toward value-based patient care. 

Innovation in EHR Technology Drives Quality Oncology Care

Owing to the high clinical failure rates, genetically variable tumor characteristics, and skyrocketing drug development costs, the era of traditional blockbuster oncology agents has come to an end. With the advent of personalized medicine, we have entered the “niche-buster” era, defined as effective products delivered to identifiable patient segments. The good news is that all cancer stakeholders– oncologists, payers, drug manufacturers, and of utmost importance, the patients–benefit from delivering the right drug to the right person. Companion diagnostics, necessary for safe and effective use of targeted cancer therapies, are making a valuable contribution to patient outcomes as well as providing faster time to market and lower development cost for pharmaceutical companies.

With the success of targeted treatments such as Gleevec (imatinib mesylate; Novartis) and Herceptin (trastuzumab; Roche/Genentech) generating billion dollar sales revenue, the switch to personally-tailored medicine is a fait accompli. In this brave new world of personalized medicine, companion diagnostics have become the industry’s Rosetta Stone and allow researchers to decode which patients will best respond to specific treatments, conduct smaller clinical trials, improve efficacy, reduce side effects, lower development costs, and streamline regulatory approval.

It’s been 13 years since the FDA approved Herceptin with its eventual companion diagnostic Dako’s HercepTestâ„¢ for the treatment of HER2+ breast cancer. Since then, a groundswell of activity and regulatory support for the co-development of targeted therapies with companion diagnostics has only increased in recent years. Companion diagnostic testing predicts treatment response byidentifying alterations in genes such as the wild type 

 in colorectal cancer, anaplastic lymphoma kinase (

), in non-small cell lung cancer (NSCLC), and the mutation in the 

 gene associated with metastatic melanomas.

 gene may be a reliable predictor of treatment response to Erbitux (cetuximab; ImClone/Bristol-Myers Squibb/Eli Lilly)and Vectibix (panitumumab; Amgen) in colorectal cancer patients, the European Medicines Agency (EMA) recommends that the label indication for Erbitux be revised in the UK to focus on metastatic colorectal patients with the wild-type 

 gene. If clinical trials prove equally compelling, the FDA may follow suit and recommend that a companion diagnostic for 

 testing be included in the metastatic colorectal indication. A number of diagnostic companies have already announced plans to develop and market K-ras assays and in vitro diagnostic (IVD) test kits in anticipation of the future regulatory rulings.

-positive NSCLC using the Vysis ALK Break Apart FISH Probe Kit (Abbott Molecular Inc) resulted in significantly better outcomes for patients with late-stage NSCLC. In the pivotal trial for crizotinib (Xalkori; Pfizor), 

-positive NSCLC patients treated with the ALK inhibitor resulted in an objective response rate of 50% to 61% in patients who would typically experience a 10% response rate to second- and third-line chemotherapies.

Recently, the FDA approved Tarceva (erlotinib) for first-line use in metastatic NSCLC patients who test positive for 

 mutations in exons using the cobasÂ® EGFR Mutation Test. Research demonstrated that 

-positive patients receiving Tarceva experienced 10.4 months progression-free survival versus 5.2 months with standard combination therapy. This test should prove valuable since 

 mutations are typically found in 10% to 30% of NSCLC patients. MolecularMD also has an exclusive patent for diagnostic technology that identifies patients with 

 mutations, which can predict which patients will be resistant to treatment with Tarceva or Iressa (gefitinib).

 mutation receiving Zelboraf (vemurafenib, Roche) experienced improved rates of overall and progression-free survival compared with standard therapy. In this case, the drug company partnered with the diagnostic company Plexxikon during preclinical development of Zelboraf, using the cobasÂ® 4800 

 Mutation Test, which resulted in accelerated approval of the drug. Whereas most agents take 10 to 15 years to reach the market, Zelboraf reached the market in less than six.

The FDA approved both Xalkori and Zelboraf in August 2011 with the requirement that the two targeted therapies be used in conjunction with their companion diagnostic tests.

Regulatory agencies such as FDA and EMA understand the profound implications companion diagnostics will have in ensuring the safe and effective delivery of molecularly targeted agents. In draft guidance issued on July 14, 2011, the FDA suggested that targeted oncology agents would only gain approval if reviewed in parallel with companion diagnostic tests, stating “the IVD companion diagnostic device will be essential for the safe and effective use of the therapeutic product, and its use will be stipulated in the labeling of the therapeutic product.”

To ensure that this “essential” component of targeted therapy be considered and pursued by pharmaceutical manufacturers, the FDA is determined to streamline the drug approval process by holding joint meetings with the Center for Drug Evaluation and Research, the Center for Biologics Evaluation (the centers responsible for drug products), and the Center for Devices and Radiological Health (the branch responsible for medical devices).

Kevin Hawkins, Director of Quality and Regulatory Affairs at MolecularMD, noted that drug companies are frequently informed they will need to develop a diagnostic in conjunction with a targeted therapy prior to submitting an investigational new drug (IND) application. As a result, many drug companies are partnering with experienced diagnostics companies early in the drug development process to successfully navigate the evolving regulatory landscape.

In addition, the FDA states that, “for a novel therapeutic product, an IVD companion diagnostic device should be developed and approved or cleared contemporaneously to support the therapeutic product’s safe and effective use.”

Co-development is central to the paradigm shift occurring in the regulatory field of targeted medicines, the ramifications of which will soon be felt in the European Union. In a 2011 White Paper, the EMA signaled its intention of regulating companion diagnostics by keeping these genetic tests under the IVD directive and giving them a class C rating, which indicates a high individual risk and/or moderate public risk.

According to Hawkins, the IVD directive is currently being rewritten as a regulation and will soon be passed into law. This will require the submission of premarket approval (PMA) applications similar to that required by the FDA; currently, the EMA only requires self-certification.

In the United States, the FDA has demonstrated its willingness to approve agents that closely hew to the agency’s draft guidance as evidenced by the rapid approvals of both Zelboraf and Xalkori. However, the FDA has also shown its willingness to reject targeted therapeutic oncologic agents because they lack a companion diagnostic. Such was the case in 2010, when the FDA rejected Omapro (omacetaxine mepesuccinate, ChemGenex) for the treatment of a subset of leukemia patients with the 

All of this makes it essential to partner with a cutting-edge companion diagnostic company with the skills to smoothly navigate today’s shifting regulatory terrain.

	MolecularMD Helping Navigate the Road Ahead

MolecularMD, located in Portland, Oregon, works closely with pharmaceutical companies throughout each stage of a drug’s clinical development program ensuring that the technology evolves with the drug, thus mitigating risk. By partnering with a company during the phase 1 stage of a drug’s development, MolecularMD can help evaluate the specific candidate biomarkers with a properly analytically validated test. During phase 2, MolecularMD fully implements the test in prospective trials so that the FDA will have a tailored therapy and an approved companion diagnostic available for phase 3 testing. In such a way, pharmaceutical manufacturers can be assured that the diagnostic will never delay approval of the drug and that MolecularMD can quickly adapt to new data as they evolve.

As the first and only diagnostic company to develop a standardized assay for the quantification of BCRABL levels, MolecularMD has proven its experience and success in the field. Part of that success is due to Brian J. Druker, MD, director of the Oregon Health & Science University (OHSU) Knight Cancer Institute, and the lead clinical investigator for Gleevec, the first molecularly targeted anticancer agent. His pioneering research in the field has facilitated the development of trailblazing BCR-ABL mutation testing, which has proved instrumental in getting FDA approval for the second-generation ABL kinase inhibitors dasatinib, (Sprycel; BMS) and nilotinib (Tasigna; Novartis), both indicated as first-line therapy for newly diagnosed Philadelphia-positive (Ph+) chronic myeloid leukemia (CML) in the chronic phase.

In 2011, MolecularMD partnered with ARIAD Pharmaceuticals to design a companion diagnostic test for the pan-BCR-ABL inhibitor ponatinib, an investigational agent for patients with resistant CML and Ph+ acute lymphoblastic leukemia (ALL). The test, which identifies patients with the T315I mutation, was developed and submitted to the FDA for approval within 18 months, proving that MolecularMD can achieve rapid turn-around times that help streamline clinical trials.

MolecularMD also works closely with OHSU, Dana- Farber Cancer Institute, and New York University Medical Center, all of whom give them firsthand access to genetic biomarker information that is of paramount importance in the development of cleareyed, cutting-edge diagnostic tools. The researchers at MolecularMD develop customized RNA-, DNA-, and IHC-based assay designs tailored to the oncology biomarker being evaluated.

By partnering with Kwok-Kin Wong, MD, at Dana- Farber Cancer Institute, MolecularMD has already developed assays to identify mutations in the liver kinase B1 (LKB1) tumor suppressor gene, which has been implicated in cancers of the lung, endometrium, skin, pancreas, colon, and breast. The assays were validated using both immunohistochemistry (IHC) and next-generation sequencing tests in 34 patient tumor samples, the results of which were presented at the American Association for Cancer Research Annual Conference, April 7-9, in Washington, DC.

Targeted therapy is fast coming into focus. Companion diagnostics offer exceptional benefits for physicians, regulatory agencies, insurance providers, and most importantly, patients. Expanding the capabilities of what cancer trials can accomplish will undoubtedly result in higher quality healthcare that is extremely cost-effective. Exciting commercial opportunities await those pharmaceutical companies who join forces with experienced diagnostic developers with the regulatory acumen and technological knowhow to navigate and conquer the emerging field of targeted oncology treatments. The increased clinical efficacy and fewer side effects associated with patient-stratified therapies may inevitably speed up approval times and lower clinical trial costs, making companion diagnostics a win-win for all involved.

			Shaw A. The crizotinib story: from target to FDA approval and beyond. InforMEDical. www.informedicalcme.com/lucatoday/ crizotinib-story-from-target-to-fda-approval. Accessed November 4, 2013.

			US Food and Drug Administration. FDA approves Zelboraf and companion diagnostic test for late-stage skin cancer. www. fda.gov/NewsEvents/Newsroom/PressAnnouncements/ ucm268241.htm. Accessed November 4, 2013.

			Plexxicon. Melanoma and BRAF Mutant Cancer Program. www. plexxikon.com/file.cfm/13/docs/Plexxikon_Melanoma_v15%20 3%20final_080211.pdf. Accessed November 4, 2013.

			US Food and Drug Administration. Guidance for Industry and Food and Drug Administration Staff - In Vitro Companion Diagnostic Devices. www.fda.gov/medicaldevices/ deviceregulationandguidance/guidancedocuments/ucm262292. htm. Accessed November 4, 2013.

Owing to the high clinical failure rates, genetically variable tumor characteristics, and skyrocketing drug development costs, the era of traditional blockbuster oncology agents has come to an end.

Companion Diagnostics Are Driving Support in the Evolving Regulatory Landscape

The US Supreme Court’s decision to uphold the Affordable Care Act but allow states to decide whether to expand Medicaid

 has raised a question in many states: Where political leaders have been opposed or split on President Obama’s healthcare reforms, is it smart or foolish to cover more people?

While Republicans oppose healthcare reform more often than Democrats, having a Republican in the state house has not always doomed Medicaid expansion. Arizona Governor Jan Brewer, who famously wagged her finger at Obama on an airport tarmac, nonetheless stared down legislators in her own party until they added 300,000 people to the rolls. For New Jersey’s Chris Christie, having a Democratic legislature made Medicaid expansion easier. However, neither Arizona nor New Jersey set up a state-run exchange to enroll people in health plans.

But in other states, philosophical opposition to expanding a government program and concerns about long-term costs forced full-blown rejection of Medicaid Expansion or, in the case of places like Arkansas, Iowa, and Pennsylvania, attempts at hybrid plans. Waivers would allow states to craft their own versions of Medicaid, most with elements of privatization and one, in Pennsylvania, that would require, for the first time, that most new recipients look for work.

On Friday, September 27, Arkansas Governor Mike Beebe received a phone call from US Health and Human Services Secretary Kathleen Sebelius that his state would be the first granted a waiver to pursue a so-called “private option,” which will allow state residents to use Medicaid dollars to subsidize coverage obtained through private insurance. Up to six states may pursue some form of Arkansas’ plan with two, Iowa and Pennsylvania, filing waiver requests.

Beebe, a Democrat, said the waiver would allow about 218,000 Arkansans to receive private coverage. “Our actions have drawn positive attention from across the country, and now we will focus on getting this insurance to the Arkansans who need it to lead healthier, more productive lives,” he said in a statement.

The Arkansas, Iowa, and Pennsylvania plans all feature free-market aspects to the expansion of coverage—a unique “hybrid” strategy palatable to Republican or conservative Democratic legislators in their own states, and perhaps to conservative lawmakers elsewhere who have resisted expanding any government program.

 Indeed, at the recent Medicare-Medicaid conference sponsored by America’s Health Insurance Plans, Daniel Crippen, executive director of the National Governors Association, said absent the willingness of the Centers for Medicare & Medicaid Services (CMS) to approve hybrid plans, he did not foresee additional Medicaid expansion until after the 2016 election cycle. “If there’s more flexibility, the sooner the expansion will occur,” he said.

		Table. Key Provisions of the Arkansas, Iowa, and Pennsylvania Waiver Applications

					Use of Private Health Plans for Newly Eligible?

					All newly eligible benificiaries up to 138% of FPL

					All new eligible beneficiaries between 101% and 138% FPL

					All newly eligible beneficiaries up to 138%of FOPL

					Same as existing state law for those at 100%-138% of FPL; waived for others

					Limited to nonemergency use of ED services (starting year 2)

					Auto-assignment for beneficiaries who do not choose from at least 2 “Silver” level Marketplace plans

					Financial penalties for low adherence to medical regimen and regular check-ups

					Beneficiary work status to be reviewed to determine eligibility

		ED indicates emergency department; FPL, federal poverty level.

Pennsylvania will evaluate the program within 2 years to determine if savings outpace its costs. If it is found to cost the state more, it will discontinue the program.

Based on a sliding scale; premiums can be waived based on beneficiary participation in health improvement activities.

			Musumeci M. Medicaid expansion through premium assistance: key issues for beneficiaries in Arkansas’ section 1115 demonstration waiver proposal: issue brief. Kaiser Commission on Medicaid and the Uninsured. July 2013. http:// kff.org/medicaid/issue-brief/medicaid-expansion-through-premium-assistance-key-issues-for-beneficiaries-in-arkansassection- 1115-demonstration-waiver-proposal/). Accessed September 20, 2013.

			Musumeci M. Medicaid expansion through premium assistance: Arkansas and Iowa’s Section 1115 Demonstration Waiver applications compared. Kaiser Commission on Medicaid and the Uninsured. http://kff.org/health-reform/fact-sheet/ medicaid-expansion-through-premium-assistance-arkansas-and-iowas-section-1115-demonstration-waiver-applicationscompared/. Published September 18, 2013. Accessed September 20, 2013.

			Henderson OK. Branstad signs Iowa’s response to Medicaid expansion. Radio Iowa, June 20, 2013. www.radioiowa. com/2013/06/20/branstad-signs-iowas-response-to-medicaid-expansion-audio/. Accessed September 20, 2013.

			Worden A. Corbett plan: accept Medicaid funding, add requirements. Philadelphia Inquirer September 17, 2013. www.philly.com/philly/news/20130917_Corbett_plan__Accept_Medicaid_funding__add_requirements. html#ZH21WehqGdFJTyg2.99. Accessed September 25, 2013.

			Worden A, Couloumbis A, Brubaker H. Gov. Corbett to propose big changes to Pennsylvania Medicaid. Kaiser Health News, September 15, 2013. www.kaiserhealthnews.org/Stories/2013/September/15/Pennsylvania-Medicaid-Gov-Tom- Corbett.aspx. Accessed September 20, 2013.

			Healthy Pennsylvania: Reforming Medicaid. Pennsylvania Department of Public Welfare. www.dpw.state.pa.us/ucmprd/ groups/webcontent/documents/document/p_035843.pdf. Accessed September 25, 2013.

Lack of expansion translates directly into lack of coverage. In June, researchers estimated that if 14 states opted out of Medicaid expansion, as allowed by the 2012 Supreme Court ruling, 3.6 million fewer people would be insured than if all of the states participated. These states would lose out on $8.4 billion in federal transfer payments. Furthermore, uncompensated care could cost these states another $1 billion by 2016.

 In most instances, the states’ healthcare industries have been arguing loudly in favor of Medicaid expansion, based on the forecasts for greater revenues resulting from larger populations having coverage and seeking care. This has been putting state governments at odds with major local and regional businesses in largely Republican areas, an uncomfortable position for businessfriendly elected officials.

If Pennsylvania’s waiver is approved by CMS, it would be the 26th state to expand Medicaid, and it could provide other hesitant state governors a usable pathway to not only cover more people but also to accept federal assistance to take part in the program.

The common element of the hybrid plans is to use the health insurance exchange to increase coverage of the newly insured. Technically, this is not an expansion of Medicaid, though each state would use federal Medicaid dollars to provide subsidies to state residents who would, in turn, use the subsidies to purchase private insurance on the exchanges (now called “the marketplace”). This is also referred to as a “premium assistance” model.

This approach does not necessarily mean that lowincome residents would obtain benefits equal to what they would have received in the traditional Medicaid program. This may be a key objection by critics and CMS alike. To address this gap, CMS would require the states to provide “wraparound coverage,” which would ensure that members have the same level of benefit as any Medicaid beneficiary. This includes paying for any plan cost-sharing requirements above and beyond Medicaid’s own out-of-pocket limits.

 In addition, CMS will require that new beneficiaries have a choice of at least two qualified health plans in the marketplace before the agency will approve any section 1115 waiver request.

Arkansas’ plan tightens its eligibility requirements for its state Medicaid program, leaving a greater share of the newly insured population to seek a plan on the exchange (income thresholds would be ratcheted down to a mere 17% of the federal poverty level, covering those with incomes up to 138% of that benchmark). Arkansas will require those entering the program to use the marketplace to choose a health plan for coverage. If this were voluntary, a section 1115 waiver would not be necessary.

Sandra Cook, consumer assistance specialist for the Arkansas Insurance Department, described the private option as a “win-win” while appearing at Diabetes Innovation 2013, a conference sponsored in Washington, DC, by the Joslin Diabetes Center of Harvard. “Insurers have guaranteed payment for 250,000 lives in Arkansas,” she said, noting it will be at an insurance rate, not the Medicaid rate. This expansion of coverage into areas where the working poor live will encourage young doctors to locate in rural areas, she said, because they will be able to make a living. Private coverage, Cook said, doesn’t carry the “stigma” that some feel when they are on public assistance programs.

Pennsylvania seeks to address Medicaid expansion of the previously uninsured on many levels, including the use of premium assistance and private insurance plans, but notably, Governor Tom Corbett has added a provision onto the state’s section 1115 waiver request: that coverage is contingent on a beneficiary’s actively seeking a job. This may prove to be the most controversial part of Pennsylvania’s application.

Sharon Ward, executive director of the Pennsylvania Budget and Policy Center, issued a white paper September 27 that stated, “Federal law and policy prohibit premiums in the Medicaid program for anyone under 100% of the (federal poverty level) and the conditioning of health care coverage on job search and training requirements. The Corbett administration will be applying for a waiver to suspend those provisions of the law. Where CMS comes down on these issues remains to be seen.”

Additionally, Corbett is seeking to keep children in the state Children’s Health Insurance Program, and out of the general Medicaid program, as directed by the ACA.

 It is not known whether these provisions may be deal-breakers for CMS.

The US Supreme Court's decision to uphold the Affordable Care Act but allow states to decide whether to expand Medicaid has raised a question in many states: Where political leaders have been opposed or split on President Obama's healthcare reforms, is it smart or foolish to cover more people?


Medicaid Expansion Plans Provide Novel Approaches for Healthcare Coverage

The increased cost of new branded oncology drugs continues to receive much negative press.

 Recent editorials have criticized the high cost of new cancer therapies, and their less than stellar improvements in efficacy, over already existing, lower-cost treatment options. Such critics have argued that little or no correlation between drug efficacies and pricing exists. One editorial, in particular, explained the decision of Memorial Sloan-Kettering Cancer Center to exclude the recently approved Zaltrap [ziv-aflibercept; Sanofi/ Regeneron] from its formulary due to its high cost, and because major clinical practice guidelines agreed that it is no more effective than the already existing, lower cost drug Avastin [bevacizumab; Genentech] for patients with advanced, metastatic colorectal cancer.

 Zaltrap had been priced at an average of about $11,000 a month, while Avastin costs less than half that at around $5000 per month. Subsequently, Sanofi discounted the net cost of Zaltrap by 50% in the United States in response to market resistance.

Amid concerns with the high cost of new oncology drugs, a relevant question is what does it actually cost to bring a new innovative oncology treatment from its infancy stages to commercialization? During the 1990s, the research and development cost per approved oncology drug was estimated to be 20% higher than non-oncology drugs: around $1024 million for oncology versus $868 million for all drugs.

 In the past decade, prices for new branded oncology drugs have nearly doubled from about $5000 per month to over $10,000 per month. As recently as 2003, the cost of developing a new drug in all therapeutic areas was estimated at nearly $1 billion.

In 2007, a review of the economics of new oncology drug development found that 71% of oncology drugs received priority review status from the Food and Drug Administration versus 40% of other new drugs receiving priority status (from 1997 to 2005).

 The oncology drugs had longer clinical development times from start of testing to market approval and were likely to be tested in many more uses before first marketing approval than the other categories. Before original approval for marketing, 57% of oncology drugs were investigated for multiple indications, with 32% tested in at least four indications. These factors affect the full-capitalized cost per approved drug.

According to Joseph DiMasi, PhD, of Tufts Center for the Study of Drug Development, robust data specific to current oncology drug development costs are lacking. Given the generally large expenses of oncology drug treatment, according to DiMasi, most economic experts believe that per patient costs for oncology drug trials are relatively very high. “However,” he said, “the net effect on relative costs is unclear as costs depend on how many indications are pursued.”

Generally, phase III trials are the most expensive development phase for any drug. Oncology drugs, in particular, are plagued by a high failure rate after entering phase III, which leads to higher average development costs. From 2004 to 2011, the overall rate of transitioning from phase I to FDA approval was 6.7% for oncology, while it was 12.1% for all other therapeutic areas.9 The big drop in phase III success for oncology trials is the primary driver of this two-fold difference. As little as 45% of oncology therapeutics progress from phase III to NDA/ BLA versus 64% for all other areas.

One challenge in oncology drug development is that endpoints in phase II trials are not welldefined and do not readily translate into phase III designs, which is very different from other therapeutic categories such as infectious disease or lipid-lowering drugs.

 While areas like infectious disease have highly quantifiable markers like viral load that have direct, predictive value for phase III, oncology allows phase II trials to be set up to only gain initial evidence to justify more rigorous, quantitative investigation.

“The difference in endpoints between phase II and phase III account for a large number of failures in phase III since response rate or progression-free survival (PFS) does not always predict for benefit in overall survival,” explained Mohammad Azab, MD, MSc, MBA, Chief Medical Officer of Astex Pharmaceuticals. Although overall survival (OS) is considered by payers, especially, as the gold standard endpoint, it is rare to get solid OS data in phase II.

Emphasizing the importance of appropriate design for phase II trials, Gisela Schwab, MD, Executive Vice President and Chief Medical Officer at Exelixis said, “The design of phase II trials should be tailored to the mechanism of action of the drug in development.” For example, if a drug is expected to result in cytostatic rather than cytoreductive activity, a time to event endpoint such as PFS or OS may be preferred. This may be best addressed in a randomized phase II trial or a randomized discontinuation study to understand the impact on these relevant endpoints. For compounds showing very high response rates due to cytoreductive activity, data from a single arm phase II study may be appropriate to support a phase III trial.

According to Schwab, “Study populations between phase II and phase III should be consistent, and statistical assumptions for the phase III trial should not overestimate the drug’s activity.”

Hopes are high that biomarkers may aid in taming the costs of developing new oncology drugs. Azab stated that the cost to develop a companion diagnostic is about $15 to $20 million. “This could be largely offset by a smaller size clinical program based on a wellselected patient population.” An example is the FDA approval of Xalkori [crizotinib; Pfizer] where the drug was developed in a carefully selected group of lung cancer patients that had the ALK translocation in their tumor. In contrast to the usual phase III study in oncology which could reach to close to 1000 patients, Xalkori’s accelerated approval was based on two phase II trials that had a combined number of only 255 patients.

For oncology drugs with biomarkers, 90% progressed from phase I; 69% progressed from phase II; and 85% progressed from phase III, versus those without markers, 74% progressed from phase I; 47% from phase II, and 51% from phase III.

 This indicates that markers raise the probability of transitioning through the phases of clinical trials, and it suggests that markers may lower development costs.

Nonetheless, the majority of non-orphan drugs (67% among phase I agents) are currently being developed without markers.

 Furthermore, less than 30% of cancer drug FDA approvals that occurred from 2006 through 2011 had genetic or protein expression mentioned in their labeled indication. “Unfortunately, for the average oncology drug that does not have a careful patient selection strategy based on a wellvalidated biomarker and on the presence of a validated target, the cost is certainly going up and the timelines are being extended,” said Dr. Azab.

The value of using a therapeutic/companion diagnostic package to optimize the value of a drug platform through better defining a development path is explained by Barry Selick, PhD, CEO, Threshold Pharmaceuticals. Threshold has recently acquired an investigational hypoxia PET imaging agent from Siemens. According to Selick, the agent has a clinical data package supporting its safety profile and has the potential to identify and quantify the degree of hypoxia in patient tumors. “This is really about using a therapeutic/companion diagnostic package to optimize the value of our hypoxia-targeted drug platform. With the therapeutic/diagnostic combo, we hope to better define the development path in tumor types that are more heterogeneous with respect to our hypoxia target,” he said.

In discussing efforts to reduce costs in oncology drug development, Azab pleaded for more efficient initiation of oncology clinical trials. He explained that the time from final study protocol to first patient has gone from 2 to 3 months (10 to 20 years ago) to 6 to 9 months (or even 12 months) in some academic oncology centers. The main driver of those long times is the multiple protocol reviews that each institution undertakes and the legal negotiations. “A concerted effort in these academic oncology centers to introduce efficiencies in their review process and legal contract negotiations go a long way in running faster trials and in providing quicker access for patients to new potentially beneficial therapies,” he said.

Additionally, the cost of developing any successful new drug must be calculated to include the cost of trying to develop those drugs that ultimately do not get approved. “To the extent that the industry can develop predictive biomarkers or otherwise target drugs to patients who will derive benefit early in the development process, the sooner ineffective drug candidates can be identified and culled. This will preserve dollars and resources for candidates with greater promise,” offered Selick. In other words, fail fast and fail cheap.

Echoing Selick’s sentiment, Azab agreed, “Since the cost per drug approved is heavily influenced by the allocation of costs from failed drugs, the sooner we kill bad drugs with minimal cost the better the overall cost per approved drug would be.”

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The increased cost of new branded oncology drugs continues to receive much negative press. Recent editorials have criticized the high cost of new cancer therapies, and their less than stellar improvements in efficacy, over already existing, lower-cost treatment options. Such critics have argued that little or no correlation between drug efficacies and pricing exists. 

November 2013 | Oncology Business News®

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