Cancer Immunotherapy: Navigating a New Frontier

A year ago, as health insurers reviewed the number of breakthrough cancer treatments approved in 2015, some might not have blamed them for feeling overwhelmed. Breakthroughs in cancer immunotherapy offer the promise of saving lives, yet it comes at a high cost—and payers are in the eye of the storm. 

A year later, it has not become any less challenging. There are expanded treatment areas, approved indications that go beyond salvage therapy to first-line treatment, drug combinations to consider, and immunotherapy’s role in curing metastatic disease. In 2016, Keytruda (pembrolizumab; Merck), a PD-1 inhibitor, was approved as a first-line treatment for people with non-small cell lung cancer (NSCLC) whose tumors have high PD-L1 expression. Additionally, Yervoy (ipilimumab; Bristol-Myers Squibb) and Opdivo (nivolumab; Bristol-Myers Squibb)—which as a combination inhibit both PD-1 and CTLA-4 proteins—continued its march into clinical practice when the FDA expanded its approval as a first-line treatment for unresectable or metastatic melanoma to include patients regardless of gene mutational status (it had previously won approval only in those without a BRAF gene mutation). 

The fast-moving nature of developments in this area is illustrated in the latest National Comprehensive Cancer Network’s (NCCN) guidelines for melanoma. NCCN recommends the Opdivo/Yervoy combination for first-line therapy of unresectable or metastatic disease regardless of BRAF mutation status, and it no longer endorses Yervoy monotherapy for this purpose due in large part to the combination regimen’s success. 

Given the poor prognosis that typically accompanies a diagnosis of advanced cancer, immunotherapy agents are a welcome addition to the arsenal available to clinicians. They are enabling providers to offer viable options to those who have a transient response or are resistant to traditional first-line therapies—such patients previously were typically only offered palliative care. 

Of course, such hope comes at a cost. In the case of the Opdivo /Yervoy combination, it is reported that a four-dose regimen costs roughly $140,000—and more than $250,000 for one year of treatment. However, Norm Smith, president of Viewpoint Consulting, Inc, emphasized that this pricing reflects the wholesale acquisition cost (WAC), or list price. 

“We don’t know the net price,” he explained, “but in oncology it is likely within 12% to 15% of the WAC price.”

Using that logic, the net price for one year of the Opdivo /Yervoy combination treatment will still exceed $200,000. Medicare patients would assume 20% of that cost, and those with private insurance would pick up a portion in the form of co-pays and/or deductibles. That leaves payers footing the rest of the bill, and some seriously questioning whether such a system is sustainable long-term.   

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Patient Selection Is Key

For now, a big question is one of patient selection for immunotherapies, both from a business and clinical standpoint. The business ramifications were felt last summer when Merck reported successful trial results with Keytruda as first-line treatment for NSCLC, whereas Bristol-Myers Squibb announced that Opdivo was found to be no better than standard chemotherapy. The difference? Patient selection. In a gamble, “Bristol-Myers Squibb went wide-spectrum, taking all comers,” said Mr Smith, in hopes of broadening the potential patient population eligible for Opdivo. 

“Merck decided that only patients with higher levels of PD-L1 were appropriate candidates for its study,” he said. “This allowed for more focused targeting of patients, in the end to Merck’s benefit.”

Considering the high price tag that accompanies these mediations, who can blame payers for expecting such precision?  

“If the right patient can be identified, there is a better return on investment for payers,” said Catherine Cooke, PharmD, research associate professor at the University of Maryland School of Pharmacy. “Payers do not want to treat everyone and only see 20% success rate.  They want to only treat the 20% and see a 100% success rate. Having biomarkers and other tools to more accurately predict patients who will achieve positive outcomes will facilitate coverage of these agents.”   

“Insurers always want more proof,” added Charles Karnack, PharmD, BCNSP, assistant professor of clinical pharmacy at Duquesne University. “Will there be improved quality of life per additional months lived, and in which populations will this occur?” 

Mitch DeKoven, MHSA, principal, health economics and outcomes research, at QuintilesIMS, concurred. 

“The application and utility of real world data is paramount, particularly in this therapeutic area which traditionally has been quite expensive,” he said. “Payers are demanding to know in which patient subgroups superior outcomes are being realized.”

Donald Rucker, MD, former CMO of Premise Health, pointed out that payer demand for proof of efficacy is evidenced in the pharmacy benefits management mechanisms. “[They] are set up to do this,” he said. 

Barney Spivack, MD, national medical director of Medicare case and condition management at OptumHealth, argued that “the high costs associated with these approaches should not necessarily enter into the clinical review and clinical determination/recommendation decisions. There is always a need for high quality medical evidence to best inform decision-making regarding available therapies. In the absence of good quality data, such decisions are difficult, and formulary approval may not be granted. This is really no different from considerations for other more traditional [and less expensive] therapies.” 

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What About Competition?

It is reasonable to assume that with the number of immunotherapies coming to market—along with targeted treatments such as BRAF and MEK inhibitors—competition will drive prices down. However, according to our experts, this scenario is unlikely for immunotherapy.

For starters, “it is likely that price competition will be minimal between Opdivo and Keytruda,” offered Mr Smith. “Once [other approved immunotherapies] have more indications, price competition may develop, but very slowly. No one is saying that these drugs are interchangeable.” 

Dr Rucker took a step back to offer his perspective. “Current federal policies act so that US specialty medication prices are set on a rather rough approximation of a ‘cost plus markup’ basis. The largest driver of pharmaceutical costs in this country is the collective cost of the many FDA policies around new drugs.” In his view, prices for immunotherapies and other medications may eventually come down with the new Republican administration in place. “We may see regulatory reforms that effectively lower the cost of drugs in the research pipeline [for] patients [and] their payers. Regulatory speed needs to catch up to the speed of scientific advances.”

Dr Spivack said he is hopeful that increased emphasis on value-based care will play a role in price, but he too advised that the wait time is anyone’s guess. 

“More emphasis is being placed on true calculations of value, although what that means may differ from payer to payer,” he said. “The focus within oncology on the value of new cancer therapies… is much needed.”  

Mr DeKoven said he also sees this migration. “Health care has never adhered to the normal principles of economics. While in the past it was [based on] ‘willingness to pay,’ [the shift] towards value-based purchasing is apparent, given the numerous value frameworks that are being discussed today by the American Society of Clinical Oncology and others.”

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Excitement and Skepticism

As for combination therapies, the sentiment runs the gamut from excitement to skepticism. 

“Fundamentally, combination therapies make biologic sense since most cancers are the product of multiple separate biologic pathways each of which may have a different treatment,” explained Dr Rucker. “Our insights into tumor biology are advancing [to the point where] we are getting better at both predicting and measuring what each specific cancer therapy offers. That’s very exciting.”

Dr Karnack noted that these regimens play an especially important role in difficult-to-treat cancers, such as metastatic melanoma. 

“If there are improved outcome studies—demonstrating quality of life per additional month lived—it would be difficult for payers to not cover them,” he said.  

However, according to Mr Smith, insurers want to see results based on heft, which can be problematic in this area. 

“Very few of these regimens have moved beyond anecdotal evidence,” he said. “Even when a combination is studied, only very small groups of patients are included. In the minds of many medical directors, these combinations look like ‘experimental’ uses that are usually not reimbursed.” 

Such are the nuances of cancer immunotherapy. To pay or not to pay? How much to pay? And in which patients should treatment be paid for? These and other questions dot the landscape of this exciting frontier. The one constant is the reality that at the end of every one of these questions is a real live person with a devastating illness whose fate hangs in the balance. While caution needs to be exercised—for safety and economic reasons—many patients and clinicians want to hurry things along. 

“An individual with cancer may perceive a therapy to be of higher value than a payer would, as the individual is willing to accept higher risk to obtain the potential benefits,” explained Dr Cooke. 

Dr Karnack agreed. “Patients with terminal illnesses will ask “what have I got to lose?’” He quickly answered the question by pointing out that there are anecdotal reports in the literature that some immunotherapy treatments eventually cause autoimmune disease, and that certain leukemia therapies may lead to cardiac toxicity post-remission. 

“It does not benefit patients to be exposed to treatments that don’t work.” Edmund J. Pezalla, MD, MPH, a payer expert and CEO of Enlightenment Bioconsult, told First Report Managed Care. “Having ineffective treatments being used—when we don’t know that they are ineffective—hurts patients directly and may crowd out a potentially better therapy later.”

He noted that extra steps need to be taken to ensure that adverse events associated with certain patient populations do not hinder immunotherapy access for the patients it could benefit.

“One solution to this is to require post-market or continuation studies that will develop the more comprehensive data as soon as possible,” he said. “A mechanism for reviewing and changing use of the drug must be in place, something less than total withdrawal, should be available.”   

Mr DeKoven noted that adverse events are a serious concern and that, despite successes, “demonstrating safety and efficacy are paramount before rapid use and uptake.” 

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Conditional Approval

Even still, some have talked about the concept of conditional approval and reimbursement pending clinical results. Under such a scenario, say experts, reimbursement could be lower at first, but rise once the drug reaches an evidence threshold. Dr Cooke sees potential value, but only with proper safeguards in place. 

“Providing conditional approval would offer options for patients who [will likely have] poor outcomes with existing therapies,” she said. “[However,] mechanisms should be in place so patients and providers can understand what is known, and appreciate what is still unknown about these new therapies.” 

For instance, characteristics of the patient might not match study subjects, and there are concerns about heterogeneity. As for tinkering with reimbursement levels under such arrangements, Dr Cooke wondered if “perhaps manufacturers should bear the cost for patients who do not achieve positive outcomes?”

Dr Karnack added that conditional approvals make sense, but “drug companies do not like that concept because it removes some of the profit potential for that agent.” 

As for patients, for all the hope that immunotherapy provides, that optimism comes with its fair share of uncertainty and confusion. Last fall, Dr Cooke presented a study at the Association for Value-Based Cancer Care conference showing that surveyed cancer patients with employer-based insurance generally approved of their coverage, but many lacked an adequate understanding of that coverage. Moreover, financial concerns negatively impacted most.  

Acknowledging the inability of many patients to pay, Dr Cooke offered this anecdote: “Just today, I spoke with an elderly woman who wanted to understand the costs that she would be responsible for in order to obtain necessary treatment.  She agreed that she needed the care, but was unwilling to move forward until the costs were known.”

Reflecting on the encounter, Dr Cooke said that “delaying or denying appropriate cancer therapy based solely on financial concerns just doesn’t feel right.”