TRENDS SHAPING THE FUTURE OF PERSONALIZED CARE AND THE DELIVERY OF SPECIALTY PHARMACY

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1 TRENDS SHAPING THE FUTURE OF PERSONALIZED CARE AND THE DELIVERY OF SPECIALTY PHARMACY Key Takeaways from the June 18, 2013 Regional Symposium Nashville, Tennessee

2 THE SYMPOSIUM Trends Shaping the Future of Personalized Care On June 18, 2013, Genentech, in partnership with BlueCross BlueShield of Tennessee Health Institute, sponsored a symposium at The Marriott Vanderbilt in Nashville, TN, to discuss the movement towards personalized health care. The symposium highlighted ways in which health care stakeholders can work together to meet the challenges of this rapidly evolving field. The presentations and panel discussions encompassed the following topics: Advancement of clinical decision support in oncology Role of diagnostics in personalized medicine Future direction of biologics and specialty pharmacy Impact of site of care shifts on the delivery of cancer care Attendees represented a cross-section of diverse perspectives and included hospital systems, managed care organizations, employer groups, pharmacy benefit managers, and academia. THE EXPERTS Moderator: Peter Bach, MD, MAPP, Attending Physician, Memorial Sloan-Kettering Cancer Center Presenters and Panelists: Martin Kohn, MD, MS, Chief Medical Scientist, Care Delivery Systems, IBM Research, Inc. Health care s most pressing challenges and IBM Watson s potential role in addressing them Mara Aspinall, MBA, President, Ventana Medical Systems, Inc. Personalized medicine and companion diagnostics in the changing biopharma industry landscape Snehal Patel, Director, South San Francisco Drug Product Operations, Genentech The evolving manufacturing process of biologics and the future of personalized health care Raulo S. Frear, PharmD, General Manager, RegenceRx Management strategies with specialty pharmaceuticals A panel discussion addressed issues around the current shift in site of care including the transition from fee-for-service reimbursement to shared-risk models (e.g., bundled payments and accountable care organizations). Kate Fitch, RN, MEd, Principal and Healthcare Management Consultant, Milliman, Inc. Barry Fortner, PhD, Vice President of Payer Solutions, ION Solutions Lee Schwartzberg, MD, Senior Partner and Medical Director, The West Clinic Richard Taylor, PhD, Founder and Senior Partner, Oncology Solutions, LLC Lynn Zonakis, Managing Director, Health Strategy and Resources, Delta Air Lines, Inc.

3 Trends Shaping the Future of Personalized Care THE KEY TAKEWAYS The use of IBM Watson-based technologies in clinical decision support represents a significant step towards the personalization of cancer diagnosis and treatment recommendations. In partnership with Memorial Sloan-Kettering Cancer Center, IBM is training its Watson supercomputer to process, analyze, and interpret vast amounts of medical literature, population data, and individual health records to provide clinicians and patients with appropriate treatment options. According to Dr. Kohn, Watson utilizes natural language processing technology to evaluate the quality of sources of information, as well as consider patient preferences. In a separate collaboration, IBM is working with the health insurer WellPoint to support its clinical and medical review processes across a range of medical disciplines, including oncology. Diagnostics are poised to play a key role in achieving increasingly personalized health care, more cost-effective care delivery approaches, and improved patient outcomes. Ms. Aspinall cited recent instances where targeted cancer therapies and their companion diagnostics were approved concurrently, indicating the potential value that these tests bring to personalized medicine. I believe that as we go forward, diagnostics have to become the standard of care, said Ms. Aspinall. She emphasized that this will require innovative technology combined with better data, strong partnerships among stakeholders, and advocacy and education around the appropriate use of available diagnostic tools. Watson is not only giving us access to the ideas from huge volumes of information that we could not otherwise get, but also, just simply in the way it manages information, helping protect us against some of our own inherent human behaviors that lead to error. Martin Kohn, MD, MS There are going to be more therapeutic options, and with each and every one of those options, it is not as easy to say treat or not treat with a binary go or no-go decision. We need to use all of the tools available to make the best decision at the right time for that patient. Mara Aspinall, MBA

4 THE KEY TAKEWAYS (CONTINUED) Trends Shaping the Future of Personalized Care The era of biologics, or targeted therapies, has offered a new avenue towards more personalized and potentially more effective treatment strategies. Providing a unique insider s look, Mr. Patel described the high cost and complexity attached to the manufacture of biologics, emphasizing the strict regulations and controls to ensure quality and safety. Roche/Genentech s current research interests include antibody-drug conjugates (ADCs), which combine the specificity of a monoclonal antibody with the cancer-killing ability of chemotherapy to attack tumor cells in a much more targeted way. The company is also focused on developing innovative technologies that will help drive continuous improvement in manufacturing efficiencies. Specialty pharmaceuticals represent another key area of growth, with analysts estimating that by 2018, these products will account for nearly half of the 100 top-selling medications on the market. Dr. Frear emphasized the importance of collaboration among stakeholders in developing effective management strategies for specialty pharmaceuticals. RegenceRx has introduced several initiatives to address the increase in the use and cost of specialty drugs: Medication cost integration (MCI), which covers all medications under a single medication benefit High-touch specialty management program providing patients with monitoring and support Collaborative effort with GNS Healthcare to better understand how interventions can be used to help patients improve medication adherence What we re really doing here is opening and widening the therapeutic window, which will enable us to have a higher toxic dose and a lower efficacious dose, so potentially, we ll have a wider space that can allow for different molecules and different treatments. Snehal Patel We will not be successful unless we are able to successfully collaborate. Raulo S. Frear

5 Trends Shaping the Future of Personalized Care PANEL: SITE OF CARE SHIFTS: MAKING IT WORK As the site of care shifts from community-based to hospital-based cancer programs, Delta Air Lines and other large employers are looking for innovative payment and care delivery strategies to help manage rising costs and improve the value of their health care purchases. I m seeing the cost go up, but I m not seeing a value proposition for that, said Lynn Zonakis. This is not a sustainable pattern. It will not last long, and [among] the employers, there s already a lot of discussion of where our future is in health care. While private oncology practices are turning to consolidation as a matter of short-term economic survival, these mergers may also prove beneficial over the long run, encouraging practices to improve both infrastructure and efficiency and become better equipped to handle the increasing complexity of cancer care. Integrated systems are the way of the future, said Dr. Schwartzberg, citing The West Clinic s partnership with Methodist Healthcare as an opportunity to advance care to the next level through clinical pathways and other innovative initiatives. Experts are optimistic that the shift from community- to hospitalbased cancer care will help to align incentives, engage physicians in cost, and encourage payer-provider collaboration. These trends will be further solidified by the accompanying move toward accountable care organizations, bundled payments and oncology medical homes. However, panelists also expressed concern about the resulting impact on patient access to quality care, academic-based research, and innovation in oncology. PERSPECTIVES ON SITE OF CARE SHIFTS Provider We ll have to experiment to find the right model but in five years, I agree it will be completely different, and it will be better and more patient-focused. Lee Schwartzberg Providers taking on risk is where we re really going to get change. Kate Fitch Hospital Consultant How do we work together to divide the pot so that everyone is happy? Richard Taylor Employer [Consolidation] is very much on the radar of the employers, particularly the large employers like us, where cancer can cost $70 or $80 million a year. It s a big portion of our catastrophic and high-cost claims. Lynne Zonakis Payer We are concerned about the disequilibrium in the site of care continuum, and we re actively working to educate and to make sure that as we look for new models and reach for higher levels of value, in the process, we don t destroy value that we already have in hand. Barry Fortner

6 THE RESULTS Trends Shaping the Future of Personalized Care The symposium highlighted many of the key challenges and opportunities in an increasingly complex health care landscape marked by shifting sites of care and the emerging field of personalized medicine. The presenters and panelists addressed current efforts to more fully integrate cancer care with the latest technological advances in clinical decision support, companion diagnostics, biologics, and specialty pharmaceuticals. As the experts pointed out, keeping pace with these changes will require not only innovative tools and technology, but also a more collaborative environment. They painted an optimistic picture of the future, citing an event like this as indication that stakeholders are beginning to work together to align incentives and develop patient-centered care models focused on quality and cost-effectiveness. For the first time in my career, we re all sitting at these venues, and we re sitting together, and where there used to be silos between payers, providers, and employers, we re now all trying to create the solution. Lee Schwartzberg, MD 2013 Genentech, Inc., So. San Francisco, CA 9/2013

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