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Fate of Medco's Personalized Medicine Programs Uncertain Under Express Scripts' Acquisition Plan


By Turna Ray

If lowering healthcare costs is one of the main motivations for Express Scripts' bid to purchase Medco for $29 billion, then the merged pharmacy-benefit manager could leverage Medco's extensive capabilities in personalized medicine for this purpose.

Since the transaction has not yet gained regulatory approval, Express Scripts declined to answer specific questions about its personalized medicine strategy following the proposed merger, but the PBM has been keeping an eye on the discipline as a money-saving strategy.

"Express Scripts believes that personalized medicine, which includes pharmacogenomics, can play a significant role in the future of healthcare," a company spokesperson told PGx Reporter. "Pharmacogenomics is an evolving field and Express Scripts' leadership in pharmacy benefit research gives us a unique position in the marketplace to work in our client’s best interest to improve quality and lower costs."

Among the big three PBMs – Express Scripts, Medco, and CVS Caremark – St. Louis-based Express Scripts is the only one that hasn't made a major acquisition in the personalized medicine space.

In February last year, Medco ─ a company that provides PBM services to 65 million people ─ acquired genetic education and decision support provider DNA Direct to help implement its personalized medicine programs. Central to Medco's overall personalized medicine efforts is Genetics for Generics, a program through which the PBM tries to encourage doctors to prescribe generic drugs to patients who, identified with the help of certain genetic tests, will benefit more from a lower-cost drug than a new and pricier brand-name treatment (PGx Reporter 05/26/2010).

In 2009, the country's largest pharmacy-services provider CVS Caremark took a majority stake in the genetic testing benefits management firm Generation Health, and a few months later, rolled out a pilot PGx testing program among its PBM clients (PGx Reporter 06/02/2010).

In acquiring Medco, Express Scripts could bolster its pharmacogenomics research and personalized medicine offerings to clients, should the merged company choose to maintain these programs. On the other hand, Express Scripts said that by combining its capabilities with Medco, the new firm would be able to save more than $1 billion by cutting costs and it's possible that some of Medco's genomic medicine programs could be nixed.

"Express Scripts has clearly shown a more wait-and-see approach to pharmacogenomics and molecular diagnostics," said Keith Batchelder, CEO of Genomic Healthcare Strategies, a consultancy focused on molecular medicine. With the Medco acquisition, "they could potentially have that competency in house. Or, this could be a really interesting opportunity for [CVS Caremark's] Generation Health to step up their game, if Express Scripts doesn't push forward in the [personalized medicine] space as rapidly as Medco has."

Express Scripts has highlighted cost containment as a key factor driving the deal. "The cost and quality of healthcare is a great concern to all Americans; this is the right deal at the right time for the right reasons," George Paz, chairman and CEO of Express Scripts, said in a statement announcing the acquisition.

As such, if the Express Scripts/Medco deal goes through, then it is likely that the merged entity will selectively advance personalized medicine in those instances where it can save money by driving evidence-based drug utilization or when comparative effectiveness research shows a compelling cost and outcomes advantage in a subpopulation of patients.

Steve Miller, Express Scripts' chief medical officer, has previously said that the healthcare system can incur savings of $106 billion if patients comply with their prescriptions, $51 billion if people use low-cost medications and generics when appropriate, and another $6 billion if patients order drugs through more cost-effective channels, such as home delivery or mail order.

"If you gross this up over the next 10 years this is over $2 trillion of wasted spend," Miller said during the 2010 Outcomes Conference, an annual meeting hosted by Express Scripts. "And we're talking about behaviors you have control over."

Medco has conducted a study showing that adoption of genetic testing to administer generic drugs does increase within the PBM system when doctors and patients are educated about testing and when patients' insurance covers the cost of testing. Presented last year at the American Society for Human Genetics annual meeting, the Medco study found that about half of more than 40,000 patients identified for the study agreed to receive PGx-guided dosing of warfarin and tamoxifen. According to Medco, these results are 45 times higher for warfarin testing and seven times higher for tamoxifen testing than when testing is conducted outside the PBM program (PGx Reporter 11/10/2010).

Although Medco has conducted studies showing that testing in this setting does improve patient outcomes that translate into savings, most insurers generally don't pay for PGx testing for tamoxifen and warfarin outside of PBM-led personalized care programs. Many payors have said these interventions currently lack the evidence needed for coverage showing they are medically necessary and improve outcomes over the standard of care.

Furthermore, public statements from Express Scripts officials on specific personalized medicine products suggest that the company's opinions on which interventions are ready for prime time may not line up with Medco's priorities. "Just because they've got the capability and all of a sudden they have doubled the covered lives that they can do studies on, that doesn’t necessarily mean they want to pull the trigger faster" on personalized medicine efforts, Batchelder said.

Focus on Lowering Costs

Response to the news of the proposed merger between Express Scripts and Medco has been mixed. Some industry observers have charged that the combined PBM behemoth could run up against anti-trust issues, and that drug companies marketing brand-name treatments would fight the merger since the PBMs make a significant portion of their revenues from dispensing generic drugs.

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Express Scripts, meantime, believes the acquisition will likely pass regulatory muster, while proponents of the deal have pointed out that the cost savings the resulting conglomerate could provide would be right in line with the federal government's efforts to rein in rising healthcare costs.

The healthcare reform law has placed a strong emphasis on lowering unnecessary spending on treatments and interventions that don’t provide a public health benefit, and has even led to the formation of an independent body, called the Patient Centered Outcomes Research Institute, to conduct comparative effectiveness research. The US Food and Drug Administration will also be integrating CER into its product reviews (PGx Reporter 04/27/2010) As such, drug developers are starting to work with payor groups and PBMs to conduct their own CER that will help identify products with the best shot at regulatory approval and reimbursement.

Personalized medicine proponents have worried that private and government payors will mainly apply CER to make reimbursement decisions for interventions for the broader population and, as a result, personalized medicines that could be clinically useful and cost effective in a genetically defined subpopulation of patients will no longer be a priority.

A merger with Medco would bolster Express Scripts' ability to conduct the types of large-scale clinical utility studies needed to prove which drugs and tests meet payors' cost and evidentiary standards for the broader population, as well as identify smaller patient subsets appropriate for personalized interventions. An Express Scripts/Medco joint entity would process well over 1 billion scripts annually and serve more than 125 million lives.

There are also signs that drug developers are keeping personalized medicine in mind when conducting CER. In June, Medco announced that its subsidiary United Biosource will work with Sanofi-Aventis to strategically decide which drugs to advance in its pipeline. Through this CER collaboration, Sanofi and United Biosource will also apply pharmacogenomics strategies to develop and prioritize personalized drugs (PGx Reporter 06/29/2011).

Express Scripts could leverage Medco's existing partnerships with pharma and test developers to assess whether certain molecular diagnostics are adding value to patient care. For example, Medco is working with SureGene, Celera, and the Laboratory Corporation of America to conduct clinical utility studies on pharmacogenomic tests marketed by these firms. Medco has also worked with Pfizer to educate doctors about tropism testing to identify best responders to the HIV drug Selzentry.

In acquiring Medco, Express Scripts would also gain significant intellectual capital in personalized medicine, as well as research ties to the FDA.

Heading up the Medco Research Institute is Robert Epstein, a major personalized medicine proponent. Last year, Medco launched a new information system at its Therapeutic Resource Center headquartered in Whitestown, Ind., that would alert specialist pharmacists of pharmacogenomic opportunities within a customer's medical record, allowing the pharmacist to become an intermediary between doctors, labs, and patients facilitating genetic testing (PGx Reporter 01/27/2010).

Additionally, Felix Frueh, former associate director for genomics at the FDA's Office of Clinical Pharmacology and Biopharmaceutics joined Medco in 2008 as its VP of personalized medicine. Soon after Frueh joined Medco, the FDA began working with the PBM to investigate the safety and efficacy of investigational and marketed drugs in genetically-defined subpopulations (PGx Reporter 08/20/2008).

Picking Out of a 'Mixed Bag'

Based on comments from Miller and other Express Scripts officials at the Outcomes Conference, it appears that at least a year ago Express Scripts was starting to evaluate on a case-by-case basis which molecular diagnostics and PGx strategies to recommend to its customers. In line with Medco's integrated information system for pharmacists, Express Scripts was also considering ways of communicating genetic testing data to physicians in an effort to influence prescribing behavior through automated decision-support tools, such as IntellAct and Express Alliance.

Launched as a pilot in 2009, IntellAct collates medical, pharmacy, and laboratory data to educate physicians retrospectively about the interventions that are improving patient outcomes, while Express Alliance is a tool for sharing medical usage information with health management vendors, health plans, and wellness companies. Both of these programs were featured as vehicles for supporting Express Scripts' personalized medicine efforts in a presentation made by Brian Seiz, VP of clinical services, at last year's Outcomes Conference.

"We think there is a lot of potential to start applying the behavioral sciences that as we … start to look at personalized medicine, we can … apply key behavioral sciences principles to drive waste [reduction] while improving patient outcomes," Seiz said in the presentation, which was webcast.

Recognizing that the availability of personal genomics services from companies such as 23andMe have raised the profile of personalized medicine in the public sphere, Seiz noted that PBMs' payor customers will increasingly want to learn how they can apply genomic medicine concepts in their systems. However, Express Scripts sees a "mixed bag" when it comes to genetic testing, with some diagnostics having proven value and others lacking clinical utility data.

"Genomics is one piece in many important points of information. Again, it's not the only piece that we will look at to treat a patient, but it can be used as an important piece of information," Seiz said at the meeting. "This is another piece of information … that we will add … to ensure that patients will get the most cost-effective medications."

Since Medco was the first PBM to broadly implement PGx and genetic testing programs, the company has gone out on a ledge to promote genetic tests to the 300 clients (representing approximately one-third of its covered members) participating in its personalized medicine program. Employers, health plans, and other benefit programs that choose to sign up can implement PGx tests for warfarin, tamoxifen, the anti-platelet drug Plavix (Sanofi-Aventis/Bristol-Myers Squibb); the leukemia drugs Gleevec (Novartis), Sprycel (BMS), and Tasigna (Novartis); and the HIV treatments Selzentry (Pfizer) and Ziagen (GlaxoSmithKline). Payors who believe it's too soon to jump into genomic medicine, however, will likely disagree with Medco about whether it is cost-effective to use genetic testing to administer some of these drugs.

For its part, Express Scripts has vetted marketed personalized medicine products and has come to its own conclusions about the utility of certain interventions — conclusions that in some cases diverge from Medco's position. For example, Seiz said at the outcomes meeting that Express Scripts wouldn’t recommend to its clients genetic testing to dose warfarin or the anticoagulant Plavix.

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"Genetics is important and maybe it helps get your starting dose of [warfarin], but it doesn't always predict how you will respond to the medication," Seiz said. "There are a lot of different items that influence how you're going to process warfarin" such as diet, medication adherence, and other medical conditions.

Medco published results from a PGx warfarin study in the Journal of the American College of Cardiology last year. The PBM reported that patients with heart conditions whose warfarin dose was guided by their genetic test results had 31 percent fewer all-cause hospitalizations and 28 percent fewer hospitalizations for bleeding or thromboembolism than patients in the control group who received warfarin using standard methods. In the same study, researchers noted that genotyped patients deemed at 'moderate' or 'high risk' of being sensitive to the drug were more likely to refill their prescriptions in the dose the physicians recommended after factoring in their genetic data.

However, one drawback of this study was that the median turnaround time for getting test results back to physicians was around a month. As a result, some experts have said that this study doesn't provide support for genetic testing when warfarin is needed to treat patients with acute conditions.

While there are other studies underway to figure out if PGx testing for warfarin is clinically useful, new anticoagulants have come on the market, such as Boehringer Ingelheim's Pradaxa and AstraZeneca's Exanta, which don't cause dose-dependent adverse reactions like warfarin does. Although Medco offers genetic testing for warfarin under its Genetics for Generics program, Pradaxa recently received preferred Tier 2 formulary status from the PBM and uptake of the new drug has been rapid. Medco's Epstein previously told PGx Reporter that while "it is great for patients and physicians to have an alternative to warfarin," the PBM will need to track "actual patient experience" to figure out "the specific subpopulations who are better served by each agent" (PGx Reporter 10/27/2010).

With regard to genetic testing for Plavix, Seiz noted that although there is data showing that diagnostics could identify slow metabolizers who may not be getting much benefit from the drug, "there are no recommendations on what to do with [that information]."

The FDA updated the labeling for Plavix last year to note that patients with diminished CYP2C19 function are at greater risk of cardiovascular adverse events after an acute coronary syndrome or percutaneous coronary intervention. The label further indicates there are available tests "to identify a patient's CYP2C19 genotype [that] can be used as an aid in determining therapeutic strategy" (PGx Reporter 03/17/2010). The drug label does tell doctors to consider alternative treatment strategies for CYP2C19 poor metabolizers, but this may not be sufficient guidance for many payors to start paying for genetic testing in this setting.

"We don’t know whether to switch patients to another drug; there is no evidence that says whether we double the dose or triple the dose," Seiz said, noting that "Plavix is a real life example of [a drug] we're not doing anything with" when it comes to PGx.

Slated to lose patent protection in May 2012, generic Plavix will soon be an option for patients alongside newer anticoagulants, such as Lilly's Effient and AstraZeneca's Brilinta, which don't have the gene-drug response issues that Plavix does. Physicians could opt for the brand name drugs so they don't put Plavix slow metabolizers at risk and avoid reimbursement uncertainties with genetic testing.

On the other hand, emerging data from a study Medco is conducting, called Genotype Guided Comparison of Clopidogrel and Prasugrel Outcomes, or GeCCO, could yield the kind of evidence payors need to cover genetic testing for Plavix, particularly when the drug goes generic. The study is investigating whether CYP2C19 extensive metabolizers treated with Plavix have the same outcomes as those treated with Effient, in terms of reductions in non-fatal MI, cardiovascular death, or nonfatal stroke. Results from this trial are expected later this year.

Meanwhile, there is at least one PGx intervention that Express Scripts does see value in. KRAS testing to identify best responders to Erbitux is "pretty black and white," according to Seiz.

"If you have [the KRAS] mutant gene you shouldn't be on that medication," he said. To give it in a genetically undifferentiated population "would be a waste of money."

During his talk last year, Seiz indicated that Express Scripts was planning to incorporate KRAS testing into its clinical programs through a prior authorization scheme. "It would be the first time we do a prior authorization on an oncology medication," he said.

Have topics you'd like to see covered in Pharmacogenomics Reporter? Contact the editor at tray [at] genomeweb [.] com.