Evolving Xolair Health Outcomes Data: What Does or Should it Mean to Patients, Clinicians and Payors

1. Allan T. Luskin, MD Associate Clinical Professor of Medicine, University of Wisconsin Director, Respiratory Institute, Dean Medical Center Madison, Wisconsin Past Chair, Patient and Public Education Committee, NAEPP Past Co-Chair, Managed Care Liaison, NAEPP Committee on Asthma Measures, AMA Asthma Expert Panel, JCAHO Respiratory Measurement Advisory Panel, HEDIS/NCQA Evolving Xolair Health Outcomes Data: What Does (or Should) it Mean to Patients, Clinicians and Payors

2. Agenda Outcomes and variability of disease and response to Rx and lack of correlation between outcomes HRQOL with particular attention to newest Xolair analysis Pharmacoeconomics: basics, specifics and what current data does and doesn’t tell us

3. Initial Guideline Approach to Asthma Only a cursory ‘phenotyping’ by severity Most adverse outcomes due to poor diagnosis, poor prescribing, poor adherence Majority of asthmatics respond to CS and b-agonists

4. Initial Guideline Approach to Asthma Only a cursory ‘phenotyping’ by severity Most adverse outcomes due to poor diagnosis, poor prescribing, poor adherence Majority of asthmatics respond to CS and b-agonists

5. Asthma is a syndrome, not a disease The Asthma phenotype is highly variable (clinically, pathologically and physiologically) Response to ALL therapy is highly variable BHR and Reversible airflow obstruction does not predict response to therapy Outcomes do not necessarily correlate with each other There are Outcome phenotypes

6. Healthcare Utilization: Difficult AsthmaBy Guideline Severity

7. Current Symptoms and MD Severity Rating

8. Asthma Severity: Patient Perception

9. Confusion, Misunderstanding, Perception and Mixed Messages Clinicians: Avoid triggers to prevent asthma Clinicians: Don’t compromise QOL to avoid triggers Patients: My asthma is well-controlled Patients: My asthma diminishes my QOL Patients: I am concerned about ‘addiction’ and side-effects

10. “Control” vs. Symptoms

11. “Control” vs. Bronchodilator Use

12. “Control” vs. Exacerbations

13. What Patients Think

14. What Patients Think

15. Underlying “Severity” and Future HCU

16. Asthma Variability:“Moderate-Severe” Asthma on b-Agonist Only12 week: mean FEV1: 64%, b-agonist: 4-5/day

17. Asthma is “Well” Controlled if in a week…. =5 days with DSS =1 (0-6 scale) =5days with no rescue b-agonist PEFRam = 80% every day =1 nocturnal awakening No exacerbations No ED visits No therapy related adverse events

18. Goal Study: Control

19. GOAL Study: Persistence of Control(of those who achieved Control)

20. Exacerbations and Effect of Therapy

21. Asthmas are variable…. …in control …in severity …in response to therapy …in natural history …in risk for adverse outcomes …in the relationship among features of disease …in the relationship between outcomes

22. Dimensions of ControlHow the Disease Affects the Organism Physiology Symptoms (nocturnal, exercise) Quality of life and Activities of Daily Living Medications (adverse events, adherence) Health Care Utilization (function of exacerbations) Comorbidities

24. Outcomes Functional Symptoms/Medication Use Exacerbation Global: QOL, ADL Physiologic Lung function/BHR Progression Pathologic (Inflammation) Sputum eos/ eNO Economic Direct and indirect

25. Asthma and HRQOL: The Burden

26. Asthma-Specific HRQL and Costs:Asthma Costs over a 12 month Follow-up

27. Clinical Predictors of HRQL

28. Mental Distress and HRQOLPrevalence Rates in Adult Asthmatics

29. The ATAQ Questionnaire: Scoring 1 barrier each if: NO or UNSURE to “did you feel your asthma was well-controlled” YES or UNSURE to “missed work/school/activities” in past 4 weeks or 12 months YES or UNSURE to “waking at night” in past 4 weeks or 12 months Used 9 or more puffs of quick relief inhaler Total: 0 to 4 barriers

30. Rates (Unadjusted) of Acute Asthma Events by Baseline Level of Asthma Control

31. Goals of Therapy Improve Lung Function Prevent exacerbations Reduce symptoms Improve QOL Reduce burden of disease and therapy Prevent progression

32. “...the Asthma Is Controlled!”

33. Key Points of Emphasis: Patient’s health-related quality of life was evaluated during asthma therapy with ICS alone or in combination with omalizumab in order to obtain a holistic view of the patient’s health status. AQLQ is comprised of 32 questions which construct four domains: Activities, emotions, symptoms, exposure (to environment) All questions receive equal weight AQLQ overall score and each domain score range from 1 to 7, with higher scores indicating improvement in quality of life Overall score calculated as the mean score of all questions AQLQ has been validated and tested for both reliability and responsiveness Key Points of Emphasis: Patient’s health-related quality of life was evaluated during asthma therapy with ICS alone or in combination with omalizumab in order to obtain a holistic view of the patient’s health status. AQLQ is comprised of 32 questions which construct four domains: Activities, emotions, symptoms, exposure (to environment) All questions receive equal weight AQLQ overall score and each domain score range from 1 to 7, with higher scores indicating improvement in quality of life Overall score calculated as the mean score of all questions AQLQ has been validated and tested for both reliability and responsiveness

34. % Patients with ?0.5 Unit Change in AQLQ From Baseline to End of Steroid-Reduction (Busse) Key Points of Emphasis: This slide presents the percentage of patients achieving a small clinically significant improvement in QOL scores during treatment with omalizumab or placebo from baseline to the end of the steroid-reduction phase (28-week treatment period).11 Omalizumab produced a significant and small clinically meaningful improvement in asthma-related QOL (all domains) compared with placebo and particularly in the most relevant domains for an asthmatic patient: activity and symptoms. Improvements in QOL were maintained in addition to the reduction in the requirement for ICS in patients receiving omalizumab. Improved patient compliance with ICS may partly explain the improvements in QOL experienced in placebo-treated patients. Key Points of Emphasis: This slide presents the percentage of patients achieving a small clinically significant improvement in QOL scores during treatment with omalizumab or placebo from baseline to the end of the steroid-reduction phase (28-week treatment period).11 Omalizumab produced a significant and small clinically meaningful improvement in asthma-related QOL (all domains) compared with placebo and particularly in the most relevant domains for an asthmatic patient: activity and symptoms. Improvements in QOL were maintained in addition to the reduction in the requirement for ICS in patients receiving omalizumab. Improved patient compliance with ICS may partly explain the improvements in QOL experienced in placebo-treated patients.

35. % of Patients With ?1.5 Unit Change in AQLQ From Baseline to End of Steroid Reduction (Busse) Key Points of Emphasis: This slide presents the percentage of patients achieving a large clinically significant improvement in QOL scores during treatment with omalizumab or placebo from baseline to the end of the steroid-reduction phase (28-week treatment period). 11 Omalizumab produced a significant and large clinically meaningful improvement in asthma-related QOL (all domains) compared with placebo and particularly in the most relevant domains for an asthmatic patient: activity and symptoms. Improvements in QOL were maintained in addition to the reduction in the requirement for ICS in patients receiving omalizumab. Improved patient compliance with ICS may partly explain the improvements in QOL experienced in placebo-treated patients. Key Points of Emphasis: This slide presents the percentage of patients achieving a large clinically significant improvement in QOL scores during treatment with omalizumab or placebo from baseline to the end of the steroid-reduction phase (28-week treatment period). 11 Omalizumab produced a significant and large clinically meaningful improvement in asthma-related QOL (all domains) compared with placebo and particularly in the most relevant domains for an asthmatic patient: activity and symptoms. Improvements in QOL were maintained in addition to the reduction in the requirement for ICS in patients receiving omalizumab. Improved patient compliance with ICS may partly explain the improvements in QOL experienced in placebo-treated patients.

36. Improved Asthma-Related Quality of Life Pivotal Studies 008, 009 Clinically relevant improvement is 0.5 1.5 is a big change Totally consistent with the change in all other efficacy parameters measuredClinically relevant improvement is 0.5 1.5 is a big change Totally consistent with the change in all other efficacy parameters measured

37. Adelroth. JACI 2000;106:253-259 Anti-IgE: QOL in SAR

38. AQLQ: Symptom Domain

39. AQLQ: Activities Domain

40. AQLQ: Emotions/Environment Domain

41. “Wake up in the morning with Symptoms”

42. “Overall Range of Activities”

43. “Afraid of not having medication available”

44. “Experience symptoms from dust”

45. % Hardly Any or No Asthma-Related Limits

46. Summary and Conclusions Consistent and positive impact of omalizumab on AQLQ overall and domain scores (p<0.05) Specific drivers of improvement in each of the domains were noted Correlations between AQLQ and other clinical outcomes were low-moderate r=0.14 to r=0.60

47. Summary and Conclusions (cont) Symptoms Domain: “Waking with symptoms in the morning” p<0.001 Activities Domain “all activities done” p<0.001 Emotions Domain “fear of not having medication available” p<0.01 Environment Domain “symptoms from being exposed to dust” p<0.001

48. Summary and Conclusions (cont) ARQL assessment provides non-overlapping information on clinical benefit distinct from other outcomes Examination of variability in mean scores reveals item-level responses strongly influence symptom and activity improvement Symptoms likely to be important to patients are significantly improved by omalizumab compared to placebo in patients with mod-severe asthma

49. Health-Care Utilization:Omalizumab vs. Placebo

50. Cost of Therapy~0.5 exacerbations/pt/year (~1 in pts on po CS) compared to pl

51. Cost of Symptom Free Day

52. Xolair Cost-Effectiveness:Issues with Current Data RCT data not representative of “real-world” Overestimates placebo arm Underestimates active drug arm Placebo and Protocol effect 67% of placebo patients improved at 1 year ED visits and likely hospitalizations lower because of use of study investigator and with more frequent OV than usual

53. Xolair Cost-Effectiveness:Issues with Current Data RCT data not representative of “real-world” Overestimates placebo arm Underestimates active drug arm Placebo and Protocol effect 67% of placebo patients improved at 1 year ED visits and likely hospitalizations lower because of use of study investigator and with more frequent OV than usual

54. Xolair Cost-Effectiveness:Issues with Current Data Hospitalization rate ~16% in the literature Placebo-3% Xolair-<1% Dropout rates for Rx failure not quantified 14:1 placebo:xolair QALY not used comparisons with other drugs not valid No data on economic benefit of AQLQ (QOL)

55. Conclusions reflect studies that were designed to assess efficacy, rather than effectiveness Conclusions dependent on key assumptions about dosing and efficacy in a controlled clinical setting--not actual clinical practice Retrospective C-E analyses have limited generalizability to actual clinical practice If the RCT underestimate benefits patients achieve in actual clinical practice, then C-E ratios for omalizumab are overestimated

56. Without assessing cost and efficacy in the same patient population, direct comparisons of cost-effectiveness are misleading Incremental C-E ratios for other asthma therapies should only provide context: ICS, LTRAs, and ICS-LABA combination are indicated for different patient populations Omalizumab is indicated for patients with moderate-to-severe persistent IgE-mediated asthma who have failed other therapy

57. Identifying eligible patients based on “break-even” criteria for cost-effectiveness would exclude most patients the clinical benefit that a therapy like omalizumab can deliver Omalizumab is intended to address the disease process to prevent exacerbations and related cascade of healthcare utilization Patients with persistent IgE-mediated asthma who may benefit significantly from omalizumab therapy are likely to be excluded from receiving therapy

58. Public Health Impact of Omalizumab in High-Risk Patients Risk difference: omalizumab prevented exacerbations in about 17 additional patients for every 100 treated Prevented fraction: 50% of potential exacerbations were prevented by treatment with omalizumab Number needed to treat: 5.7 patients needed to be treated with omalizumab to maintain 1 patient free of an exacerbation Key Educational Message: Findings from this analysis show that for every 100 patients treated during the stable-steroid phase, omalizumab prevented the development of exacerbations in about 17 additional patients. Key Managed Care Educational Message: High-Risk Severe Asthma while low in prevalence is high in utilization. Providing greater asthma control for this patient type eliminates the utilization of costly services and enhances patient quality of life measures, thus increasing the value of therapy as evidenced by the low number needed to treat to maintain 1 patient free of an exacerbation. Key Points of Emphasis: Ninety-four percent of exacerbations in this high-risk population required treatment with systemic corticosteroids, and in clinical practice, these exacerbations are likely to constitute medical emergencies that may result in ER visits, hospitalization, or death. Therefore, it is of clinical and economic interest to determine the number of patients whose treatment with omalizumab prevented them from experiencing any potentially fatal and costly exacerbations. Omalizumab prevented the development of exacerbations in 17 additional patients for every 100 treated. This corresponds to a prevented fraction of 50% in the incidence of exacerbations in patients randomized to omalizumab.13 The risk difference translated to the need to treat 5.7 patients with omalizumab to maintain 1 patient free of exacerbations.13 As a comparison, a meta-analysis of studies comparing the addition of salmeterol to low-moderate doses of inhaled corticosteroids with increasing dose of inhaled corticosteroids found that addition of salmeterol to the treatment of nearly 40 patients was necessary to prevent exacerbations in 1 additional patient. (Shrewsbury 2000. BMJ) These results are of particular economic significance considering that the cost of treating acute asthma attacks is far greater than the cost of providing preventive drug treatment.2Key Educational Message: Findings from this analysis show that for every 100 patients treated during the stable-steroid phase, omalizumab prevented the development of exacerbations in about 17 additional patients. Key Managed Care Educational Message: High-Risk Severe Asthma while low in prevalence is high in utilization. Providing greater asthma control for this patient type eliminates the utilization of costly services and enhances patient quality of life measures, thus increasing the value of therapy as evidenced by the low number needed to treat to maintain 1 patient free of an exacerbation. Key Points of Emphasis: Ninety-four percent of exacerbations in this high-risk population required treatment with systemic corticosteroids, and in clinical practice, these exacerbations are likely to constitute medical emergencies that may result in ER visits, hospitalization, or death. Therefore, it is of clinical and economic interest to determine the number of patients whose treatment with omalizumab prevented them from experiencing any potentially fatal and costly exacerbations. Omalizumab prevented the development of exacerbations in 17 additional patients for every 100 treated. This corresponds to a prevented fraction of 50% in the incidence of exacerbations in patients randomized to omalizumab.13 The risk difference translated to the need to treat 5.7 patients with omalizumab to maintain 1 patient free of exacerbations.13 As a comparison, a meta-analysis of studies comparing the addition of salmeterol to low-moderate doses of inhaled corticosteroids with increasing dose of inhaled corticosteroids found that addition of salmeterol to the treatment of nearly 40 patients was necessary to prevent exacerbations in 1 additional patient. (Shrewsbury 2000. BMJ) These results are of particular economic significance considering that the cost of treating acute asthma attacks is far greater than the cost of providing preventive drug treatment.2

59. Societal Burden of Asthma Calculating societal burden of asthma requires assessment of both direct and indirect costs Direct costs include Costs attributed to medical care (office visits, hospitalizations, emergency visits, medications, etc.) Indirect costs Dollars expended by the patient, family, employer, and/or society because of illness (including loss of productivity and quality of life) Can be determined using either a cost of illness or cost of wellness approach

60. Cost of Illness Approach Traditional view of government and other third party payers Determines costs by multiplying average medical costs for one person with asthma by the total number of expected patients in the population Focused on direct cost of care Minimal emphasis on prevention or long-term control

61. There are lots of examples of cost-effectiveness analysis to be found in the literature, and in the press This one appeared in the Wall Street Journal just a few days ago I’d suggest that this is probably NOT how we should look at management of disease like asthma Not that different from the way that one of our competitors is “spinning” their pharmacoeconomic data - they’re essentially arguing that they realize that patients are less adherent to their chronic asthma controller medication, but in the long run this is good because it saves in drug costs, lowering the overall cost of care. Is this the right way to interpret health economic data?? We aren’t sure, which is why we’ve asked you to help us in the development of an approach to doing health outcomes analyses. There are lots of examples of cost-effectiveness analysis to be found in the literature, and in the press This one appeared in the Wall Street Journal just a few days ago I’d suggest that this is probably NOT how we should look at management of disease like asthma Not that different from the way that one of our competitors is “spinning” their pharmacoeconomic data - they’re essentially arguing that they realize that patients are less adherent to their chronic asthma controller medication, but in the long run this is good because it saves in drug costs, lowering the overall cost of care. Is this the right way to interpret health economic data?? We aren’t sure, which is why we’ve asked you to help us in the development of an approach to doing health outcomes analyses.

62. Cost of Wellness Approach Goal of wellness is to minimize expenses caused by treatment failures and enhance productivity Direct costs targeted for preventative health care and use of effective controller medications Indirect costs are used for environmental control, lifestyle changes, and other interventions that promote better health On balance, an investment in wellness promotes Enhanced disease control Greater productivity at work or school Improved quality of life

63. The upfront investment in wellness has potential returns both in terms of direct and indirect costs. According to Cisternas et al. (2003), pharmaceuticals are the largest contributor to total health care costs in asthma. It is interesting to note that as disease severity increases from mild to severe, the percentages of total costs attributed to medication declines from 47% to 19%. Effective controller medications have been demonstrated to reduce other high-cost components of health care including hospitalizations. The expenses of the treatment failures are magnified in indirect costs. The Cisternas et al study also demonstrates that as disease severity increases, indirect costs increase from 22% to 46% of the total asthma costs, illustrating that investment in wellness might have its greatest effect in its reduction of indirect expenses measured on the basis of increased productivity and fewer days of school and work lost. In addition, there is an intrinsic value in feeling well that is difficult to quantify in monetary terms. Cisternas MG, et al. J Allergy Clin Immunol 2003;111:1212-8.The upfront investment in wellness has potential returns both in terms of direct and indirect costs. According to Cisternas et al. (2003), pharmaceuticals are the largest contributor to total health care costs in asthma. It is interesting to note that as disease severity increases from mild to severe, the percentages of total costs attributed to medication declines from 47% to 19%. Effective controller medications have been demonstrated to reduce other high-cost components of health care including hospitalizations. The expenses of the treatment failures are magnified in indirect costs. The Cisternas et al study also demonstrates that as disease severity increases, indirect costs increase from 22% to 46% of the total asthma costs, illustrating that investment in wellness might have its greatest effect in its reduction of indirect expenses measured on the basis of increased productivity and fewer days of school and work lost. In addition, there is an intrinsic value in feeling well that is difficult to quantify in monetary terms. Cisternas MG, et al. J Allergy Clin Immunol 2003;111:1212-8.

64. Summary: Burden of Asthma Costs increase with disease severity Relative costs of medications decrease as asthma worsens Interventions such as effective controller medications that minimize severity can reduce costs Savings accrued from a 5% shift in the proportion of patients from severe to moderate asthma is estimated to be $1.4 billion dollars annually Feeling well has an intrinsic value that is difficult to quantify in monetary terms

65. Asthma Costs Rise with Severity Asthmas costs rise significantly with severity. In one recent study from northern California, the severe cohort had average per-patient costs more than five times greater than the mild cohort, and nearly three times greater than the moderate cohort. Although the severe cohort (n=64) was less than a third the size of the mild cohort (n=200), its total costs ($820,032) were 55% higher than the total costs ($529,200) of the mild cohort.Asthmas costs rise significantly with severity. In one recent study from northern California, the severe cohort had average per-patient costs more than five times greater than the mild cohort, and nearly three times greater than the moderate cohort. Although the severe cohort (n=64) was less than a third the size of the mild cohort (n=200), its total costs ($820,032) were 55% higher than the total costs ($529,200) of the mild cohort.

66. Lack of Consistency in Utilization Pitfall of the 20-80 Rule

67. Hospital Care Inpatient $2B ER $500M Hosp outpatient $700M Physician Services Inpatient care $110M Office Visits $740M Prescriptions $3.2B Pharmacist Services Economic Burden of Asthma in the U.S.

68. Direct and Indirect Asthma Costs Estimated direct and indirect costs in 1998 = $11.3 Billion. Asthma is the fifth most common cause of workplace limitation. 1997-1998 annual asthma-specific treatment charges in a managed care setting were $927 per asthmatic. 1992 cost of treating asthmatic children was $615 and had larger non-asthma- related direct medical expenses in the asthmatic population than among controls.

69. Annual Direct Cost of Treating Asthma Patients: Impact of Severe Asthma The impact of severe asthma treatment is even more dramatic. High cost patients make up 20% of asthmatics who account for 80% of the direct costs of treating the disease. The impact of severe asthma treatment is even more dramatic. High cost patients make up 20% of asthmatics who account for 80% of the direct costs of treating the disease.

70. Annual Cost of Asthma Care/ Member This chart demonstrates that the annual cost of asthma care per member is directly affected by the type of services used by the patient. For example, a controlled patient (the far right column) is $450 per year, with the patient with more than 1 hospital admission at $5,000 per year. 4% of all asthma patients use 50% of asthma dollars. Controlling asthma is a clinical and a financial goal since there is significantly less morbidity and is less than 40% as costly to treat. This chart demonstrates that the annual cost of asthma care per member is directly affected by the type of services used by the patient. For example, a controlled patient (the far right column) is $450 per year, with the patient with more than 1 hospital admission at $5,000 per year. 4% of all asthma patients use 50% of asthma dollars. Controlling asthma is a clinical and a financial goal since there is significantly less morbidity and is less than 40% as costly to treat.

71. Total Health Care ExpendituresModerate-Severe Asthma vs Non-Asthmatics

72. Cost of Asthma to Employers

73. Cost of Asthma to Employers

74. Work Loss in Parents of AsthmaticsChildren 6-16 y/o with persistent asthma (GINA = 2)

75. Kemp P Harvard Business Review. October 2004. Presented in part at AAAAI, 2001. Based on data from Bank One, Chicago, 2000 Cost of Illness

76. Effect of Presenteeism

77. Effect of Presenteeism

78. Cost-Sharing In an attempt to reduce costs, payors will shift costs to patients: “consumer-driven health plans” Utilization control and influence choice This will demand a FULLY educated consumer We will need to help patient evaluate the full cost-benefit (not just HCU but QOL)

79. Rx Noncompliance due to Costs

81. Omalizumab: Patients Likely to Benefit Patients using oral corticosteroids on a regular basis Inadequate control despite ICS and LABA or LM “Controlled” with high-dose ICS Patients not tolerant of other medications Patients who are not adherent to prescribed therapy Occupational exposure Patients with comorbid allergic conditions (allergic rhinitis, eczema, food allergy, latex allergies) “Controlled” due to lifestyle adaptation In combination with immunotherapy Rush IT Additive to IT KEY POINT: There are many patient types that could potentially benefit from Xolair therapy. But based upon the available clinical data and the current healthcare environment, who are the most appropriate patient types for Xolair therapy today? KEY POINT: There are many patient types that could potentially benefit from Xolair therapy. But based upon the available clinical data and the current healthcare environment, who are the most appropriate patient types for Xolair therapy today?

82. Discussion Questions Are the current outcomes that we consider in the treatment algorithm for asthma adequate? If not, what else should we be considering? What are the benefits and challenges of looking at these other outcomes? What endpoints would help clarify and communicate the value proposition for Xolair?  What indirect costs are most strongly associated with poor control of asthma symptoms? With increasing focus on the concept of control, should we rethink the conventional cost-effectiveness approach for asthma interventions? Is an outcome measure other than the symptom free-day warranted? Should analyses take into account the significant burden associated with indirect costs that may be mitigated by therapies that reduce activity limitations?

83. Discussion Questions Are the current outcomes that we consider in the treatment algorithm for asthma adequate? If not, what else should we be considering? What are the benefits and challenges of looking at these other outcomes? What endpoints would help clarify and communicate the value proposition for Xolair? 

84. Discussion Questions What indirect costs are most strongly associated with poor control of asthma symptoms? With increasing focus on the concept of control, should we rethink the conventional cost-effectiveness approach for asthma interventions? Is an outcome measure other than the symptom free-day warranted? Should analyses take into account the significant burden associated with indirect costs that may be mitigated by therapies that reduce activity limitations?