This document summarizes a presentation on the health economics of immunotherapy. It discusses trends showing increasing allergic rhinitis prevalence and expenditures dominated by prescription medications. While evidence demonstrates clinical and economic benefits of immunotherapy (SIT), access, coverage, and utilization have not increased. Two studies of Medicaid patients are summarized, finding poor adherence to SCIT and economic benefits of $800-5,400 annually from SIT versus symptomatic treatment. Overall it argues more work is needed to demonstrate SIT value to increase acceptance and adoption.

1. The Present: Health Economics and Immunotherapy Linda Cox, MD, FAAAAI, FACAAI, FACP 1 Many of the slides provided with permission by Cheryl Hankin, PhD A portion of this research was jointly funded by the American Academy of Allergy, Asthma, and Immunotherapy and the American College of Allergy, Asthma, and Immunology

3. AAAAI-Secretary/Treasurer

4. Joint Task Force on Practice Parameters-member

5. ABAI Board of Directors -memberCheryl Hankin , Ph.D. President and Chief Scientific OfficerBioMedEcon LLC Health Economics and Outcomes Research Ph.D. in ClinicalPsychology Two-year postdoctoral fellowship in Pharmacoeconomics and Outcomes Research Research funding from AAAAI/ACAAI & JCAAI Julie Andrews in Victor Victoria (1982)

6. Learning objectives At the end of the session attendees will be able to discuss: The evidence demonstrating the clinical and economic comparative effectiveness of SIT Potential gaps in SIT access, coverage, reimbursement, and utilization Adherence to immunotherapy: problems and potential solutions 3

7. Discussion points The Present Increased body of evidence demonstrates the clinical and economic comparative effectiveness of SIT However, SIT access, coverage, reimbursement, and utilization has not gained ground The Past Must be critically evaluated to identify gaps Can direct our course The Future Requires identification, understanding, collaboration, learning, and then education Identify constituents Understand needs that will compellingly support AIT value propositions for each constituent Collaborate so that outcomes of efforts are meaningful Learn!!! Then educate… The role of AIT as “preventive care” may be key Poor adherence (even in the face of extraordinary efficacy) always = failure This needs to be addressed for AIT adoption /acceptance by the non-A/I health care community 4

8. Trends in Total Annual AR-Related Expenditures: 2000 to 2005 5 % Distribution of Total U.S. AR-Related Expenditures Prescription medications consistently account for over half of U.S. AR-related health care expenditures Shares in treatment type have not changed despite increase in published research demonstrating benefits of SIT Soni A. Allergic rhinitis: Trends in use and expenditures, 2000 and 2005. Statistical Brief #204, 2008. Note that dollars originally reported in USD 2005 were adjusted o USD 2010 values using the U.S. Department of Labor Bureau Consumer Price Index for Health Care (http://data.bls.gov/cgi-bin/surveymost?cu) .

9. Trends in the U.S. Estimated Prevalence of AR: 2000 and 2005 6 Based on the Household Component of the Medical Expenditure Panel Survey Respondents reported experiencing related symptoms, visiting a physician, or obtaining a prescription drug to treat allergic rhinitis. Total U.S. AR-related expenditures nearly doubled from 2000 to 2005 U.S. Estimated Prevalence of AR: 2000 and 2005  85% % of Total U.S. Population $ Billions 22 Million In both 2000 and 2005, more females reported experiencing allergic rhinitis than males (7.6 percent versus 4.9 percent in 2000 and 8.2 percent versus 6.4 percent in 2005).Differences between females and males significant (P<.05) for both 2000 and 2005. Soni A. Allergic rhinitis: Trends in use and expenditures, 2000 and 2005. Statistical Brief #204, 2008.

10. U.S. SCIT Penetration is Minimal 2006 US Allergic Rhinitis Sales — Total Sales = $6.72 B $1252% $1,10016% $5,49782% Rx OTC Immunotherapy Sources: Rx figures from IMS; OTC figures from Chain Drug Review; Immunotherapy based on average of several sources

11. Source of A/I Practice Revenues 8 AIT per new patient visit was 29% in 2009, 33% in 2010, and thus far 27% in 2011: includes old AIT patient restarting Provided with permission David Brown, MD president of Allergy Partners

12. Source: physician diary survey provided with permission Schering-Plough Source: market research, provided with permission by Greer

13. Perceptions of Barriers to Subcutaneous Immunotherapy By Specialty Significantbarrier Not a barrier Source: Market Research Survey, April 2007.

14. Immunotherapy market US & Rest of World 15% Germany 32% Northern Europe 14% Italy 11% France 15% Spain 13% Currently: SIT in the U.S. Received by few potentially appropriate patients (2%-3%)1,2 High rates of premature discontinuation2,3 Wide variation in initiation and persistence by demographic, illness, and insurance characteristics2,3 Provided with permission by Stallergenes 1. Donahue et al . Ann Allergy Asthma Immunol 1999;82:339-47. 2. Hankinet al, . J Allergy ClinImmunol 2008;121:227-32. 3. Hankin, LockeyJ Allergy ClinImmunol 2011;127(1):46-8.

15. SCIT Adherence in US Published Studies 12 Hankin CS, Lockey RF. Patient characteristics associated with allergen immunotherapy initiation and adherence. J Allergy ClinImmunol. 2011;127(1):46-8, 8 e1-3.

16. SCIT Adherence in US Published Studies 258 patients were private and 57 were nonprivate. 59% (n = 152) of private patients and 46% (n = 26) of nonprivate patients were compliant Hankin CS, Lockey RF.. J Allergy ClinImmunol. 2011;127(1):46-8, 8 e1-3.

17. SLIT: What About Adherence/Compliance? Swim With Dolphins, Cut DepressionDesignA trainer directed half of each session; patients played freely with the dolphins during remainder Control group was given an equal amount of attention from human staff. Results. Greater reduction in mean severity of the depressive symptoms in the dolphin therapy group than in the control group

18. SLIT Adherence

19. Children’s compliance with allergenimmunotherapy according to administration routes Open study 1998 to 2003 comparing SCIT (1886 pts), SLIT (806 pts), LNIT (82 pts) 1234 hospital setting, 1540 private Coverage for immunotherapy services varied per region “Noncompliance” SCIT 10.9% vs SLIT 21.5% (p<.0005) Panjo et al JACI 2005;116

20. Comparison of Reason for Discontinuation Of Immunotherapy Between Different Administration Routes Panjo et al JACI 2005;116:1380-81

22. 76.3% of pts at 3 months

23. 74.8% at 6 months

24. By coverage status: higher compliance group:

25. 81% of full coverage group

26. 70% of partially covered group

27. 82% of pts with no coveragePassalacqua JACI;2006:177

29. How many of the same SLIT prescriptions were prescribed as renewals in subsequent years, until 2009.

30. In Italy SLIT is a named patient product, and each treatment sold can be tracked19 Senna et al, J Allergy Clin Immunol. 2010;126(3):668-9

31. Is Proving Treatment Efficacy/ Safety Sufficient?What Cost-effectiveness? 20

32. Public and Private Payer “Push Back”: The Zero-Sum Game Oregon Medicaid, Spring 2010 Prioritized List: AR on Line 573 Below the current funding line (Line 502) “Most patients with AR will not qualify for any treatment for the condition. Patients who also have asthma have immunotherapy available to them on Line 11.” PRIORITIZATION OF HEALTH SERVICES A Report to the Governor and the 76th Oregon Legislative Assembly 2011 Condition: SPASTIC DYSPHONIA Treatment: MEDICAL THERAPY Line: 584 Condition: MACROMASTIA Treatment: BREAST REDUCTION Line: 585 Condition: ALLERGIC RHINITIS AND CONJUNCTIVITIS, CHRONIC RHINITIS Treatment: MEDICAL THERAPY Line: 586 (line 574 in 2008) Condition: CANCER OF LIVER AND INTRAHEPATIC BILE DUCTS Treatment: LIVER TRANSPLANT 21

33. Health Economics of SIT (15 Studies from 1995 to 2011) 22 Poor outcomes for SIT are shown in red font. AR = allergic rhinitis; Clin = clinical; FU = follow-up; MR = medical records review; RC = retrospective claims analysis; SDT = symptomatic drug therapy; SIT = allergen-specific immunotherapy; SLIT = sublingual immunotherapy.

34. Pharmacoeconomics of allergen immunotherapy compared with symptomatic drug treatment in patients with allergic rhinitis and asthma Method: 30 pts (mean age, 35 yrs ) with Parietaria-induced rhinitis & asthma randomized to SCIT (20 pts) or medications (10 pts) for 3 years Inclusion: PST >5 mm wheal, AR + Ashma (GINA class 2 or 3) for 2 years Evaluated before treatment and annually for 6 years in the pollen period Nose, eyes, and lung symptom scores, and drug consumption via patent diary Economic costs: pt registered monthly:# of medical visit, medications, allergy injections Ariano et al, Allergy Asthma Proc 2006;27

35. Pharmacoeconomics of allergen immunotherapy Significant improvement in symptom scores and medication use after 1st year of treatment Ariano et al, Allergy Asthma Proc 2006;27

36. Sustained significant reductions in cost beginning in the 3rd year subcutaneous allergen immunotherapy Results: significant difference in costs favor of SIT vs control 15% the second year 48% the third year (80% reduction ) 80% reduction maintained up to 6th year, 3 years after stopping immunotherapy Net saving per patient: $830/year. Conclusion: SCIT has significant economic advantages over pharmocotherapy alone Ariano et al Allergy Asthma Proc 2006;27

38. Sullivan 2000: $8,851/5 years = $1,770 annual benefit for SITvs SDT among patients with AR

39. Hankin 2008: $401/6 months = $802 median annual benefit for SIT(children with AR in the 6 months after SIT discontinuation vs 6 months prior to SIT initiation)

40. Hankin 2010: $1,625/18 months = $1,218 mean annual benefit for SITamong children with AR vs match controls not receiving SIT

42. Exploratory Study: Pre-Post SCIT Study in Children Hankin CS, Cox L, Lang D, et al. J Allergy ClinImmunol2008;121:227-32.

43. (among 4,807,429 total Florida Medicaid enrollees) No IT at any time during study period (N=99,342) Newly-diagnosed AR Patients aged < 18 years (N=102,390) < 4 years of data following 1st AR dx (N=2,358) Rec’d IT at any time during study period (N =3,048) IT preceded 1st AR dx (N=170) Sample Identification > 4 years of data following 1st AR dx (N=690) < 6 months FU data after last IT admin (N=166) IT followed 1st AR dx (N=520) 3.0% of children with AR received IT > 6 months FU data after last IT admin (N=354) Hankin CS, Cox L, Lang D, et al. J Allergy ClinImmunol2008;121:227-32.

45. The mean duration of treatment was 17 months (SD 17.6). Hankin CS, Cox L, Lang D, et al. J Allergy ClinImmunol2008;121:227-32.

47. Compared health care use and costs of SAME CHILDREN 6 months pre-SIT initiation versus 6 months post-SIT discontinuation31 Hankin CS, Cox L, Lang D, et al. Allergy immunotherapy among Medicaid-enrolled children with allergic rhinitis: Patterns of care, resource use, and costs. J Allergy ClinImmunol2008;121:227-32.

49. AR = ICD-9 code 477.X. IT = CPT 95115, 95117, 95120, 95125,95144, 95165, 95180, and 95199.

50. Comorbid allergy-related illness: Asthma = 493.X; Atopic dermatitis = 691.8; Conjunctivitis = 372.X

51. Newly diagnosed AR = those whose first AR diagnosis was preceded by a full year in which no AR diagnoses occurred

52. De novo immunotherapy = first documented immunotherapy claim followed (rather than preceded) their first AR diagnosis Analysis: Data were highly skewed Wilcoxon signed rank tests to compare the groups’ 18-month median per-patient health care use and costs Health care components included total inpatient stays, total outpatient visits , total pharmacy fills, and total health care use. 32 Hankin CS, Cox L, Lang D, Ann Allergy Asthma Immunol2010;103:79-85.

53. 1-to-5 match Each IT-treated patients was matched on up to 5 controls based on age at first AR diagnosis, sex, race/ethnicity, and (4) diagnosis of asthma (493.X), conjunctivitis (372.X), or atopic dermatitis (691.8). No AR dx (n=3,208,639) Pts aged <18 yrs (1997-2007) (N=3,472,786) AR dx in yr before 1st AR dx (n=82,326) Only one IT (n=909) IT in yr preceding 1st AR dx (n=139) AR-dx (n=264,147) Pool of control candidates <2 IT admin at any time after 1st AR dx (n=177,111) No AR dx in yr before 1st AR dx (n=181,821) No IT (n=176,202) Represents number of children with AR diagnosis from 1997 to 2007= 7.6% (264,147 / 3,472,786) No IT in yr preceding 1st AR dx (n=181,682) <18 mo of data after 1st IT (n=1,586) ≥2 IT admin at any time after 1st AR dx (n=4,571) “ IT-Treated Patients” Represents newly- AR- diagnosed children = 5.2% (181,821 / 3,472,786) ≥18 mo of data after 1st IT (n=2,985) Represents newly-AR-diagnosed children receiving course of de novo IT= 2.5% (4571 / 181,821) 33 1. Hankin CS, Cox L, Lang D, et al. Allergen immunotherapy and health care cost benefits for children with allergic rhinitis: a large-scale, retrospective, matched cohort study. Ann Allergy Asthma Immunol2010;103:79-85.

55. Compared 18-month health care use and costs: SIT versus matched non-SIT groups*34 Hankin CS, Cox L, Lang D, et al. Allergen immunotherapy and health care cost benefits for children with allergic rhinitis: a large-scale, retrospective, matched cohort study. Ann Allergy Asthma Immunol2010;103:79-85.

56. COST-EFFECTIVENESS ATTRACTS MEDIA ATTENTION 35

57. 36

58. 37 Does Allergen-Specific Immunotherapy Provide Cost Benefits for Children and Adults with Allergic Rhinitis? Results from Large-Scale Retrospective Analyses Jointly Funded by AAAAI and ACAAI Cheryl Hankin, PhD;1 Linda Cox, MD;2 Zhaohui Wang, MS;1 Amy Bronstone, PhD11BioMedEcon, LLC, Moss Beach, CA2Nova Southeastern University College of Osteopathic Medicine, Fort Lauderdale, FL Session #274 March 19, 2011, 2:00-3:15 pm Presented at the 2011 Annual Meeting of the American Academy of Allergy, Asthma, and Immunotherapy, March 18-21, 2011 San Francisco, CA Research jointly funded by the American Academy of Allergy, Asthma, and Immunotherapy and the American College of Allergy, Asthma, and Immunology

59. Identification of Children Newly Diagnosed with AR Who Received De Novo SIT (for Matching) Medicaid Children (<18 yrs) 7/97-6/08 N=3,604,711 <1 year of data preceding 1st AR claim (“index diagnosis”) with no AR claim filed N=88,688 No AR N=3,310,933 No SIT N=198,729 SIT in prior year N=145 AR N=293,778 <2 SIT admin after index AR dx N=199,772 ≥1 year of data preceding 1st AR claim (“index diagnosis”) with no AR claim filed N=205,090 <18 months of data following 1st SIT N=1,618 ≥2 SIT admin after index AR dx N=5,173 For children, there were 3,305 SIT patients matched to 13,151 non-SIT patients. No SIT in prior year N=204,945 ≥ 18 months of data following 1st SIT N=3,555 38 Hankin et al, Session #274 March 19, 2011 Presented at the 2011 AAAAI

60. Identification of Adults Newly Diagnosed with AR Who Received De Novo SIT (for Matching) <1 year of data preceding 1st AR claim (“index diagnosis”) with no AR claim filed N=29,505 1 SIT N=657 SIT in prior year N=127 No SIT N=58,725 No AR N=2,917,762 Medicaid Adults (≥18 yrs) 7/97-6/08 N=3,008,865 < 2 SIT admin after index AR dx N=59,382 No SIT in prior year N=61,471 <18 months of data following 1st SIT N=590 ≥1 year of data preceding 1st AR claim (“index diagnosis”) with no AR claim filed N=61,598 AR N=91,103 ≥ 18 months of data following 1st SIT N=1,499 ≥2 SIT admin after index AR dx N=2,089 For adults, there were 1,306 SIT patients matched to 5,137 non-SIT patients. Hankin et al, Session #274 March 19, 2011 Presented at the 2011 AAAAI

61. Adults: Significant and progressive differences in all components of health care costs including hospitalization 11-year (1997-2008) retrospective matched cohort claims analysis of Florida Medicaid-enrolled adults newly diagnosed with AR compared 18-month health care use and costs of patients who received SIT and a matched cohort who did not receive SIT* 40

62. Mean, per-Patient, 18-Month Savings for Children with Newly Diagnosed AR Who Received versus Did Not Receive SITNegative Values Denote Savings Conferred by SIT versus Non-SIT Hankin et al, Session #274 March 19, 2011 Presented at the 2011 AAAAI 41

63. SIT Duration Only 18.8% of adults completed a 3-year course of SIT Adults (N=1,265) Only 17.5% of children completed a 3-year course of SIT Children (N=2,886)

65. Agreed that SIT could mitigate the high costs and burden of asthma

66. Substantial barriers to access to treatment

67. Poor coordination of care

68. Primary care’s lack of awareness and low referral ratesCalled upon the specialty to “assume a leadership role in collaborating with primary care physicians to educate them regarding the benefits and risks of immunotherapy and appropriate referral of patients with allergic rhinitis.” Levin A, Eavy G, Burgoyne D, Bordeaux M, Hankin CS. Allergy Immunotherapy Working Group consensus statement. Drug Benefit and Trends2008;20:14-20.

69. Public and Private Payer “Push Back”: Fighting Back Presentations and letters to Oregon Medicaid’s medical director, Health Services Commission (Ariel K. Smits, MD MPH) spearheaded by David Coutin “At this point, additional literature on the effectiveness of treatments for allergic rhinitis would not be helpful.” “The Commission...would be interested in information regarding how treatment of allergic rhinitis impacts healthy life years, burden of suffering, impacts on vulnerable populations, need for medical care, and our other prioritization criteria.” I've spoken again w Director of Oregon HSC. The Commission accepts the findings of Hankin and Cox, but has a rather common issue with Federally Qualified Health Centers (FQHC) payment methodologies for allergy injections, as does Florida. FQHC, where most of medical assistance (MA) patients in OR receive care. They are under federal mandates to bill MA for Dr visits for all encounters with MA patients, thereby driving up overall costs to states to deliver IT Rx. 44

70. SIT as Preventive Care 2010 Patient Protection and Affordable Care Act (PPACA) Mission: to identify and reduce the incidence of preventable chronic illness and disability “Preventive Clinical Services” designation U.S. Preventive Services Task Force (USPSTF) supported by the U.S. Department of HHS AHRQ Based on rigorous, evidence-based methods to evaluate the expected net health benefit (benefit minus harm) associated with delivery of a specified service As of September 2010, all new insurance policies fully cover preventive care and screening services that receive a USPSTF grade of A or B No patient co-pays or deductibles can be applied to the cost for these services

71. SIT as Preventive Care: A/I Organization’s Response Specific Allergen Immunotherapy: A Model of Preventive Care for a Large Segment of the United States Population. Ira Finegold, MD, Linda Cox, MD, Cheryl Hankin, PhD: Final draft completed 2/27/2011 approved and submitted by AAAAI/ACAAI/JCAAI

72. 47

73. Past Initiatives, Current Efforts, and Future Directions 48

74. Past Initiatives, Current Efforts, and Future Directions 49

75. Future Directions: The IMprovedAccess to AllerGen-Specific ImmuNothErapy (IMAGINE) Studies 50

76. Allergen Immunotherapy Adherence Task Force Members Amy Bronstone, David Bernstein , Linda Cox, Cheryl Hankin, Dennis Ledford, Karen Murphy & Jim Peterson, Phase 1. Conduct Survey of AAAAI Members to Identify Practice-based Interventions to Improve Patient Adherence to SIT Review and summary of the literature on AIT adherence- Contact extract manufacturers to request they share data on AIT adherence: Collect information from VA/Armed services on AIT refills, adherence, etc Develop questionnaire for membership survey Database for first AIT adherence survey- possibly use the existing AAAAI/ACAAI Immunotherapy Safety Surveillance study data base More intensive survey of randomly selected practices and their patients: Identify when, where and why patient prematurely discontinue ATT Identify Patient-Reported Factors that Influence Adherence to AIT Identify practice interventions used to improve patient adherence Phase 2. Test Interventions Expected to Improve Patient Adherence to AIT Phase 3 Develop Report with In-Depth Description of Interventions that Most Effectively and Efficiently Improve Patient Adherence to AIT 51

77. ALL Medicaid-enrolled patients July 1997- June 2009 (N= 7,524,231 ) Patients diagnosed with AR (477.x) in childhood: AR-Diagnosed patients < 18 years at 1st AR claim (“index AR diagnosis”) (N= 330,993 ) Sufficient data to conduct follow up analyses: > 1 year of claims data following index AR diagnosis (N=181,933 ) Sufficient data to examine presence of premorbid asthma: > 1 year of claims data prior to index AR diagnosis (N=234,451 ) Pediatric IMAGINE AIRE Study No premorbid asthma: Ptswho had no asthma diagnosis (493.x) > 1 year prior to their index AR diagnosis (N= 117,273 ) No concomitant asthma: Pts who had no asthma diagnosis (493.x) within 1 year (365 days) after their index AR diagnosis (N=102,895) ) No premorbid confounding dx :Ptswho had no “‡‡” > 1 year prior to their index AR diagnosis (N= 114,818 ) No Previous IT: Patients who received no IT> 1 year prior to their index AR diagnosis (N= 102,358 ) B. Remaining pool of patients with AR diagnosed in childhood who had no premorbid or concomitant asthma or counfounding diagnoses, never received IT, and did not receive their 1st asthma diagnosis during pregnancy (N= 100,282 ) 1st De novo IT in childhood: Patients < 18 years at 1st IT (N= 1,960 ) Active Tx in childhood: Patients < 18 years at 2nd IT (N=1,755 ) Had <3 years follow-up data after 2nd IT administration (N=774 ) Had >3 years follow-up data after 2nd IT administration (N=981 ) A. Remaining pool of patients with AR diagnosed in childhood who had no premorbid or concomitant asthma or counfounding diagnoses, received de novo active IT in childhood, and did not receive their 1st asthma diagnosis during pregnancy (N= 981 )

78. Allergy-related Illness AR versus noAR Children P<0.0001 between AR vs noAR Adults P<0.0001 between AR vs noAR From Florida Medicaid 1997-2008 adult and pediatric database not published

79. 54 Allergy-related Illness AR versus no AR in Adults: Asthma, Atopic Dermatitis, Conjunctivitis, Acute Respiratory Infections From Florida Medicaid 1997-2008 adult and pediatric database not published

80. 55 Allergy-related Illness AR versus noAR in Adults: Acute Respiratory Infections

81. 56 Allergy-related Illness AR versus noAR in Adults: Other diseases of the upper respiratory tract From Florida Medicaid 1997-2008 adult and pediatric database not published

82. 57 Allergy-related Illness AR versus noAR in Adults: Asthma, Atopic Dermatitis, Conjunctivitis, Acute Respiratory Infections From Florida Medicaid 1997-2008 adult and pediatric database not published

83. Conclusions AIT is effective and cost-effective but underutilized Reasons for underutilization are likely multi-factorial with patient factors being significant but payers may begin to restrict access Much more needs to be done to identify, understand, collaborate, learn from, and educate stakeholders and decision-makers Identify constituents Understand gaps that will compellingly support intended value propositions for each constituent Collaborate so that outcomes of efforts are meaningful The role of SIT as “preventive care” may be key Poor adherence (even in the face of extraordinary efficacy) always = failure Several A/I organization sponsored efforts focused on enhancing adherence, and evaluating preventive and cost-efficacy of AIT 58

84. 59 FPL's Riviera Beach plant demolition expected to bring brief traffic stoppage