Advanced BioHealing, Inc. Release: Health Economics Model Shows That Dermagraft® Combined With Conventional Care is a Cost-Effective Treatment for Diabetic Foot Ulcers in Medicare and Commercially Insured Populations

SAN DIEGO, June 24, 2011 /PRNewswire/ -- Advanced BioHealing, Inc. (ABH), a leader in commercializing living cell-therapies, a cornerstone technology in the field of regenerative medicine, today announced results from a health economics model developed by The Lewin Group (Falls Church, VA) that showed the addition of Dermagraft® to conventional care for the treatment of chronic diabetic foot ulcers (DFUs) resulted in a significant therapeutic and cost benefit compared to conventional care alone in both Medicare and commercially insured populations.

Results demonstrated that additional costs for Dermagraft were offset by medical savings from accelerated wound healing and reduced DFU complications and amputations. Significantly more DFUs were healed using Dermagraft plus conventional care compared to conventional care alone. The model also found that patients receiving Dermagraft were predicted to have fewer ulcer-related amputations and bone resections at 52 weeks than those receiving conventional care alone and that Dermagraft plus conventional care provided a significant reduction in the 52-week cost of care for patients with DFUs, as compared to conventional care alone.

"Diabetes and associated complications, like DFUs, place a significant economic burden on the U.S. healthcare system, with Medicare spending 32 percent of its total budget on beneficiaries with diabetes," said Dean Tozer, Senior Vice President of ABH. "The data provides an example of how advanced therapies, like Dermagraft, can be cost-effective for the Medicare system, and has the potential to change the entire discussion around how advanced therapies can be part of the solution to reducing future costs of Medicare."

Results from the model (abstract number: 0053-LB) will be presented at the American Diabetes Association 71st Scientific Sessions during the General Poster Session II on Sunday, June 26, 2011 from 12:00 to 2:00 p.m. PDT at the San Diego Convention Center in Hall B.

Model Results

In the model, the proportion of healed ulcers was 76% in the Dermagraft plus conventional care arm versus 50% in conventional care alone. Median time to heal was 19-20 weeks for patients receiving Dermagraft compared to 51-52 weeks for those receiving conventional care alone. Additionally, patients receiving Dermagraft had fewer infections and amputations.

The average expected cost to Medicare per treated patient over 52 weeks was $23,080 for patients receiving Dermagraft compared to $28,505 for those receiving conventional care alone. The average estimated cost per healed ulcer (i.e. costs associated with the treatment of the ulcers that completely healed) was $30,344 in the Dermagraft plus conventional care arm compared to $56,516 for conventional care alone. Cost neutrality for Dermagraft was achieved at 6 months for Medicare payers and 8 months for private insurers. When using commercial reimbursement rates, Dermagraft provided similar but smaller cost effective ratios. Cost results are given in 2009 U.S. dollars.

About the Model

A Markov model was created that incorporated both clinical data from a pivotal, randomized, controlled study and U.S. cost and resource data from Medicare and private insurers claims databases to provide a cost analysis from the payer's perspective. Weekly health state transition probabilities were derived retrospectively from results of a 12-week, randomized control trial (n=245) that compared the efficacy of Dermagraft plus conventional care in the treatment of DFUs to conventional care alone. Health states were verified by medical review and included healed, unhealed not infected, cellulitis, osteomyelitis and amputations. During weeks 1-8, Dermagraft could be used on a weekly basis for patients in the treatment group providing the ulcers were in an unhealed but not infected state. Amputee status was based on post-trial period patient follow-up for those who had adverse events. There were 6 (4.6%) ulcer-related amputations/resections among 130 patients in the Dermagraft plus conventional care arm, compared with 13 (11.3%) among 115 patients in the conventional care arm.

Diabetes is a chronic and disabling disease and the incidence is expected to grow significantly in the coming years due to an aging population and increasing trends towards obesity, unhealthy diets and sedentary lifestyles. The disease often leads to other health complications, such as heart disease, stroke and diabetic neuropathy, which can lead to DFUs. Of the chronic medical conditions that patients with diabetes are most likely to get, 15 to 25% will develop a DFU in their lifetime. Despite receiving good wound care, 70% of DFUs fail to heal within 20 weeks. The cost to treat a new DFU in the U.S. is estimated to be $51,531 in the first two years.

About Dermagraft

Dermagraft is a cryopreserved human fibroblast-derived dermal substitute; it is composed of fibroblasts, extracellular matrix, and a bioabsorbable scaffold. Dermagraft is manufactured from human fibroblast cells. During the manufacturing process, the human fibroblasts are seeded onto a bioabsorbable, polyglactin mesh scaffold. The fibroblasts proliferate to fill the interstices of this scaffold and secrete human dermal collagen, matrix proteins, growth factors, and cytokines to create a three-dimensional human dermal substitute containing metabolically active, living cells.

Dermagraft is indicated for use in the treatment of full-thickness DFUs greater than 6 weeks duration, which extend through the dermis, but without tendon, muscle, joint capsule, or bone exposure. Dermagraft should be used in conjunction with standard wound care regimens and in patients who have adequate blood supply to the involved foot. Clinical data from the pivotal study showed a 64% relative increase in wound closure for Dermagraft over active control in patients with diabetic foot ulcers of greater than 6 weeks duration and a similar incidence of reported adverse events for both treatment groups.

About Advanced BioHealing, Inc.

Advanced BioHealing (ABH) develops and commercializes living cell therapies, which promote the repair of damaged human tissue, enabling the body to heal itself. ABH, a privately-held company, participates in the rapidly growing diabetes market with its lead cell-based therapy, Dermagraft®. ABH currently manufactures and markets Dermagraft, a bio-engineered skin substitute that assists in restoring damaged tissue and supports the body's natural healing process. Dermagraft is FDA approved to treat DFUs and is the focus of an ongoing pivotal trial for the treatment of venous leg ulcers. The Company maintains its corporate office in Westport, Conn. with additional sites in La Jolla, Calif. and Nashville, Tenn. To learn more about ABH, please visit the Company's web site at www.ABH.com.

About The Lewin Group

The Lewin Group is a premier national health care and human services consulting firm with more than 40 years' experience finding answers and solving problems for leading organizations in the public, nonprofit, and private sectors. With its industry experience and knowledge, The Lewin Group provides its clients with high-quality products and insightful support to help them maximize the delivery of programs and services that make a difference in the lives of their constituents. For more information on The Lewin Group, visit www.lewin.com. The Lewin Group is a division of OptumInsight (formerly Ingenix), a part of Optum. OptumInsight is a leading provider of health information, technology and consulting services. Visit www.ingenix.com for more information. The Lewin Group operates with editorial independence and provides its clients with the very best expert and impartial health care and human services policy research and consulting services.

SOURCE Advanced BioHealing, Inc.