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Proposal to the State of Illinois Diabetes Commission

             An investment in health through the Diabetes Risk Assessment (DRA) Test Kit



Synopsis

Introduction of the Diabetes Risk Assessment (DRA) to State of Illinois residents at risk for type-2
diabetes based on the primary factors of:

       ethnicity                                                family history
       socio-economic level                                     medical history
       age                                                      sedentary lifestyle
    Distribute through various social and public touch points: schools, healthcare and dental clinics,
    health-related events, faith-based groups, etc.

    Success is contingent on a four-stage process:

           raising awareness of the existence, access and availability of DRA testing to State of
            Illinois residents.
           education on the features, benefits and value of DRA testing (namely identifying pre-
            diabetics).
           Diabetes screening utilizing the DRA kit.
           Completing a call to action (i.e. identification of a person with pre-diabetes or diabetes
            through the confirmatory DRA lab report and integrating a healthcare practitioner in
            order to review results and recommend a course of lifestyle changes.

    Distribution of DRA kits

    Suggested points-of-care for the DRA kit:

    School children: Implementing a state-wide Diabetes screening initiative based on a
    diabetes risk factor survey which will be administered if the student has two or more of
    the following: a) student belongs to an ethnicity b) family member with diabetes c) BMI
    calculation above normal levels.

    Ethnicities at risk: Diabetes screening drives offered following faith-based services. Goal
    to connect and cater to various populations and serve as a social and betterment
    network.



Glycemion Proposal to The State of Illinois Diabetes Commission                                        Page 1

                                            February 12, 2009
Residents over age 45: Incorporating the DRA within the Illinois Department on Aging as
part of Illinois Cares RX programme.

Lower socio-economic residents: offer the DRA at State of Illinois Medicaid clinics when
there is suspicion of diabetes based on classic signs, symptoms or inherent risks:
excessive thirst, excessive urination, elevated LDL cholesterol or high triglycerides, high
blood pressure).


Product History

The DRA Test Kit is unique in that it is the only commercially available product that combines
two FDA-Approved technologies in a single fingernick blood collection to determine glucose in a
fasting state as well as provide a retrospective look back at the previous 90 days of glucose
control using HbA1c. The concept of the DRA arose from the premise that for those who are
being screened for diabetes, a single determination of blood glucose at a single point on time
may fail to detect glucose intolerance in those who will have increased glucose in a non-fasting
state. While an administered oral glucose tolerance test would increase the likelihood of
identifying diabetes in such individuals, impracticality and cost prohibit such initiatives.

RediClinics of Richmond, Virginia completed a 30-day program in summer of 2008, whereby
school-age children presenting to RediClinics for back-to-school examinations could have free
diabetes screening using the DRA. Of the 246 children who were screened through this
program, 27% were shown to be at increased risk for diabetes, and 2 were ultimately confirmed
as having type 2 diabetes. The findings support the hypothesis that there are children who are
at risk for diabetes, whose parents who were not aware, and that an in-store clinic screening
program is a beneficial tool for all stakeholders.

Opportunity

Diabetes has become an epidemic in our society and is even regarded as a national security
threat. Having proven the utility of the DRA in retail, corporate wellness and the healthcare
sectors, the intent is to administer the DRA to those who are at the highest risk: ethnicities,
school children and an aging population.

The DRA is an accurate, cost-effective and easy to use (self-administered) way to identify pre-
diabetics. This FDA-Approved screening test combines an instant glucose self-test (results in
three minutes) with a confirmatory hemoglobin A1c laboratory test (if required). Both tests are
completed by using a sterile safety lancet to draw just a single drop of blood that is placed on a



Glycemion Proposal to The State of Illinois Diabetes Commission                                      Page 2

                                       February 12, 2009
specially treated collection card. The values used to determine pre-diabetics and diabetics are
in accordance to the American Diabetes criteria. Specifically, fasting glucose above 100 mg/dL
and less than 126 mg/dL indicates pre-diabetes, while fasting glucose levels above 126 mg/dL
indicates diabetes. Similarly, using the calculation for estimated average glucose (eAG), [eAG
(mg/dL) = 28.7 X HbA1c -46.7], an HbA1c greater than 6.0% and less than 6.5% would indicate
pre-diabetes, and an HbA1c above 6.5% would indicate diabetes. (J Clin Endocrinol Metab
2008;93:2447-2453).

The instant portion of the test gives a result which can rule out the disease. For those
participants whose instant result value does not exceed the cut-off threshold value, they are
deemed to be within the normal range and no further testing is required. Those participants
whose instant portion of the test exceeds the cut-off threshold value though will be asked to
send in the collection card whereby the confirmatory hemoglobin A1c value will be determined.

Results are communicated through an illustrative laboratory report, which provides numerical
results of the two tests with a corresponding easy to follow assessment of diabetes risk. By then
intervening with lifestyle modifications, such as dietary changes and exercise, the otherwise
certain progression to diabetes can be altered. An estimated 2 million Illinois residents have
pre-diabetes and are unaware of the risk. A significant portion of those people will develop
Type 2 diabetes within 10 years if not screened or treated.

Application to Illinois Diabetes Commission

Apply the DRA in a campaign for identifying cases of pre-diabetes in order to stress inexpensive
lifestyle changes versus costly treatment later on. Individuals identified with pre-diabetes who
receive intervention and commit to a healthy diet and regular exercise regimen may avoid the
onset of diabetes and its debilitating complications. It is through awareness, education,
detection and a committed call to action that this early intervention initiative will succeed in
reducing the costly, lifelong morbidities of diabetes for the residents of Illinois.

Benefits to Illinois Diabetes Commission
       Cost savings in treating diabetes and its related medical complications
       Savings in lost work hours for people with diabetes as well as the caregiver(s)
       Recognition as pioneers in implementing a statewide diabetes initiative to stabilize and
        reverse this trend of diabetes




Glycemion Proposal to The State of Illinois Diabetes Commission                                     Page 3

                                      February 12, 2009
Future costs of not identifying newly diagnosed pre-diabetics

Without diabetes screenings, present day undiagnosed pre-diabetics will develop type 2
diabetes and delay necessary medical attention. As a result, damage will occur to the
microvasculature and over time, can result in stroke, blindness, kidney failure and even death.
According to the American Diabetes Association, in 2007, each person with diagnosed diabetes
incurs an average expenditure of $11,744 per year in primary treatment. These expenditures do
not include advanced care such as ER visits, kidney dialysis and transplant, cardiovascular
treatments, eye care, amputations, etc. Indirect costs include increased absenteeism, reduced
productivity, unemployment from disease-related disability and less productive capacity due to
early mortality. Secondary and indirect costs of diabetes per individual per year exceed $75,000
– this represents more than 6 times the primary cost of disease management itself.



Statistical Support

According to the US Centers for Disease Control and Prevention, the average national rate of
diabetes growth is up 90% in the last decade. The annual direct and indirect costs of diabetes
exceed $132 billion nationally, and $7.5 billion in Illinois according to an IDPH 2004 report.
Combine the obesity epidemic, the aging population, with the current recessionary times and
the number of new cases of type 2 diabetes among our population is certain to escalate.



Investment

Under a state-wide screening initiative, the instant glucose test can be offered at a cost
of $8. From this instant test, healthy individuals will be identified and no further testing
on these individuals is needed. Contingent on the results of the instant test, if needed,
the Hba1c portion of the DRA will be offered for an additional cost of $12 (inclusive of
shipping, lab processing and reporting).

Assuming the availability of 1 million DRA screening kits to Illinois residents with the
expected positivity detection rate for pre-diabetes of ~ 20%, would mean that 200,000
pre-diabetics would be identified. Using the above data as it relates to Illinois, by
identifying and counseling 200,000 newly diagnosed pre-diabetics, a budgeted amount
of $10.4 million would save Illinois $2.3 billion per year in diabetes treatment alone, or
over $15 billion in direct and indirect costs. Sponsorship through alliances among the



Glycemion Proposal to The State of Illinois Diabetes Commission                                    Page 4

                                      February 12, 2009
pharmaceutical and healthcare industry for such an initiative would help to offset the
costs of promoting the program and providing the kits and testing.

Cost Comparisons

       The original research article Cost-Effectiveness of Screening for Pre-Diabetes Among
        Overweight and Obese U.S. Adults (Diabetes Care30:2874-2879, 2007) concluded that
        screening for pre-diabetes followed by lifestyle intervention has a relatively cost-
        effectiveness ratio. Of particular note is that the published cost per diagnostic test
        totaled $42.92

       The 2009 Medicare Fee Schedule lists the reimbursement rates for the two parts of the
        DRA as follows:

CPT Code                        Test Name                         2009 Medicare Reimbursement

QW-82947                        Glucose, Blood (CLIA Waived)      $5.73

83036                           HbA1c/Glycosylated Hb             $14.14



The total reimbursement is $19.90 and in line with the cost per DRA kit.



Proposed timeline for roll-out of DRA programme

By November 2009 to coincide with Diabetes Awareness Month



Contact Information

+847.236.0943

Konstantine Haralampopoulos




Glycemion Proposal to The State of Illinois Diabetes Commission                                  Page 5

                                      February 12, 2009

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State Of Illinois Diabetes Commission Presentation

  • 1. Proposal to the State of Illinois Diabetes Commission An investment in health through the Diabetes Risk Assessment (DRA) Test Kit Synopsis Introduction of the Diabetes Risk Assessment (DRA) to State of Illinois residents at risk for type-2 diabetes based on the primary factors of:  ethnicity  family history  socio-economic level  medical history  age  sedentary lifestyle Distribute through various social and public touch points: schools, healthcare and dental clinics, health-related events, faith-based groups, etc. Success is contingent on a four-stage process:  raising awareness of the existence, access and availability of DRA testing to State of Illinois residents.  education on the features, benefits and value of DRA testing (namely identifying pre- diabetics).  Diabetes screening utilizing the DRA kit.  Completing a call to action (i.e. identification of a person with pre-diabetes or diabetes through the confirmatory DRA lab report and integrating a healthcare practitioner in order to review results and recommend a course of lifestyle changes. Distribution of DRA kits Suggested points-of-care for the DRA kit: School children: Implementing a state-wide Diabetes screening initiative based on a diabetes risk factor survey which will be administered if the student has two or more of the following: a) student belongs to an ethnicity b) family member with diabetes c) BMI calculation above normal levels. Ethnicities at risk: Diabetes screening drives offered following faith-based services. Goal to connect and cater to various populations and serve as a social and betterment network. Glycemion Proposal to The State of Illinois Diabetes Commission Page 1 February 12, 2009
  • 2. Residents over age 45: Incorporating the DRA within the Illinois Department on Aging as part of Illinois Cares RX programme. Lower socio-economic residents: offer the DRA at State of Illinois Medicaid clinics when there is suspicion of diabetes based on classic signs, symptoms or inherent risks: excessive thirst, excessive urination, elevated LDL cholesterol or high triglycerides, high blood pressure). Product History The DRA Test Kit is unique in that it is the only commercially available product that combines two FDA-Approved technologies in a single fingernick blood collection to determine glucose in a fasting state as well as provide a retrospective look back at the previous 90 days of glucose control using HbA1c. The concept of the DRA arose from the premise that for those who are being screened for diabetes, a single determination of blood glucose at a single point on time may fail to detect glucose intolerance in those who will have increased glucose in a non-fasting state. While an administered oral glucose tolerance test would increase the likelihood of identifying diabetes in such individuals, impracticality and cost prohibit such initiatives. RediClinics of Richmond, Virginia completed a 30-day program in summer of 2008, whereby school-age children presenting to RediClinics for back-to-school examinations could have free diabetes screening using the DRA. Of the 246 children who were screened through this program, 27% were shown to be at increased risk for diabetes, and 2 were ultimately confirmed as having type 2 diabetes. The findings support the hypothesis that there are children who are at risk for diabetes, whose parents who were not aware, and that an in-store clinic screening program is a beneficial tool for all stakeholders. Opportunity Diabetes has become an epidemic in our society and is even regarded as a national security threat. Having proven the utility of the DRA in retail, corporate wellness and the healthcare sectors, the intent is to administer the DRA to those who are at the highest risk: ethnicities, school children and an aging population. The DRA is an accurate, cost-effective and easy to use (self-administered) way to identify pre- diabetics. This FDA-Approved screening test combines an instant glucose self-test (results in three minutes) with a confirmatory hemoglobin A1c laboratory test (if required). Both tests are completed by using a sterile safety lancet to draw just a single drop of blood that is placed on a Glycemion Proposal to The State of Illinois Diabetes Commission Page 2 February 12, 2009
  • 3. specially treated collection card. The values used to determine pre-diabetics and diabetics are in accordance to the American Diabetes criteria. Specifically, fasting glucose above 100 mg/dL and less than 126 mg/dL indicates pre-diabetes, while fasting glucose levels above 126 mg/dL indicates diabetes. Similarly, using the calculation for estimated average glucose (eAG), [eAG (mg/dL) = 28.7 X HbA1c -46.7], an HbA1c greater than 6.0% and less than 6.5% would indicate pre-diabetes, and an HbA1c above 6.5% would indicate diabetes. (J Clin Endocrinol Metab 2008;93:2447-2453). The instant portion of the test gives a result which can rule out the disease. For those participants whose instant result value does not exceed the cut-off threshold value, they are deemed to be within the normal range and no further testing is required. Those participants whose instant portion of the test exceeds the cut-off threshold value though will be asked to send in the collection card whereby the confirmatory hemoglobin A1c value will be determined. Results are communicated through an illustrative laboratory report, which provides numerical results of the two tests with a corresponding easy to follow assessment of diabetes risk. By then intervening with lifestyle modifications, such as dietary changes and exercise, the otherwise certain progression to diabetes can be altered. An estimated 2 million Illinois residents have pre-diabetes and are unaware of the risk. A significant portion of those people will develop Type 2 diabetes within 10 years if not screened or treated. Application to Illinois Diabetes Commission Apply the DRA in a campaign for identifying cases of pre-diabetes in order to stress inexpensive lifestyle changes versus costly treatment later on. Individuals identified with pre-diabetes who receive intervention and commit to a healthy diet and regular exercise regimen may avoid the onset of diabetes and its debilitating complications. It is through awareness, education, detection and a committed call to action that this early intervention initiative will succeed in reducing the costly, lifelong morbidities of diabetes for the residents of Illinois. Benefits to Illinois Diabetes Commission  Cost savings in treating diabetes and its related medical complications  Savings in lost work hours for people with diabetes as well as the caregiver(s)  Recognition as pioneers in implementing a statewide diabetes initiative to stabilize and reverse this trend of diabetes Glycemion Proposal to The State of Illinois Diabetes Commission Page 3 February 12, 2009
  • 4. Future costs of not identifying newly diagnosed pre-diabetics Without diabetes screenings, present day undiagnosed pre-diabetics will develop type 2 diabetes and delay necessary medical attention. As a result, damage will occur to the microvasculature and over time, can result in stroke, blindness, kidney failure and even death. According to the American Diabetes Association, in 2007, each person with diagnosed diabetes incurs an average expenditure of $11,744 per year in primary treatment. These expenditures do not include advanced care such as ER visits, kidney dialysis and transplant, cardiovascular treatments, eye care, amputations, etc. Indirect costs include increased absenteeism, reduced productivity, unemployment from disease-related disability and less productive capacity due to early mortality. Secondary and indirect costs of diabetes per individual per year exceed $75,000 – this represents more than 6 times the primary cost of disease management itself. Statistical Support According to the US Centers for Disease Control and Prevention, the average national rate of diabetes growth is up 90% in the last decade. The annual direct and indirect costs of diabetes exceed $132 billion nationally, and $7.5 billion in Illinois according to an IDPH 2004 report. Combine the obesity epidemic, the aging population, with the current recessionary times and the number of new cases of type 2 diabetes among our population is certain to escalate. Investment Under a state-wide screening initiative, the instant glucose test can be offered at a cost of $8. From this instant test, healthy individuals will be identified and no further testing on these individuals is needed. Contingent on the results of the instant test, if needed, the Hba1c portion of the DRA will be offered for an additional cost of $12 (inclusive of shipping, lab processing and reporting). Assuming the availability of 1 million DRA screening kits to Illinois residents with the expected positivity detection rate for pre-diabetes of ~ 20%, would mean that 200,000 pre-diabetics would be identified. Using the above data as it relates to Illinois, by identifying and counseling 200,000 newly diagnosed pre-diabetics, a budgeted amount of $10.4 million would save Illinois $2.3 billion per year in diabetes treatment alone, or over $15 billion in direct and indirect costs. Sponsorship through alliances among the Glycemion Proposal to The State of Illinois Diabetes Commission Page 4 February 12, 2009
  • 5. pharmaceutical and healthcare industry for such an initiative would help to offset the costs of promoting the program and providing the kits and testing. Cost Comparisons  The original research article Cost-Effectiveness of Screening for Pre-Diabetes Among Overweight and Obese U.S. Adults (Diabetes Care30:2874-2879, 2007) concluded that screening for pre-diabetes followed by lifestyle intervention has a relatively cost- effectiveness ratio. Of particular note is that the published cost per diagnostic test totaled $42.92  The 2009 Medicare Fee Schedule lists the reimbursement rates for the two parts of the DRA as follows: CPT Code Test Name 2009 Medicare Reimbursement QW-82947 Glucose, Blood (CLIA Waived) $5.73 83036 HbA1c/Glycosylated Hb $14.14 The total reimbursement is $19.90 and in line with the cost per DRA kit. Proposed timeline for roll-out of DRA programme By November 2009 to coincide with Diabetes Awareness Month Contact Information +847.236.0943 Konstantine Haralampopoulos Glycemion Proposal to The State of Illinois Diabetes Commission Page 5 February 12, 2009