Personalised (or precision) medicine is already a reality for some cancer patients, and is moving closer for those suffering other major diseases. The leap made by researchers in understanding how our genes affect our health promises new and better drugs. However, the developments in genomics, biomarkers, diagnostics and imaging technology are disrupting conventional healthcare models and pose complex challenges for the regulatory bodies and healthcare payers.
According to Research and Markets’ report on the US Companion Diagnostics Market,1 there were at least 387 targeted medicines either in the pipeline or currently marketed for oncology in 2013. Technavio’s analysts, meanwhile, forecast that the global companion diagnostics market will grow at a compound annual growth rate (CAGR) of 18.59% over the period 2013–2018.2 Another report – Biomarkers: Technologies and Global Markets3 – predicts that the global biomarkers market will grow from US$29.3bn in 2013 to $53.6bn in 2018, at a CAGR of 12.8%.
While the figures sound promising, the reality is less clear cut and the difficulty for Big Pharma is knowing where, in this fast changing arena, to invest and maximise its efforts to recoup the greatest value. Furthermore, the world of targeted medicine that is emerging will produce a future healthcare landscape that is very different from that of today.
The difficulty for Big Pharma is knowing where to invest and maximise its efforts to recoup the greatest value
For Big Pharma there are currently major challenges in building a business model around precision drugs, aptly highlighted by Edward Abrahams, President of the Personalised Medicine Coalition (PMC) at the 10th Annual State of Personalised Medicine Luncheon hosted recently by the PMC. ‘As our understanding of individual variation continues to develop, personalised medicine products must overcome three challenges before patients can benefit,’ he said. ‘In the US, they must pass regulatory muster at either CMS or FDA, be covered and paid for, and be adopted by practising clinicians.’
But the US and other regulatory authorities have a lot of work to do in creating the right regulatory framework. One particular area where the FDA has been accused of having a lack of a clear regulatory strategy is that of genomic testing, where currently there are very few controls and standards regulating how tests are developed and offered.
McKinsey and Co in its report, Personalised Medicine – The Path Forward4 states that next gene sequencing (NGS) adoption will be slowed by concerns around quality of testing.
Reimbursement models vary
But the major challenge by far is the fact that old models of drug therapy reimbursement go out of the window with personalised medicine, which requires the applications of specific biomarkers, diagnostics and drugs. Previous healthcare models that have been organ, system or disease-oriented are no longer suited to personalised medicines, which focus on the biological pathways and control of the switches between healthy and diseased conditions.
At this stage, however, the national healthcare institutions cannot agree on reimbursement policies. Many countries are not yet set up to assess jointly both the medicine and its companion diagnostic and currently still consider drugs and diagnostics through separate evaluation and payment processes. This can lead to successful reimbursement of the drug but not its companion diagnostic and vice-versa.
The picture in the EU is particularly complex. Germany, for example, has separate submission and review processes for medicines and their companion diagnostics, while France is gradually synchronising treatment and diagnostic evaluation. Beyond Europe, we see Australia developing its own national framework for reviewing ‘co-dependent’ technologies and recommending national coverage or reimbursement decisions.
The FDA has been accused of having a lack of a clear regulatory strategy on genomic testing
Key to deciding all reimbursement schemes will be direct or linked clinical evidence for the treatment, and diagnostic, as well as economic evidence to see the cost-effectiveness case for a new targeted medicine and its companion diagnostic compared with other treatment or diagnostic alternatives. Providing the necessary data will be a challenge for companies. Furthermore, the McKinsey report predicts: ‘Unless the model for reimbursement of diagnostic tests changes drastically, diagnostic companies will only capture a fraction of the value created through advanced personalised diagnostics.’
Multinational companies providing complete diagnostic service packages to both public and private sector clinics and hospitals are becoming a common trend
Making matters even more complex is the degree of collaboration required in developing and marketing the drug and diagnostics. Frost & Sullivan (F&S), in its Emerging Technologies in Infectious Diseases Diagnostics report,5 states that diagnostic technologies are coming onto the market from a vast array of sources and disciplines. ‘To build diagnostic tests with a robust detection system also requires predictive markers to be identified and validated. Such a process demands multidisciplinary research groups ranging from life scientists for biomarkers discovery to physicists and engineers for instrument design.’
In this regard, new business models associated with commercial health management are emerging, says the report, and partnerships and alliance models seem to be the best way forward. F&S research analyst Cecilia Van Cauwenberghes says: ‘Multinational companies providing complete diagnostic service packages to both public and private sector clinics and hospitals are becoming a common trend.’
Telling the whole story
While drugs may now be approved for the sub-sets of patients most likely to respond to them, as with all new technology, advancement often has unseen consequences. The more we know about genetic traits, the more complex the general picture becomes of who to treat and the more research into who not to treat may be required.
As with all new technology, advancement often has unseen consequences
For example, in the Plavix law suit filed by Hawaii Attorney General David Louie against Sanofi-Aventis and Bristol-Myers Squibb, the manufacturers of the blockbuster antiplatelet drug, the argument hangs on the alleged non-disclosure of information related to how certain genetic traits reportedly alter effectiveness of the drug and potentially lead to complications, such as gastrointestinal bleeding. For while Plavix works better than aspirin for some, it has been reported, says the State of Hawaii, that 38–79% of Pacific-Islanders and 40–50% of East Asians may respond poorly to Plavix due to a genetic predisposition to metabolise the drug poorly. The result of the court’s judgement could affect how much further study of subpopulations drug developers will need to carry out for new treatments, potentially raising costs and lead times.
While there will be silver bullets in personalised medicine, we are in danger of missing much of its potential because a large part of it is about prevention, and it is more difficult for payers to grasp the cost-savings when looking at intangibles such as avoiding bad health. The profit behind personalised medicine is therefore going to be much harder to nail.
References
1. US Companion Diagnostics Market Trends and Insights; www.researchandmarkets.com/research/f9cdnc/us_companion
2. Global Companion Diagnostics Market 2014–2018; www.technavio.com/report/global-companion-diagnostics-market-2014–2018
3. Biomarkers: Technologies and Global Markets; www.reportlinker.com/p0488647/Biomarkers-Technologies-and-Global-Markets.html
4. McKinsey & Co Personalised Medicine - The Path Forward; www.mckinsey.com/client_service/pharmaceuticals_and_medical_ products/latest_thinking
5. Emerging Technologies in Infectious Diseases Diagnostics www.technicalinsights.frost.com