BIO 2012 – Could closer ties to payers help diagnostics? (Needs a tighter headline/lead JP)

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The approval of drugs such as Zelboraf and Xalkori, together with their companion diagnostics, has held out the promise that the long-awaited dawn of personalised medicine could be upon us. It is hoped (by whom? JP) that these advances in diagnostic testing will bring the benefits of better products and profits for the companies that make drugs and companion diagnostics, more effective treatment options for providers and payers, as well as reducing payers' spend on ineffective therapies.

The buy-in from companies about the payback from classification of patients into genetic groups has seen pharma companies buying diagnostic firms and the creation by AstraZeneca of a personalised healthcare and biomarkers division in an attempt to cement the idea of targeted drug discovery throughout its research and development activities. But a panel at this year’s BIO has called into question whether the widely extolled benefits of diagnostic testing and, therefore, personalised medicine are being translated into reality. (If this is the key point then it should lead the story JP)

Reality bites

“What has happened for the most part is that drug innovators face longer development times, can end up with smaller markets if they are not clever and now also face dual risk, because they can have the diagnostic fail as well as the product,” argued Mark Trusheim, visiting scientist and executive in residence at MIT University.

It is not just the increased risk and expense that can deter those working to provide diagnostic testing, but the lack of regulation around follow-on tests.

Those companies already heavily committed to diagnostics, such as Roche, can often spend millions developing a test for a drug only to have imitators come into the market purporting to offer the same test, without having to go through the same costly clinical trial and regulatory process.

Panel member James Creeden, chief medical officer for Roche Professional Diagnostics, drew on the example of Zelboraf, which in the US is approved with guidance that Roche’s companion diagnostics be exclusively used to determine patients with the BRAF mutation who would benefit. In Europe the drug is approved with calls for a validated test - but not specifically the one developed by Roche.

“On the day we filed our CE mark in Europe for the diagnostic, several other companies also filed for CE marks with their own BRAF tests, but with limited levels of data and evidence, a practice that is perfectly legal," said Mr Creeden.

“There needs to be more regulation in the testing space: we would not accept a cheap test for selecting blood for our blood supply; we should not accept a cheap test for use with our patients.”

Making testing pay

While these arguments are the ones that would be expected of an originator, this does highlight one of the issues within the diagnostic market. In the past innovation in diagnostics has been hampered by the low levels of reimbursement for diagnostic tests, which has deterred companies from investing in the field.

It had been hoped that the focus on companion diagnostics, developed in tandem with a drug, would get round the perception of diagnostics being low-value products, compensated on their manufacturing costs alone and drive innovation. (word(s) missing? JP)

But if genetic testing of mutations to select patients for drugs can be conducted by imitators with limited data packages, it undermines the years of R&D and spending that have gone into developing the test by the originator.

Mr Creeden also added that not using the test developed by the originator could also compromise patient safety, arguing that European studies had shown that 30% of KRAS tests, which identify poor responders to Erbitux and Vectibix, were wrong.

“What I would like to see is clarity from payers that they will only pay for regulatory approved tests. That kind of environment would lead to some quick and fundamental changes in the incentives system. Suddenly you would have real incentives for manufacturers to develop clinical evidence and submit it to regulatory authorities, and you would have transparency from a clinician and payer perspective as to which drugs work reliably.” (...or perhaps of this is the story then this needs moving up? The clash between the industry and payers (below) is also an interesting point. JP)

Cost conscious

But if the views of Bryan Dechairo, a senior director at the Medco Research Institute, one of the US’s biggest payers, are typical of the rest of the industry Mr Creeden could have a battle on his hands.

“For us as payers, what is important is the quality of the test, not the manufacturer of the test. We have found in certain cases other tests can be better than the manufacturer’s.”

It is this quest for reliable tests that has in recent years led Medco to partner with diagnostic companies, funnelling much of their testing through these collaborations.

While this is a model that works better with diagnostic tests independent of a specific drug, it is an approach that Mr Trusheim of MIT argued makes practical and economic sense.

If payers are the ones controlling the tests it should ensure not only that they are carried out - there is still low compliance with patients requiring blood test – but also that they are forced to be cost effective, with high standards of safety and security.

For manufacturers of diagnostics this tightening of the relationship with payers could lead to covered evidence (explain? JP), whereby as the effectiveness of tests is proved reimbursement grows accordingly. This would tackle the issue of lack of innovation due to poor returns, convincing developers to increase investment.

It is perhaps this approach, which neatly ties into the increasing focus on providing real-world evidence of the effectiveness of products, that could be one of many that could eventually make personalised medicine work for patients, clinicians, manufactures and payers.

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