Specifically, what we are confronting is a new "access hurdle" that comes right after the long process of market authorization is completed. It's best posed as a question: How can you build an effective, responsive price and reimbursement standard to establish that there is sufficient incentive for industry to develop the diagnostic tests that ensure the right patients will benefit from the best drug for their condition?
By and large, reimbursement of diagnostics is an opaque and passive process, in contrast to its pharmaceutical counterpart, where there is a relatively transparent pathway to a price agreement. The lack of such an approach for diagnostics leads to a lengthy process by which diagnostic and pharmaceutical companies are obliged to determine if a structure exists for reimbursement via a code-based system or coverage through hospitals or labs. In the latter case, there can be a high degree of budget variance across institutions. Hospitals and labs with insufficient funding are compelled to make tradeoffs on the number of patients that can be diagnosed appropriately. Rules also differ on stakeholder engagement in soliciting for diagnostic reimbursement. In some cases, the pharmaceutical industry is prohibited from involvement.Ultimately, the lack of clarity and systemic gaps lead to a lag in access, which has an impact on all key stakeholders. Patients receive suboptimal diagnoses and treatments given that physicians (oncologists, pathologists, etc.) lack metrics to showcase the best clinical option. Payers are using resources inefficiently as funds may be spent on treatments with lower response rates. One of the key criticisms of the oncology profession from payers is the "whatever sticks to the wall" ethos in determining the course of treatment, which, given the high cost of most cancer drugs, is simply an admission that there is waste in the system. Why not acknowledge that innovators of both the drug and diagnostic are not provided the appropriate incentives that should come with investment in the development of effective, targeted therapies?