Riding the Wave
Personalized medicine has always represented a bet on the future—but forces are now converging that suggest its benefits are within reach for patients, payers, and providers. There are substantial challenges as well, including creating the infrastructure needed for stakeholders to execute the defining objective of personalized medicine: to utilize an individual’s unique genomic information to optimize disease prevention and therapeutic strategies.
The potential of this new “upstream” platform to transform how medicine is practiced also raises significant strategic questions for the industry. One of the most critical is whether profits can be spun through a more niche-driven, service-oriented model rather than a commodity-purchase model geared to the premise that all patients are the same. This is an important decision point for companies as fewer new therapies carry the potential to emerge as “blockbusters,” with sales that can be leveraged over many years as maintenance therapies for large, undifferentiated populations.
Companies also have to consider changes in standard business practice, such as building R&D investments around not just drugs but complementary diagnostic tools that pinpoint the origins of disease and response to medication in specific subpopulations; linking P&R more closely to the early-stage drug development cycle; and embracing costly post-approval service delivery models that place medicines at the center of prevention, wellness, patient compliance and other broad public health interventions. Partnering better with patients and a variety of new community stakeholders is another imperative.
The Promise and the Profits
In fact, there are examples suggesting that personalized medicine is already here, at least in terms of the basic infrastructure. The science of molecular medicine is generating new knowledge about health and disease at an unprecedented rate, to the point that concern is growing that existing IT systems will not be able to cope with the overload of data.
The resulting insights into pharmacogenomics are opening new pathways to therapy beyond the traditional pharmaceutical blockbuster. Clinical trials are using genotyping to stratify patient selection and recruitment. Regulators are beginning to incorporate companion diagnostics in labeling for existing and future therapies. Other relevant trends include patient empowerment through open access and the sharing of health information on the Internet, as well as the search by governments for new ways to manage soaring health expenditures.
Taken together, these trends suggest that the future for innovative brand medicine looks very different than it did only five years ago. Biomarkers, in particular, will become essential to selling access to a new drug therapy among payers, while promotion will be dependent on a much narrower hierarchy of influential stakeholders. And while much of the hype has settled, there are still expectations of rapid market growth. A report by Pricewaterhouse-Coopers projects that revenues from the core personalized medicines market—covering pharmaceuticals, medical devices, and diagnostics—will grow from $24 billion at present to $42 billion by 2015.
Screening for Clinical Value
Many high-cost therapies are being tied to molecular diagnostics. For example, Dako’s HercepTest is frequently given to determine if Genentech’s Herceptin should be used to treat breast cancer. Genomic Health’s Oncotype DX breast cancer assay examines a breast cancer patient’s tumor tissue at a molecular level and scores the likelihood of recurrence based on a 21-gene assay. This information can help individualize breast cancer treatment planning, and potentially avoid aggressive chemotherapy in patients with low recurrence scores. The National Comprehensive Cancer Center Network (NCCN) has incorporated the Oncotype DX test results into the guidelines for breast cancer adjuvant chemotherapy. XDx’s AlloMap, another of these new tests, is a noninvasive gene expression test that identifies patients most likely to reject a heart transplant and helps clinicians determine immunosuppressive therapy. It has become an integral part of routine clinical practice at many medical schools, including Baylor, Hahnemann, and Columbia.
Molecular diagnostics and genotyping also are being used to salvage old drugs. An example is Gencaro (bucindolol hydrochloride), a fourth-generation beta blocker that was recently fast-tracked by FDA. It has the potential to be the first genetically targeted treatment for heart failure. ARCA biopharma, the drug manufacturer that pioneers genetically targeted cardiovascular therapies, believes it can predict patients’ response to Gencaro based on genetic markers. The company will soon launch a clinical study in 3,000 patients with chronic heart failure who have the genotype for a favorable response to Gencaro. The composite end point of the study is reduced hospitalization and mortality in those patients compared with metoprolol.
Most important, new diagnostic research discoveries will have a major impact on treatment of diseases like multiple sclerosis (MS) and Hodgkin’s lymphoma. For example, researchers have developed a genotype test that predicts whether patients with MS will respond to beta interferon drugs like Avonex (Biogen Idec), Rebif (EMD Serono and Pfizer), and Betaseron (Bayer). These discoveries could have a substantial impact on this $6 billion market.
Another test will soon launch that stratifies Hodgkin’s lymphoma patients’ response to therapy based on genomic biomarkers. Many patients are being overtreated, and nearly 1 in 5 will not respond to current therapy with radiation and chemotherapy. A simple blood test will soon identify biomarkers that help stratify which patients are at risk for a poor prognosis, sparing them aggressive treatment, and identify the 80 percent to 85 percent who may respond well to chemotherapy alone.
Reliance on this kind of value-based approach to providing access to diagnostics increases the revenues of diagnostic companies; in some areas, it may impact the healthcare dollars available for Big Pharma’s drugs. Overall, however, growth in this complementary segment should help advance the quality of clinical practice through greater efficacy, fewer side effects, better tolerability, and improved compliance. Although the number of units sold may fall in response, companies may be able to justify higher prices by delivering a superior clinical outcome to payers.
How Soon Standard Practice?
El Camino Hospital in Silicon Valley is the first community hospital to incorporate genomics into standard practice. They recently opened the Genomic Medicine Institute, offering patients personalized medicine in virtually every therapeutic category. Cardiology patients, for example, will be genetically screened to predict their risk for high cholesterol, early heart attack, and cardiomyopathy. Genetic tests also will be used to screen patients prior to prescribing statins, Plavix, and warfarin. Psychiatric patients will be tested for antidepressant and antipsychotic drug response by screening for CYP2D6 or CYP2C19 enzyme metabolism.
These and other high-profile examples are being tracked by both the private and public sectors. If it can be shown that the investments in proactive testing and targeted therapy yield better outcomes at manageable cost, then the trickle is likely to become a flood, particularly as incentives embedded in the new US health reform legislation kick in.
Big Pharma’s Playbook
GlaxoSmithKline and Abbott are partnering to develop companion diagnostics to select patients for a skin cancer drug clinical trial, while Abbott and Pfizer are developing companion diagnostics for a non–small-cell lung cancer drug currently in development by Pfizer. Also emerging are independent molecular diagnostic companies that are partnering with pharma. AstraZeneca and Dako are developing companion diagnostics for multiple oncology drugs. Pfizer and Qiagen are developing companion diagnostics for a Phase II brain cancer drug. And Novartis has formed an in-house molecular diagnostics unit to reduce the friction formed by these alliances and to codevelop diagnostics and therapeutics from their inception.
Consumers Driving Change
Launched as direct-to-consumer vehicles, these Web sites have allowed interested individuals who wish to pay a few hundred dollars out-of-pocket to learn about their risk for a variety of diseases before symptoms appear. The consumer orders a DNA kit, deposits a saliva sample, and receives a scan of the specific genes that may put them at high risk for up to 60 different conditions or diseases, as well as their ability to respond to certain drugs.
While the sites have increased consumer awareness of genomics, their initial incarnations were not financial home runs. However, they have expanded the range of information capabilities in test interpretation and genetic counseling. This in turn has come to the attention of payers, who are now more interested in “consumer genomics” as a tool for utilization review, test evaluation, and reimbursement. Procter & Gamble (P&G) has purchased a stake in Navigenics; and DNA Direct was acquired early this year by Medco, the giant pharmacy benefit manager (PBM). Already a pioneer in incorporating pharmacogenomics in its PBM offerings, Medco now plans to expand into education and utilization review. This will include a consulting service to help its members identify what genetic tests should be covered as a way to manage the drug bill.
Genetic Test Kit Controversy
In an interesting development, Pathway Genomics has temporarily halted the launch, after FDA said it may require regulatory clearance on grounds that the tests are making a health claim. FDA is grappling with the issue of how to regulate consumer genetic-testing kits, so the move to market the tests may accelerate a ruling that is needed to define future commercial opportunities in this space.
Trending With the “Foodies”
L’Oréal, the parent company of Lancôme, has introduced another anti-aging product called Genifique. It coined the phrase “youth activator” as a new skin category, promoting it with the promise: “Youth is in your genes. Reactivate it.” Created in collaboration with Quebec’s University of Laval hospital center, Genifique is based on 4,400 gene analyses and targets 3 key genes and 2 proteins. First-year global sales have reached $100 million.
Finally, Nestlé is positioning itself as the world’s leading marketer of “personalized” nutrition. The company is investing in the nascent fields of metabolomics and proteomics with the aim of providing foods, diets, devices, and even services for particular subgroups of the population. Nestlé forecasts that by 2017, global sales of nutrition for “specific need states” could reach $100 billion.
PBMs Move In
Pharma companies may not find the PBM interest in genetic testing to be good news. For example, Medco’s “Genetics for Generics” program has an objective to “maximize the generic (or soon to be generic) market in the face of market erosion due to imminent new drug approval.” It demonstrates that the widespread view that personalized medicine is all about promoting take-up of the latest innovations is not entirely correct—there is a story yet to be told here.
The Personalized Medicine Coalition (PMC), a group that addresses policy, business, technology, and other issues critical to the advancement of personalized medicine, endorsed the reform bill as a victory for patients and personalized medicine. It noted that the measure contains a number of pilot projects that promise to restructure reimbursement and delivery practices to incentivize targeted therapies, and to reward prevention and wellness schemes in key areas like primary care. “With the passage of this watershed bill, policymakers can now turn their attention to the issues surrounding medical innovation, improved patient care, and reduced systemic costs,” said Edward Abrahams, president of the Personalized Medicine Coalition. “Personalized medicine and targeted therapeutics will help us get there.”
The bill also includes provisions to administer more than a billion dollars in economic stimulus funds to promote clinical comparative effectiveness research (CER) on drugs and other new technologies. Although the Coalition accepts CER in principle, some advocates argue that enhancement of resources around a CER agenda will thwart the application of personalized medicine by promoting broad, population-based standards of evidence.
A New Business Model
1. How valid are test results?
2. How can patient confidentiality be ensured?
3. How much regulatory oversight is appropriate?
4. How can the physician education gap be bridged?
5. Who owns a person’s DNA?
Physician Response Lags
Medco and the American Medical Association [AMA] conducted a survey last year among 350,000 physicians in many different specialties. Of the 10,000 who responded, 98 percent believed that genetics will affect a patient’s drug response. Unfortunately, only 23 percent said that they had any prior education in pharmacogenomics, and only 10 percent felt informed about pharmacogenomic testing. A mere 12 percent had ordered a molecular diagnostic test in the past six months, and 57 percent said they did not have enough knowledge to order such tests.
One can see the looming disconnect between patient desires for such tests and the ability of physicians to respond: a survey by Cogent Research reported that over 90 percent of consumers want information about their risk for certain diseases and would like to know of at least one genetic disease risk. While payers and PBMs are trying to sort out what works, pharma has an opportunity to seize the initiative in educating physicians and communicating how to integrate personalized medicine into clinical practice.
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