Win some, Lose Some

The case was settled out of court. In a separate lawsuit (Georgia, November 2002) a widower alleged that Lilly, Prozac's maker, failed to publicize research showing that some people are "poor metabolizers of Prozac," referring to patients with CYP2D6 gene defects. Medical and product liability threats will likely hasten PGx's use.

Competition. There are a plethora of pharmacogenomic players who see the field as a lucrative business opportunity. Many small companies, such as Affymetrix, Aureon Biosciences, Dako, and Decode Genetics, are developing and selling PGx tests, information, and supplies. Large diagnostic and laboratory testing companies, including Roche Diagnostics and Quest Diagnostics, are also involved in the field.

Stakeholders. Three key groups will significantly influence PGx's adoption rate: physicians, patients, and pharma companies. Physicians will be influenced most notably by patient safety, medical liability, regulations, and reimbursement, especially if they can be reimbursed for conducting or consulting on PGx tests. They will also have to be convinced of PGx's clinical validity and benefit, which suggests that most physicians may take a cautious and somewhat skeptical approach to the technology.

Although consumers and patients may have concerns about insurance and privacy issues, they are likely to support PGx tests that predetermine which drugs are helpful or harmful. That assessment is based on the assumption that consumers will not have to pay much out of their pocket for the tests. The prevailing view in the pharma industry is that most executives and marketers do not want PGx testing and will resist its adoption.

4. PGx=Death to Blockbusters The main reason for that resistance is the myth that pharmacogenomics will fragment and reduce products' market size and, ultimately, kill the blockbuster model. Reporter Geeta Anand summarized that view in a 2001 Wall Street Journal story: "The technique threatens to be so disruptive to the business of big pharmaceutical companies-it could limit the market for some of their blockbuster products-that many of them are resisting its widespread use."

But the reality is that pharmacogenomics has the potential to either reduce or increase market size, depending on a variety of factors specific to the individual product at a certain point in time. Imagine that drug X has market share Y before genetic testing is introduced. Then PGx testing comes into the marketplace. Product X is likely to lose the market share of patients identified to have adverse events (A), no efficacy (B), or low efficacy (C). Consequently, the market share of product X with pharmacogenomics becomes Y-(A+B+C). (See "Win Some, Lose Some.") That is the "glass is half empty" perception shared by many pharma executives and marketers.

However, PGx testing has several benefits, most of which have the potential to increase market share:

• Faster approvals with earlier market introductions (D): PGx testing early during R&D should identify drug targets and responsive patients more quickly.
• Recruitment of patients from less effective drugs (E): Patients who fail PGx testing for competing drugs could become new patients for product X.
• lIncreased use in diagnosed but untreated patients (F): Patients who have refused treatment because of safety or efficacy concerns would be more likely to try product X if a test confirmed that they would be a good candidate.
• Expansion of treatment to new subgroups/diseases (G): Understanding of the genomic basis of diseases helps researchers identify disease subgroups and new diseases that can be treated with the same drug.
• Preventive use (H): Patients who have been identified as susceptible to certain diseases may elect to take product X to slow the rate of disease progression.
• Enhanced patient compliance (I): Patients who know that the drug will work for them will be more likely to comply with the treatment. Moreover, if patients fail to respond appropriately, their doctors are more likely to know the problem is noncompliance.
• Potential for higher pricing/reimbursement (J): Governments and other payers may be willing to pay a premium for drugs that, with PGx tests, can identify the patients who will respond favorably. Or at least those products may have a formulary advantage over products without PGx testing support.

Thus, the net result of pharmacogenomics' effect on product X's market share could be an overall gain.