Rx and Dx pushed outside of model by personalized medicine
Alain Huriez threw away the crystal ball to provide a hard look at the realities of personalized medicine during a panel discussion he organized for BIO-Europe Spring® 2011 in Milan.
The lessons from recent deal activity in this fast emerging area of healthcare speak louder than predictions about the future for this trend that is now beginning to be felt within the industry.
The panel assembled for the session, “Breaking Ground in Personalized Medicine,” included not only diagnostic (Dx) and therapeutic (Rx) companies but also a disruptive new actor in the form of a pharmacy benefits manager (PBM).
The Senior Manager for External R&D with the Medco Research Institute, Gabriela Lavezzari, is from the leading PBM in the United States monitoring prescription activities of 65 million Americans.
If pharma execs chafe when Dx companies set terms for deals, Lavezzari outlined a framework that should have business development executives sweating bullets.
“The current diagnostic models use a big sales force to teach indications for an approved product, and rely on physicians remembering those indications,” she said.
“Outside of this model are the patients and the payers who get the bill for the prescriptions, but have no idea of what they are paying for nor why,” she said.
“We engage with the payers and realign the model,” she said, leveraging data available in a pharmacy system hardwired to exchange patient data to prevent and report adverse effects.
The physician, the patient and the payer move to the center of the Medco model while Rx and Dx are pushed outside.
“We link with physicians,” she said, “to help them create a teachable moment to inform both the doctor and the patient about the use of a test that will help guide therapy.”
Medco engages with Dx companies to identify the patients. The company closes the service loop by mailing the test to a patient, who swabs a bio sample and mails it back.
Patient compliance to testing and to prescribed medication is Medco’s driving issue.
“Our role is establishing clinical utility and cost effectiveness,” said Lavezzari. ”It may be an iPhone app, it may be anything that helps with compliance.”
Citing the example of Medco promotion of a genetic warfarin test, she said ordering of the test increased by 17% from 0.2% when the system relied upon physician ordering.
“We follow FDA instructions for a therapy, which physicians often do not do,” she said.
According to Harry Glorikian from Scientia Advisors, “Five years from now every company at this meeting is going to look different than it does today.
“Think of Kodak a few years before the digital age began, or newspapers,” he suggested. “We think we are different, but today pharma only cares about biomarkers and molecules, while the players driving personalized medicine only care about data on clinical utility and cost effectiveness. In other words, data that is not pharma’s data.”
Glorikian predicts that the market for CDx will grow to USD 1.03 billion by 2017 from what he estimates will be sales of USD 543 million in 2012.
The momentum shifted in the past 14 months, he showed, with more players coming online.
Critical for business development is understanding not just who they are, but how they make money.
“Their model is different from how pharma makes its money, and pharma’s model is no longer valid for this market,” he said.
To this point the majority of products fall in the CDx category, tightly linking the Dx to the Rx, but this is shifting, he said.
Increasingly Dx companies are tempted to go it alone with their assay, or to partner directly with a PBM like Medco.
Lavezzari heads the Medco division charged with managing the more than 200 Dx companies she said are knocking on her door.
“Medco has 65 million subscribers,” said Glorikian, “how many pharmas have that many patients?”
Increased regulation of Dx, on the other hand, may push these companies to a deal with pharma, he said.
Richard Watts is Director of Pharma Business Development at QIAGEN, which holds 15 CE marked CDx products and a portfolio of 60,000 biomarker candidates.
While agreeing that Dx development is complex and expensive, a partnership with pharma is not risk free as the Rx company on the companion test has a 50% chance of failing in its Phase III clinical trial.
“We often put forward risks and rewards terms that are difficult for pharma companies to look at,” he said. “We like master collaboration agreements based on service.”
A CDx partnership with QIAGEN includes a bespoke assay development with a fee for service, a fixed-price milestone, as well as insistence on sharing in the product development.
On the back end QIAGEN’s risks and rewards terms include royalties on Rx sales and sales performance milestones.
One option for the Rx partner is to put a test in place before the Rx, “to make a market with the Dx use ahead of the availability of the therapy,” said Watts.
Novartis Pharma believes so strongly in CDx it has acquired a CLIA lab.
Matthias Will, head of Marketing & Market Access for Molecular Diagnostics at Novartis reported that he has concluded three deals in the past 12 months focused on this strategic area with Cepheid, Invivoscribe and Genoptix.
“With Cepheid we are leveraging the genexpect platform, while Invivoscribe is a true CDx expected to launch in 2014, and Genoptix testing represents a business model we plan to extend,” he said.
To accelerate access for patients to personalized treatment and to optimize the healthcare spend with CDx, he said, two significant barriers need to be fixed: “the regulatory framework everywhere, and there is no reimbursement framework anywhere.”
Meanwhile, the pharma itself is not anywhere near ready for Dx, he said, “because it is a different distribution channel where the target is the end user.”
Watch the session here:
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