United States: Personalized Medicine Today: PMC Issues Fourth State Of The Industry Report

Personalized medicine is changing the paradigm of the research, development and delivery of health care. The Personalized Medicine Coalition (PMC), a consortium of interested stakeholders that seeks to promote the understanding and adoption of personalized medicine concepts, services and products, is a key driving force to removing roadblocks to the adoption of personalized medicine. Consistent with this mission, the PMC issues periodic reports on the state of the industry. Recently, the fourth edition of its industry report, titled "The Case for Personalized Medicine" (Report) was released. In this Report, the PMC noted significant progress in sectors such as technology, regulatory and reimbursement or payer issues that are moving this industry forward. This post will review some of the highlights of the PMC's latest Report.

Technology-Driven Health Care

Personalized medicine is the benefactor of the convergence of advances in medical technology, computational biology and pharmaceutical science. It was just a little over six decades ago that Watson and Crick discovered the structure of DNA, and just over a decade ago that whole genome sequencing was estimated to cost between $100-$300 million per patient. In January 2014, Illumina announced new technology that can sequence the whole human genome for just $1,000. However, as noted by the PMC, the $1,000 cost does not include analysis and annotation of the raw data and accordingly, innovation and progress is needed to capitalize on the reduced cost and speed of whole genome sequencing. Nevertheless, the $1,000 price point is considered transformative:

"This price point is considered a critical benchmark because it is comparable to costs of existing medical tests and procedures, and could begin to attract a 'consumer' market of patients (though the $1,000 price does not reflect the cost of interpreting genomic data). Costs have already fallen to the point that full genomic sequencing has been employed in an increasing number of cases to resolve difficult diagnoses, with insurers determining that the approach was cost-effective enough to be reimbursed."

Report at page 19 (footnotes omitted).

An area for future research includes epigenetic changes (a genomic change that can alter the chemistry and structure of DNA without altering its sequence, through modification such as adding single-carbon methyl groups to the DNA chain) and correlating these to health. The Report notes that this is an area of intense study. For example, the NIH has set up a consortium to study this additional genetic information.

In addition, the Report highlights efforts by the National Cancer Institute (NCI) to standardize existing proteomic technologies such as mass spectrometry to identify protein biomarkers for use in identifying and treating diseases in their earliest stages.

Regulatory Policy is Moving in the Right Direction

With every new technology that impacts the health and safety of patients, issues regarding the appropriate level of regulatory oversight are important as well. Personalized medicine depends on accurate diagnostic tests to ensure that appropriate clinical intervention is administered.

The Report summarizes the U.S. Food and Drug Administration's (FDA) current thinking on the regulation of personalized medicine diagnostics, most of which are categorized as laboratory developed tests (LDTs) that historically have not been regulated by the FDA. According to the Report, although some landmark FDA approvals have been conferred upon LDTs used in personalized medicine, the vast majority of tests are not submitted to the FDA for review. Due to the sheer volume of these tests and the long-term outcomes associated with many of them, the FDA is taking a tiered regulatory approach. The FDA will more rigorously study and review tests linked to risker clinical decisions, while less risky tests will continue to be subject to the Clinical Laboratory Improvement Amendment (CLIA) rules, administered and implemented by the Centers for Medicare and Medicaid Services (CMS).

The regulatory pathway for companion diagnostic remains an area that requires regulatory definition and clarity as well. The Report notes that in 2011, the FDA released its "Draft Guidance for In Vitro Companion Diagnostic Devices" that signaled FDA's intention to conduct simultaneous reviews of a drug and its companion diagnostic. To the end of supporting the use of valid biomarkers to assist in guiding the clinical use of drugs, the FDA has begun publishing a table of genomic biomarkers that it considers valid for drug development.

Finally, the Report notes the FDA's renewed focus on personalized medicine with its creation of a new role of Director for Personalized Medicine in the Office of In Vitro Diagnostics and Radiologic Health.

Coverage and Payment Policy Reform is Needed

Clinical adoption of personalized medicine and consumer adoption of preventive health care based on individualized diagnosis requires supportive payer policies. The PMC Report states that because personalized medicine products and services are disruptive to traditional medical models, extra effort is required to overcome payment policies grounded in traditional approaches to coverage and reimbursement. Challenges noted by the PMC include cuts to Medicare payment for diagnostic tests, proposed cuts to Medicare reimbursement for tailored therapies, proposals for coverage and payment policy based on one-size-fits-all assessments, and expensive cost sharing for tailored therapies and diagnostics that guide treatment decisions.

Diving deeper into these issues, the PMC's Report indicates that under pressure to address rising health care costs, policy and payers are pursuing policies that can result in across-the-board reductions in coverage for diagnostics that in turn, disincentivize continued research and development in these technologies. Also, recent payment and reimbursement policy changes, for example a move by CMS to use "gapfill" methodology, which allow regional contractors to set prices for laboratory and molecular tests in combination with other payment decisions, "unfortunately caused a near complete cessation of federal payments for genomic tests in 2013." Report at page 27.

Compounding the challenges with fitting new technologies into traditional payment guidelines are proposed alternative payment models (APMs), pathway- or episode-based payments, that must be designed and implemented to support personalized medicine to further support its development and adoption. The PMC notes that modern diagnostic tests demonstrate that medicines that appear similar on average can have important clinical differences for individual patients and that broad, generic policies often ignore these differences. Thus, proposals that seek to contain costs by promoting the least expensive treatment rather than the best care for a particular patient, will ultimately discourage the development and adoption of molecular diagnostic tests and targeted therapies that might have higher up-front cost but reduce clinical costs over the long-term.

In concluding its review of payer challenges, the PMC issued a call to action for innovators and providers of personalized diagnostics to assist in removing payer challenges by noting that:

"Innovators are responsible for developing the collective evidence to justify the contention that personalized medicine can improve outcome while controlling costs. Except in the case of some individual products, to date they have not proven that contention. When they do, our arguments will be more compelling."

Report at page 29.

By The Numbers

Finally, the PMC Report includes a summary table listing selected personalized medicine drugs and relevant genes (as of May 2014) which highlights that, even with the challenges noted above, progress has been made. The Report identifies over 110 biomarkers linked to over 100 therapies for the treatment of a variety diseases such as cancer, cardiovascular disease, gastroenterological disorders, psychiatric illness, immune disorders and infectious disease. While challenges remain, the concerted effort of interested stakeholders will continue to advance the principles of personalized medicine.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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