Making the Case for Personalized Medicine

[Editor's Note: This article first appeared November 28, 2011, on the Personalized Medicine Bulletin. Permission to republish has been granted by Foley and Lardner.]

The Personalized Medicine Coalition recently published the third edition of its state of the industry report, The Case for Personalized Medicine (“Report”). While the Coalition acknowledges greater adoption of the principles of personalized medicine by the health care industry and the public; technical, legal, regulatory and payor issues are highlighted for improvement to recognize the industry’s full potential and benefits. This post summarizes the Coalition’s view of the state of the industry and the issues identified as critical to the ongoing development and adoption of personalized medicine.

Building a Track Record

Personalized medicine is here and now, with over 72 products on the market or in development. The paradigm of personalized medicine – segmenting the population into groups of individuals and linking those individuals to a particular therapy – is reported to be changing the dynamics of drug development and the practice of medicine and creating new business and economic models for health care. In sum, the science and technology of personalized medicine is reported to provide:
•    a shift to a preventive from a reactive model of health care;
•    a reduction in trial-and-error by pre-selecting the best therapy for each individual patient;
•    an increase drug safety by reducing adverse events;
•    an increase patient adherence to treatment;
•    an improvement in the quality of life;
•    a revival of drugs that have previously failed; and
•    a reduction in the cost of health care.

Enhancing Technology – the Need for the $1,000 Genome

The sequencing of the human genome took $3 billion and 13 years to complete and since that time advances in sequencing technology promises to reduce the cost of sequencing an entire human genome to $1,000 or less. This price point is reported to be a critical benchmark because it is comparable to costs of existing medical tests and procedures and therefore, could begin to attract a consumer market of patients. In addition to expanding the universe of potential consumers, a low cost genome would provide much needed additional data for further research and product development.

Regulatory Policy – More Certainty and Predictability is Needed

The Coalition’s Report points to the need to regulate diagnostic tests to the end of ensuring public safety. The FDA recently issued guidance documents for the regulation of diagnostic tests which is a much needed step to regulatory predictability. These tests typically fall into two categories – diagnostic kits and laboratory-developed tests (“LDTs”). Diagnostic kits have all the reagents and materials necessary to run the tests and are regulated by the FDA as medical devices. However, most diagnostic tests are LTDs, which require more extensive sample and reagent preparation than LDTs. The Centers for Medicare and Medicaid services (“CMS”) and FDA claim jurisdiction over LDTs. In practice the FDA has not exercised jurisdiction over LDTs leaving the laboratories that perform the tests to be regulated by CMS’s authority under the Clinical Laboratory Improvement Amendment (CLIA) rules.

The Report also highlights some of the FDA’s initiatives to provide safe and effective products. For pharmaceuticals for example, the FDA’s Voluntary Exploratory Data Submission program enables companies to work together and exchange information before issuing regulatory standards. The program also allows for the consideration of molecular and genetic information during the development of a pharmaceutical.

Companion diagnostics also are reported to be in need of a clear regulatory path. To that end, the Report commends the FDA’s recent Draft Guidance for In Vitro Companion Diagnostic Devices, wherein the FDA clarified its intention to conduct simultaneous reviews of a drug and its corresponding companion diagnostic.

Finally, the Report also commends the FDA’s creation of the Director for Personalized Medicine in the Office of In Vitro Diagnostic Evaluation and Safety, as well as its partnership with Medco to mine data on prescriptions, genetic tests and clinical outcomes.

Insurance and Payment

Enhanced insurance coverage for diagnostic tests is needed to facilitate wide-spread adoption of the technology. However, the Coalition’s Report notes that before this can occur, insurance providers require more rigorous assessment of their cost-effectiveness and impact on health outcomes. This information is difficult to collect and analyze without wide spread adoption of the technology.

Pharmacy benefit managers (“PBMs”) have access to information that the Coalition argues can provide the information to establish clinical utility and cost effectiveness and therefore support insurance coverage. PBMs are responsible for processing and paying prescription drug claims, developing formulations and managing drug benefits for more than 210 million Americans. They also have access to data on patient outcomes and the use of drugs and diagnosis which can validate the benefits and cost-effectiveness of personalized medicine.