Personalized Medicine Education and Advocacy

Thought leadership in personalized medicine

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Beyond the Barriers: Deconstructing the Regulatory and Reimbursement Hurdles for Companion Diagnostics

Guest Blog
by Alessandra Cesano, M.D., Ph.D., Chief Medical Officer, NanoString Technologies


Alessandra Cesano, M.D., Ph.D.

On November 16, a group of diagnostic industry representatives will convene to discuss the regulatory and reimbursement hurdles for personalized medicine diagnostics during the 12th Annual Personalized Medicine Conference at Harvard Medical School. These kinds of discussions have never been more important.

The push for personalized medicine came to the national forefront in January when President Obama announced the National Cancer Moonshot. This bold initiative aims to accelerate the discovery of personalized treatments tailored to an individual’s genetic profile and/or the tumor’s biology. Companion diagnostics (CDx) play an important role in precision medicine, as they are designed to enrich care for patients who will benefit from a “companion” drug, by helping to characterize the disease’s biology and matching it with the mechanism of action of a specific drug.

Because many of the new drugs in the pipeline work on a specific genetic or biological target that is present in some, but not all, patients with a certain kind of cancer, there is a need for an accompanying test to determine if the drug will or will not have a benefit for a specific patient. These tests may also point to which patients are at immediate risk for harmful side effects.

The promise of companion diagnostics is not under debate, but there are regulatory and reimbursement hurdles that need to be overcome before these tests achieve widespread acceptance and deliver on the promise. First is the cost. The development of a companion diagnostic requires a significant investment, along the lines of tens of millions of dollars. However, presently, the value that companion diagnostics bring to the health care system, specifically in terms of improving patient outcomes and effectiveness of the care delivered, is not appropriately recognized by the reimbursement system.

Supporting the development of CDx tests will require significant investment up front, but once adopted they will help the health care system realize considerable cost and time savings. Currently, the health care system favors the “one-size-fits-all” approach to drug delivery, despite the fact that the subgroup of patients benefiting from treatment is on average only 20 – 30 percent. By using CDx, we can enrich the patient population for which a specific drug is effective, resulting in better outcomes and significantly reduced costs for the health care system. Designing and executing appropriate clinical trials to demonstrate the “clinical utility” and cost-effectiveness of selection biomarkers in each particular clinical setting will be an important part of the evidence needed to obtain test reimbursement.

Another obstacle involves how CDx and personalized medicine have impacted the regulatory landscape. While the regulatory path to a CDx is relatively well defined by regulatory guidelines, a gray area remains on when/how a  “generic” version of those tests (aka laboratory-developed tests or LDTs, which are analytically developed by a single laboratory without a clinical validation requirement) will be regulated by the FDA. This uncertainty has negatively affected the investor community’s appetite for diagnostic companies.

In light of these hurdles, a promising solution to driving CDx adoption is partnership among diagnostic manufacturers and the pharmaceutical industry. Biopharmaceutical companies are developing many therapies and as a result need to enroll patients in many hundreds of clinical trials. The clinical development of their drugs is going to demand enrichment strategies based on biomarkers. In fact, I can see a future in which it is the exception, rather than the rule, that drugs don’t have biomarkers when they come to market.

The biopharmaceutical industry is going to work with in vitro diagnostic companies that have the technology and the capabilities to both analyze the tumor’s biology and build an in vitro diagnostic product that can win clearance from the FDA. Ideally, these tests will be able to cut across whole drug classes (targets). Because of a limited supply of biotissue, the tests will need to be as holistic as possible. Thus, multi-plexed assays that allow for investigation of multiple aspects of biology in a single sample would be preferred.

Because of their unique ability to “match-make” a tumor’s biology with the right therapeutic choice, companion diagnostics are important for the efficient and effective treatment of patients. If the National Cancer Moonshot and other initiatives are going to be successful, there needs to be an alignment among all the stakeholders — including regulators, payers, pharmaceutical companies, physicians, patients and advocacy groups — recognizing the value of companion diagnostics in making “precision medicine” not just a promise but finally a reality.


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Think the Diagnostics Community Doesn’t Agree on Anything When It Comes to LDT Regulation? Think Again.

by Amy M. Miller, Ph.D., Executive Vice President, Personalized Medicine Coalition


Amy M. Miller, Ph.D.

As we enter a new round of discussions about laboratory-developed test (LDT) regulation, it is helpful to review where we’ve been. Many stakeholders have weighed in on the topic, and GenomeWeb’s comprehensive summary of the different proposals offers a useful comparison of them. At first glance, there appears to be little or no consensus. But listening to the community reveals more.

At the beginning of this year, I moderated a series of discussions on potential legislative solutions with representatives from the entire LDT community, including but not limited to those with an interest in personalized medicine. In short, the community agrees that a legislative solution to LDT regulation should take a risk-based approach and:

  1. Protect public health labs. Public health labs should be protected by any regulatory paradigm, which means that sentinel labs must be able to develop, deploy and use rapidly developed diagnostics to address critical public health needs.
  2. Allow flexibility and efficiency when managing modifications. As diagnostic device developers have long argued, the way modifications are managed by a regulatory system should be flexible and efficient to allow diagnostic tests to evolve with the clinical science that underpins them.
  3. Mitigate regulatory burdens for government and industry. To reduce regulatory burdens on government and industry, regulatory agencies should, when appropriate, recognize when certain safeguards are already in place. These mitigation strategies can help regulatory bodies keep pace with the rapidly evolving pace of personalized medicine diagnostic testing.
  4. Design a grandfathering system for tests already on the market. When FDA published its draft framework for regulating LDTs, we had no clear appreciation of the number of tests that might be captured by it. While we still do not have an exact count, tech firm NextGxDx estimates that there are nearly 70,000 personalized medicine diagnostics offered by about 300 labs with another eight to 10 coming to market each business day. To manage such an enormous workload, a regulatory agency must design a grandfathering system that will allow most tests to remain on the market unless there is a compelling reason to remove them.
  5. Ensure regulatory burdens reflect testing volumes. Regulatory burden must be reflective of testing volume.  For example, diagnostics designed for rare and un-met needs should be given careful and different consideration by any regulatory agency to ensure that tests are developed for micro-markets.
  6. Accept valid scientific evidence for regulatory purposes — even if that evidence does not include data from a randomized control trial. Personalized medicine has challenged how health care products and services are conceived, developed, regulated, covered, paid for and used by physicians.  Evidentiary requirements for regulatory review must also evolve. The community agrees that for diagnostics, valid scientific evidence should be acceptable for regulatory review, even when that evidence does not include data from randomized control trials.

Understanding these points and the logic behind them is essential to progress on this topic. Fortunately, we are not starting from scratch.

While there is no consensus about which regulatory agency should manage LDT regulation, the House Energy and Commerce Committee has released a draft legislative solution designed to address the community concerns outlined above. That proposal builds on a rich dialogue that began when the first genetic tests entered the market and continued in 2007 when Senators Ted Kennedy (D-MA) and Gordon Smith (R-OR) released a bi-partisan proposal for FDA to actively regulate lab tests. Soon after, then-Senator Obama and Senator Richard Burr (R-NC) released a draft legislative proposal that was not quite as burdensome. Finally, in 2010, Senator Hatch outlined a novel path at FDA for diagnostics, which opened up the conversation about the true difference between diagnostics and the medical devices that their regulatory structure mirrored.

These historical efforts stimulated conversation, and what was learned has influenced how we consider the topic. The Committee’s next draft will have been improved by stakeholder input, and we can expect the Senate to continue improving on the next draft.

Addressing this duel path to market and the difficulties inherent in such a regulatory paradigm is essential to the field.  Once this debate is settled, we can all concentrate on the biggest issue in personalized medicine: coverage, payment and use of personalized medicine diagnostics to dramatically improve the care patients receive. Guided by these areas of agreement and rich historical dialogue, we may be able to focus on those conversations sooner than we think.

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What ICER is Missing

by Amy M. Miller, Ph.D., PMC Executive Vice President


Amy M. Miller, Ph.D.

Personalized medicine challenges all aspects of health care, from the way discoveries are made to how they are regulated, covered, paid for and delivered in the clinic.

Since the mapping of the human genome 13 years ago, we have seen many efforts to alter, update and improve these processes to accommodate personalized medicines, innovative and novel diagnostic tests, and new approaches to care.  Excitement is palpable throughout the world, and personalized medicine’s proponents are no longer being accused of hyping a future that does not exist.

FDA’s new drug approvals demonstrate that about one in four new drugs (28 percent) are now targeted, a ratio likely to remain the same or increase in coming years.  As tech company NextGxDx’s count of genetic tests shows, there has also been an explosion of personalized medicine diagnostic tests on the market. Encouraged by the incredibly fast work of the National Institutes of Health (NIH) and FDA, U.S. policymakers in both chambers of the Republican-controlled Congress and the Democratic-controlled White House have expressed enthusiasm for the field’s potential.

Yet, some groups question the value of these advances.28-percent-of-fda-approvals-are-PMs

Take non-small cell lung cancer (NSCLC) for example. This disease exemplifies how a personalized approach can provide more for patients than the standard of care. Over a few short years, several new drugs and diagnostic tests for NSCLC have come to market, changing the trajectory of treatment for the disease. The first-generation ALK-targeted drug, for example, did not cross the blood-brain barrier; the second-generation therapy does. Diagnostics for NSCLC began with one-mutation tests, moved to panel tests for multiple mutations and are now moving into the realm of next-generation sequencing tests that reveal an even more comprehensive array of valuable information about the tumor. Thanks to immuno-oncology, we now have a new class of drugs to fight the disease.

Based on discoveries in clinical medicine, FDA regularly updates labels to move drugs from the second or third line to the front-line when paired with a diagnostic test. Teams of practitioners are learning about these new tools and putting them into practice.

The Institute for Clinical and Economic Review (ICER), which has released its evaluation of two classes of NSCLC drugs, may not share my excitement about these recent advances. The organization’s value assessment process has, by design or perhaps inadvertently, no mechanism for capturing the value of targeted medicines, since its model is built on population averages.

We strongly encourage advocates for personalized medicine to engage the organization and, as a first step, suggest that ICER evolve, like so much of the health care system already has, by treating personalized medicines and companion diagnostics differently than traditional therapeutics.

Comments on ICER’s draft evidence report are due September 16, 2016.

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ICER & Personalized Medicine: Time to Engage

by Amy M. Miller, Ph.D., PMC Executive Vice President


Amy M. Miller, Ph.D.

The Institute for Clinical and Economic Review (ICER) is a non-profit organization that uses available evidence to examine the value of therapeutics and suggest reasonable prices for them. The organization bases these judgments on a conceptual framework that combines its estimation of the clinical value of a particular drug with several other factors, including the drug’s overall budget impact.

This process may not work for personalized medicines, as became evident earlier this year when ICER examined therapies for multiple myeloma.  As the Multiple Myeloma Research Foundation pointed out in their letter to ICER, “the promise of precision medicine is that each patient is unique and will consequently respond to treatment differently based on their particular genetic profile and further understanding of the biology of their disease.” This statement is particularly true for patients with non-small cell lung cancer (NSCLC).

ICER is now evaluating some targeted treatments for NSCLC, but not all of them. It is unclear how the group is considering individual variation and the diagnostic tests that determine them, which are the foundation for progress in personalized medicine and health care generally.

PMC invited the organization’s chief methodologist to address the membership. Our members appreciated that he took time to explain the assessment methodology and the process stakeholders can use to provide feedback. Because ICER plays a unique role in health policy, with health plans being the primary audience for their work, PMC will suggest improvements to ICER’s system to ensure that resulting work accounts for the challenges involved in assessing value of treatments that work for specific subgroups of patients.

PMC then sent a letter to ICER asking for an open, inclusive and responsive public engagement process. This is more important than ever, since ICER’s evaluations have now been recognized by the Centers for Medicare and Medicaid Services (CMS) as a useful tool for evaluating how much the agency should pay for drugs as part of its Part B demonstration project, which would test new ways for CMS to pay for drugs delivered in a hospital or doctor’s office.

This summer, PMC will propose improvements to ICER’s public engagement process and methodology and comment on its draft NSCLC therapeutic evaluation once it is published in late August. We urge all PMC members to do the same.

You can find more information on ICER’s NSCLC work here:


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Informed Perspectives: A Preview of the Personalized Medicine & Diagnostics Track at the 2016 BIO International Convention

by Christopher Wells, PMC Communications Director


Christopher Wells

The Biotechnology Innovation Organization (BIO) has a long history of delivering impactful educational sessions about personalized medicine, and PMC is pleased to collaborate with BIO again this year to put together a Personalized Medicine & Diagnostics Track at the BIO International Convention.

Touching on a variety of topics that include clinical care, investment and public policy reform, the three-day program promises to deliver informed perspectives on the field’s current direction:

Tuesday, June 7

Titled “30 Years of Genomics — Bridging the Past With the Future,” the opening session details how the plummeting cost of genomic sequencing is making it possible for an increasing number of health care providers to begin delivering personalized care. We no longer ask whether we can afford to sequence human genomes at scale. Instead, we have begun to examine how we will analyze incredible quantities of genomic data and what that will mean for patients.

A panel of representatives from BioNano Genomics, Domain Associates and Edico Genome will join David Barker, Ph.D., former Chief Scientific Officer of Illumina, to examine these questions during the session, which takes place from 3:30 – 4:30 p.m.

Wednesday, June 8

Some believe widespread genomic sequencing will mean better preventive care for patients. Following introductory remarks from PMC President Edward Abrahams, Ph.D., the second day of the track will begin with an exploration of that idea during a session titled “Lifespan or Healthspan: Is it Time for a Paradigm Shift? An Interview with William N. Hait, Global Head, R & D, Janssen Pharmaceutical Companies of Johnson & Johnson.” Keith Yamamoto, Ph.D., who is the current Vice Chancellor for Science Policy and Strategy and the Vice Dean for Research in the School of Medicine at the University of California San Francisco (UCSF), will lead the discussion with Dr. Hait from 10:45 a.m. – 12:00 p.m.

But as PMC Executive Vice President Amy M. Miller, Ph.D., argues, the improved treatment and better preventive care to be discussed during that session can only be realized if public policies support personalized medicine. After lunch, she will lead a discussion with an industry expert and former Congressional staffers from both sides of the aisle regarding how recent legislative proposals may pave the way for the field. The session, called “Building Personalized Medicine Policy: The 21st Century Cures and Healthier Americans Legislative Proposals,” will take place from 1:00 – 2:00 p.m.

If successful, the kinds of public policies PMC champions will open the door to a future in which preventive care and improved treatment help lower systemic costs. Informed by that possibility, experts from JAWBONE, Johnson & Johnson, Simpatica Medicine and Sutter Health will then take another look at preventive care with a more concentrated focus on its systemic impact during a session titled “Personalized Health as a Potential Enabler of Personalized Medicine,” which will take place from 2:15 – 3:15 p.m.

Finally, informed by an understanding that industry stakeholders are invested in a personalized health care system, a panel of innovation experts from Oberland Capital, Roche, Helix, Renwick Capital, Parthenon-EY and GE Ventures will analyze which products and services in development may hold the greatest promise for advancing that kind of future during a session titled “Strategic Investment in Precision Medicine: Where to Put Your ‘Omics Dollars, NOW,” which will take place from 3:30 – 4:30 p.m.

The second day of the track will conclude with a cocktail reception co-organized with the leaders of the Digital Health Track.

Thursday, June 9

In recognition of the synergies between personalized medicine and digital health, the track’s final day will open with an important examination of the similarities between how evidence supporting both fields is evaluated. The session, titled “What Goes Around Comes Around: Applying Lessons Learned from Personalized Medicine on Evidence and Payer Coverage Requirements to Digital Health,” will take place from 9:00 – 10:15 a.m. It will draw on the perspectives of leaders from Evidation Health, GE Ventures, Quorum Consulting and UCSF to highlight the paths forward for both fields.

Wherever those paths may lead, there is widespread agreement that traversing them will require collaboration. In recognition of that opportunity, the track’s final session, titled “Companion Diagnostics: The Evolving Need for Progressive Partnerships Between Pharma and Diagnostics Companies,” will explore the value proposition for partnerships from both the pharmaceutical and diagnostic company perspectives. Senior leaders from Biodesix, Gritstone Oncology, Health Advances and Janssen Diagnostics will all take part in the discussion, which will run from 10:30 – 11:30 a.m.

As the personalized medicine community continues to navigate toward a paradigm shift in health care, PMC looks forward to discussing these and many other topics in San Francisco.

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Of Moonshots and Precision Medicine: Why the Time is Ripe for a National Cancer Moonshot

by Kenna R. Mills Shaw, Ph.D., Executive Director, Sheikh Khalifa Bin Zayed Al Nahyan Institute for Personalized Cancer Therapy, MD Anderson Cancer Center


Kenna R. Mills Shaw, Ph.D.

Vice President Joe Biden’s leadership of a national “cancer moonshot” is well-timed both to take advantage of and to enhance the hard-won capabilities of the nation’s cancer-fighting community.

Its proposed strategic investments in precision medicine, cancer immunotherapy, early detection, prevention, genomic analysis, data-sharing and collaboration can have a life-saving impact.

New approaches, based on decades of research, help patients now. The Wall Street Journal recently profiled the experience of a 23-year-old man struck with a particularly hard-to-treat form of acute myeloid leukemia (AML).

The story relates how genomic analysis of his leukemia led to targeted therapy that corralled his disease enough to permit a blood stem cell transplant. When his leukemia returned, his oncologists tried a series of treatments until another genomic analysis pointed to yet another targeted therapy. The result: remission, another stem cell transplant and now a year free of AML.

Such a relay race, moving from one therapy to the next to stay ahead of the disease, has been a hallmark of the treatment of advanced cancers for years. With the tools we have in hand now, we’re poised to ensure that more of these races than ever end with a victory.

How do we do better?

A national cancer moonshot can provide pivotal support and encouragement for focused efforts underway at comprehensive cancer centers and other institutions.

For precision medicine to flourish will take a coordinated research effort to truly understand the impact of genomic and molecular variations in cancer. About 120 genes out of the 21,000 in the human genome have variations that are actionable for cancer treatment. However, we find many more variations when we analyze tumors and most of the time we don’t know what they do.

One hindrance is the common assumption that all variations in a gene do the same thing — result in activation or inactivation of a molecular pathway. Not all mutations are created equally.

For example, a clinical trial underway at MD Anderson features a drug that targets a specific fusion alteration in a gene. Other variations in that same gene don’t necessarily cause malignancy or can render even therapy targeted at the fusion ineffective.

So it’s critical to combine genomic analysis with research in functional genomics, using patient-derived xenograft animal models and cell lines, and discovery genomics. We need to combine research data with clinical data, including treatment response, and to have this not just in a subset of patients, but in all patients.

It’s critical to use our combined research and clinical information in the context of tumor evolution during treatment. We need to change the paradigm of when we test patients’ tumors so it occurs closer to when they need to switch to a new therapy than is routinely the case now.

Multiple biopsies — be they liquid gathered from circulating biomarkers or through fine-needle or core needle approaches — will be needed to guide treatment, and are generally not covered by insurers now.

When MD Anderson established its Moon Shots Program in 2012, 10 platforms were established to support our effort to accelerate the pace of converting scientific discoveries into life-saving advances in treatment, prevention and early detection.

These platforms systematically and efficiently provide expertise, technological capacity and infrastructure to the “moon shots,” multidisciplinary teams of experts that focus on 12 cancer types.

Our areas of emphasis overlap with the priorities chosen for the national cancer moonshot. We’re connecting our clinicians, basic scientists, and professional drug discovery and development teams for innovative translational research and building a powerful infrastructure to combine, share and learn from clinical and research data.

All of this is coming together in innovative clinical trials and practice-changing advances.

The time is ripe for a national cancer moonshot to accelerate the progress that is underway now in institutions across the country.

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The Danger in a Demo: How CMS’ Medicare Part B Proposal Could Impede Patient Access to Personalized Medicine

by Amy M. Miller, Ph.D., PMC Executive Vice President


Amy M. Miller, Ph.D.

Today, PMC sent a letter to the Centers for Medicare and Medicaid Services (CMS) about their proposal to test new prices for drugs administered under Medicare Part B — a proposal that was developed without input from those who are most directly impacted: patients and physicians.

PMC has a long history of pointing out the unintended consequences of policies under consideration. This one is no different. The plan’s structure fails to account for the fact that one drug is not always equal to another when we are talking about targeted therapy and personalized medicines, which often represent extraordinary medical breakthroughs. These therapies can have an inordinate impact on patient outcomes. Furthermore, because they are only prescribed to the patient populations known to benefit from them, they may help us make better use of our health care dollars in the long term. As such, we should encourage the use of targeted therapies.

In contrast, CMS’ proposal would systematically disadvantage personalized medicine by burdening the most innovative new treatments with the deepest payment cuts. Hospitals and physicians’ offices that cannot adequately offset the cuts may be forced to stop prescribing these therapies to patients. That is a step backward not only for the field, but for medicine itself.

It should be noted that for the past 20 years, personalized medicines were novel — but that is no longer true. Over the past two years and into the foreseeable future, personalized medicines account for about 25% of the new drugs that come to market. This statistic does not account for label changes to existing drugs that indicate better use of them through innovative diagnostics. For patients to benefit from these significant and revolutionary advances in science, we must ensure that our coverage and payment policies support the use of these products and that researchers continue to investigate them.

In other words, for scientific advancement to best serve patient care, we must get policies like this one right.

We urge CMS to carefully design a program that supports innovative, targeted therapies. Personalized medicines treat diseases more effectively. They can improve both quality of life and survival rates. We welcome the opportunity to work with policymakers on this question and suggest that other stakeholders in personalized medicine engage in this conversation as well.