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Companion Diagnostics & Personalized Medicine
Nandini Hadker, Managing Director, UBC
James Parrish, Director, Pfizer
Michael Epstein, Director, UBC
What will the future bring?
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The product development andcommercialization process is
challenging
Limited clinical pipeline Looming
patent expirations maintaining
revenue base
High costs of clinical trials
Increasing the success rates ofcompounds in clinical trials
/ Lower appetite for failure
Need for risk sharing for product
development costs
Driving revenue and sales targets,
capturing ROI
Competitive pressure
Increasing physician and payer demand
for evidence requirements for
prescribing, coverage & reimbursement
High cost of new therapies
Payer pressures to manage / contain
healthcare costs
Payer demand for targeted therapies
Payer demand for pay-for-performance
models
Internal Challenges External Challenges
What can we as Market Researchers do about this?
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To justify use, a new medication will have todemonstrate
clinical and economic value
EconomicValue
ClinicalV
alue
How does the medication change patient diagnosis
and management?
How does the medication fit with the current
treatment algorithm?
How can the medication improve patient outcomes?
How does the medication compare with the current
standard of care (SOC)?
How will the medication affect our budgets? Will it
be net negative, net neutral, or net positive?Can the medication
provide better treatment
outcomes without increasing healthcare costs?
Is the medication cost-effective vs. the SOC?
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The medical value story
The market is demanding a total value equation as a pre-
requisite for adoption of new therapies and rationalizing
existing therapies.
The clinical and economic value story need to go hand in
hand
in developing the total medical value story of the
medication.
ClinicalValue EconomicValue
MedicalValueStory
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Maximizing the Medical Value Story
Medical Value is maximized when a product can effectively
demonstrate both Clinical and Economic Value via compelling
evidence.
ClinicalEvidence
EconomicEvidence
Low High
Net
negative
Net
neutral
Netpositive
Lower payerbarrier but
adoption rates low
Lack of value
proposition
Little or nojustification for
market acceptance
Coverage issuesfor the product
Favorable medical
value story for the
product
Highly favorablemedical value story
for the product
Medical Value Map
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Companion Diagnostics An emerging trend
One approach thats getting increased attention is the
integration of
diagnostic tests to drive healthcare decision making.
Companion diagnostics are diagnostic products that can
identify
patients most suitable for therapy, stratify patient risk, and
guide
treatment modifications.
TherapyCompanion
Diagnostic
Targeted
Therapy
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Rationalizing Treatment Decisions withCompanion Diagnostics
Stand-alone
diagnostic value
Stand-alone
diagnostic value
Treatment
selection
Treatment
selection
Optimizing
treatment
dosing
Optimizing
treatment
dosing
Treatment
monitoring /
modification
Treatment
monitoring /
modification
Diagnostic helps in
identifying thedisease condition
earlier or achieving
a definitive
diagnosis leading
to treatment
initiation
EFFICACY: CDs
helps identifypatients that are
most likely to be
responders and
non-responders to
a treatment.
CDs helps in
improving theefficacy of drug
through optimized
drug dosing,
especially for drugs
having a narrow
therapeutic index
and a dose-limiting
toxicity profile
CDs helps in
monitoring theprogression of the
disease during the
drug treatment
If disease is
progressing, the
diagnostic can
guide treatment
modification
SAFETY: CDs
helps in patient risk
stratification, i.e.
identify patients
more or less
susceptible to AEs
Diagnostic test Companion diagnostic + Treatment
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The Value Proposition of Companion Diagnostics
The right treatment, using the right tests for the right
patient
Drive rational healthcare resource utilization
ClinicalValue
EconomicValue
MedicalValue Story
CDs can inform:
Appropriate
responderselection
Patient risk
stratification
Therapy dose
and duration
CDs can drive:
Rational resource
utilization Cost savings
Reduced budget
impact
CDs can drive:
Improved clinical
outcomes Rationalize
healthcare
decisions
Cost
effectiveness in
healthcare
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The Business Rationale for Various Stakeholders
Educate andfacilitate appropriateutilization oftreatments driven
byevidence (right tests,right patients, righttime)
Develop Rx-companion Dxstrategy tomaximize the valueand ROI of
assetsthroughout theproduct lifecycle
Improve healthoutcomes and qualityof life by avoidingdrug
treatments thatare ineffective and /or unnecessary
Drive rationalutilization ofhealthcareresources
Generatesavings throughappropriate Rxutilization
PayorsPayors PatientsPatients
ProvidersProvidersManufac-
turers
Manufac-
turers
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Companion Diagnostics: Success Stories and the Cost ofNot
Doing
Herceptin (trastazumab) a monoclonal antibody active against the
Her2-neu receptor.
The diagnostic test for HER2-neu determines which patients
should receive the drug Herceptin.
The incorporation of the CD in Herceptin clinical trials was
considered pivotal in the drugs approval and
uptake.
K-RAS for Erbitux and Vectibix The diagnostic test for K-RAS
mutation can identify patients with colorectal cancer that will not
respond to
treatment with panitumumab (Vectibix) and cetuximab (
Erbitux).
Patients with K-RAS mutations are not responsive to Erbitux and
Vectibix. K-RAS testing is now routinely conducted in the U.S. for
treatment selection of Erbitux and Vectibix.
HER2neu for Herceptin
Avastin in Breast Cancer
2008 2010 2011
US FDA approved Avastin for
Breast Cancer based on one
study suggesting it halted thespread of breast cancer for
more
than five months when combined
with chemotherapy.
NICE denies coverage.
Follow-up studies showed that
the delay lasted no more than
three months, and patientssuffered dangerous side effects.
FDA recommendation to remove
breast cancer indication from the
label for Avastin.
In FDA appeal, Genentech
proposed a biomarker strategy to
keep available for bestresponders.
Genentech is proposing to
conduct a RCTincluding a
biomarker
Source:
http://www.springerlink.com/content/r70g303550wu256v/Accessed
September 13 2011
http://blogs.wsj.com/health/2009/07/20/erbitux-vectibix-label-change-approved-for-kras-gene/
Accessed September 13 2011
http://www.npr.org/blogs/health/2011/06/29/137493653/avastin-as-breast-cancer-treatment-tests-fdas-ability-to-say-no
Accessed September 13 2011
http://www.reuters.com/article/2010/07/08/us-roche-avastin-idUSTRE6676AP20100708Accessed
September 13 2011
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Commercializing Companion DiagnosticsFacilitators and
Barriers
Rapid advances in science and technology
Emphasis by the FDA and EMEA on greater use of biomarkers
and
companion diagnostics.
Evolving regulatory requirements for Laboratory developed Tests
(LDTs)
and In-vitro diagnostics (IVDs).
Payers are beginning to require prior authorization for the
most
expensive oncology therapeutics.
The biology gap.
Clinical cut-offs remain challenging.
Regulatory policies and pathways for therapies and companion
diagnostics are not aligned. Historically low reimbursement for
diagnostics.
Companion diagnostics typically funded by Rx company which needs
for
approval and/or adoption of new therapeutic.
Fa
cilitators
Barriers
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Real World CommentsIllustrative quotes from Pharma Execs
Positives
Personalized medicine in the
way of the future. No doubtabout it.
My company just started a new
department calledPersonalized
Medicine its getting a lot of
attention in the organization.
Weve been getting a lot of push
back from payers targeted
therapies should help.
Negatives
Why would I use a diagnostic to
tell the physician who should NOTreceive my product? Why would
I
limit my market share??
The clinical team at Pharma X
gets it; but the commercial team
doesnt
I see the science-value of CDx,
but what is its business value??
What is my economic motivation
to invest in PM?
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Case Study 1
Commercial Assessment for a Companion Diagnostic for a
Neurological Condition
DiseaseModifyingTherapy
(PRODUCTX)
CompanionDiagnostic
(TEST Z)
TargetedTherapy forNeurological
condition
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Product X, currently in clinical trials, has the potential to be
amongthe first disease modifying agents (DMAs) for a
neurological
condition.
This therapy area is poorly served by marginally effective
symptomatic therapies. Costs associated with this
neurological
condition are well acknowledged to be astronomical.
Test Z, under development by an imaging diagnostic
manufacturer,
can identify the onset of the neurological condition, with
greater
accuracy and less subjectivity than currently used tests.
A key question we sought to answer was: Should the
manufacturer
of Product X acquire Test Z as a companion diagnostic?
To address this question, we designed a multi-stakeholder
study
with KOLs, physicians and payers.
Case Study 1: Commercial Backdrop
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Case Study 1: Clinical Evidence for Test Z
Physicians welcome Test Ztouting its utility in informing
patients.
However, given the lack of
DMAs for the neurological
condition, payers feel Test Z
would have no clinical utility.
Physician to mention that their
treatment algorithm would not
change as a result of Test Z.
Once a DMA enters into the
market, Test Z would have a
higher clinical utility as it would
help in earlier diagnosis of the
condition.
Prior to Launch of DMA Post DMA Launch
Physicians and Payers value Test Z because it provides
accurateand objective diagnosis, eliminating ambiguity in
identifying
patients with the condition, and allowing for early therapy
intervention. But opinions vary in terms of timing of launch
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Case Study 1: Economic Evidence for Test Z
In the absence of a DMA,
payers considered the test to
be a net negative and were
unwilling to cover it.
It is a cost to the system
without a benefit whatsthe use?
If the patient still cannot
be treated, how does the
test help?
Once the DMA entered the
market, payers see its value in
providing rationalization for
restricted access to the DMA,
which was expected to be a very
expensive medication.However, even then, timing
of patients 1stpresentation is
key and may impact
coverage.
Prior to Launch of DMA After Launch of DMA
The entry of effective DMAs would change the game entirely
forpayers and physicians.
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Case Study 1: Commercial Assessment
It became clear that the commercial opportunity was
significantly
smaller than originally envisioned as coverage would be
restricted prior to availability of a DMA.
Post launch of a DMA, Text Z would have a higher commercial
opportunity.
Size of Test
Zs Market
Opportunity
Time
Launch ofDMA
Can we
capture this
value?
* While physicians
see the value,payers will push
back.
Test Z PatentExclusivity
ends
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Case Study 1: Commercial Assessment
Test Zs success then hinges critically upon the availability of
the
DMA.
ClinicalEvidence
EconomicEvidence
Low High
Net
Negative
Net
Neutral
Net
Positive
Lower payer barrier
but adoption rates
low
Lack of value
proposition
Little or no
justification for
market acceptance
Coverage issues
for the product
Favorable medical
value story for the
product
Favorable medical
value story for the
productValue proposition of Test Z
after DMA is available
Value proposition of Test Z
prior to the DMA
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Case Study 2
Value Proposition for an Oncology Product in Combination with
aCompanion Diagnostic
OncologyProduct
(PRODUCTA)
CompanionDiagnostic
(TEST B)
ImprovedEfficacy,BetterSafety
Treat only responders Improve clinical outcomes
(survival, PFS)
Limit side effects to
responders only
Reduce overall spend
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Product A, is an oncology product, currently in development.
Product A demonstrates a moderate overall survival (OS) and
progression free survival (PFS) over existing standard of
care
(SOC), with a slightly higher toxicity profile.
Subsequently, Test B was identified that could identify the
sub-set
patient population that were responders to Product A. Strong
sensitivity and specificity of Test B.
Product A demonstrated a superior OS and PFS in responders
than in non-responders (significantly higher than without Test
B).
A key question we sought to answer was: What is the
incremental
value proposition of Product A + Test B, versus Product A
alone?
To address this question, we designed a multi-stakeholder
study
with oncologists and payers.
Case Study 2: Commercial Backdrop
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Case Study 2: Clinical Evidence for Test B
Product As high toxicity profilefor all patients outweighs
its
moderate OS and PFS
benefits.
As a result, by itself, Product A
does not generate much
interest among oncologists and
payers.
Likelihood to recommend
and prescribe are low
Test B is a game changer,allowing oncologists to identify
likely non-responders, and
preventing them from needlessly
being exposed to Product As
toxicity with no therapeutic
benefit.
Product A, by itself Product A + Test B
Oncologists and Payers identify the clinical advantages of
usingTest B - to identify treatment responders and non-responders
to
Product A.
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Case Study 2: Economic Evidence for Test B
Payers question the cost
effectiveness of Product A,
particularly if it is prescribed for
a large number of patients who
will realize no therapeutic
benefit but experience toxicside effects.
Test B rationalizes use of
Product A in payerseyes,
making its approval and
reimbursement a slam dunk to
nearly all payers interviewed.
Product A, by itself Product A + Test B
Availability of Test B provides a cost-justification to the use
ofProduct A making it more likely for Product A to get
reimbursed
upon approval.
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Case Study 2: Value Proposition Assessment
Product As value proposition is limited without Test B,
strong
with Test B.
ClinicalEvidence
EconomicEvidence
Low High
Net
Negative
Net
Neutral
Net
Positive
Lower payer barrier
but adoption rates
low
Lack of value
proposition
Little or no
justification for
market acceptance
Coverage issues
for the product
Favorable medical
value story for the
product
Favorable medical
value story for the
productValue proposition of Product
A + Test B
Value proposition of Product
A by itself
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Case Study 2: Making the Case
Test B not only improves the value proposition of
Product A, but also allows Product A to command a
higher price point (than with Product A alone).
Product A, by itself could be priced below the current
SOCs.
With Test B, Product A can now be priced at par to SOCs
or at a 30% premium to current SOC (depending on
thecountry).
So do the positives make a slam dunk case for a companion
diagnostic for Product A + Test B?
NOT SO FAST!
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Case Study 2: Making the Case
Many concerns were mentioned upon scrutinizing the
process required:
The logistics of using Test B are challenging.
Oncologists perceive shipping samples to specialty
testing labs as barriers that will reduce use
Clinical cut off points are difficult to understand and
interpret in clinical practice If a patient did not reach the
clinically validated cut
off value, but came close, should the physician deny
treatment?
Moral hazard and liability issues were raised by both
physicians and payers.
The tests sensitivity and specificity were called
intoquestion.
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Case Study 2: Making the Case
Ultimately, it comes to the pricing model.
How should the companion diagnostic combination be paid
for?
Should Test B be made available free of cost?
Thats unfair to the diagnostic test manufacturer.
Payers push back on paying for treatment costs related
to non-responders. Payers demand pay for performance model
Pricing model between oncology and diagnostic
company is tested.
Pricing model between manufacturers and payers falls
apart.
The million dollar question: while the companion
diagnostic makes clinical sensedoes it make
economic sense?
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Closing Comments
The pairing of companion diagnostics and therapies present a
new way of patient treatment the right medication to the
right
patient.
The market place understands the medical rationale
But the economics are as yet under-developed
Pricing models, risk sharing schemes, pay for
performance needs to be clarified
All stake holders need to benefit to facilitate progress:
Pharma / biotech companies
Diagnostic companies
Physicians
Payers
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Closing Comments
What will the future bring us?
Some safe predictions:
Advances in science will make more companion diagnostics
available.
Evolving regulatory guidelines and cost-constraints on health
care
stakeholders will further drive the need for companion
diagnostics
and therapies. What remains to be seen:
How will adoption models work?
Who will bear the costs of development and share the risk
burden?
Who will educate and train physicians?
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Closing Comments
We believe that the commercialization process will remain
challenging but that industry has few alternative choices.
As seen in the two case studies, the commercialization of
companion
diagnostics and therapies is not a straight forward process.
Several other examples speak to the challenges and good
technologies dying on the vine.
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Closing Comments
Clarify the
business
model
Articulate the
true clinical and
economic value
of thecompanion
diagnostics
Develop win-
win strategies
for market
access and
Communicate
withphysicians,
payers, PBMs
and patients
to drive
adoption.
Successful companies will be those that can effectively:
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Contacts
Nandini HadkerManaging Director, Commercial Strategy
United BioSource Corporation
[email protected]
James Parrish
Director, Business DevelopmentPfizer
[email protected]
Michael Epstein
Director, Commercial Strategy
United BioSource Corporation
[email protected]
