Precision medicine is built on the idea that medicine can find better solutions for individual patients. Oncology is the go-to example. An EGFR (epidermal growth factor receptor) inhibitor can be a winning therapy, provided the patient has mutant EGFR proteins driving their cancer. That’s where diagnostics come in.
That’s where diagnostics come in.
But so far, diagnostics have been a tough sell. While they’re necessary to fulfill precision medicine’s promise, no one really wants to pay for them. Diagnostics may be precision medicine’s unloved stepchildren and its incumbent that healthcare stakeholders understand their value.
“If you look at magazine cover after magazine cover…every time they talk about personalized medicine what is on the cover? A drug,” said Mara Aspinall, president and CEO at Health Catalysts to the audience at the recently-concluded Precision Medicine Leaders Summit. “Somehow, there is no acknowledgment of the importance of diagnostics.”
During a panel discussing ways to move diagnostics to the forefront of precision medicine, Aspinall noted that historically diagnostics have helped advance groundbreaking therapies. Broad microbial testing added value to antibiotics. Disease characterization improved chemotherapy’s efficacy against blood cancers. Viral load measurements optimized antiviral cocktails for AIDS patients.
While the relationship between drugs and diagnostics may seem self-evident, the two disciplines don’t always collaborate.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“Pharma doesn’t understand diagnostics; diagnostics (companies) don’t understand co-development of drugs,” said Tricia Carrigan, global head of translational assay technology for Bayer. “Every pharma is trying to make a difference in personalized medicine. Unfortunately, not every disease has clear biomarker signatures. We do need the power of the community and the AI and the deep learning to harmonize the data so we have better signatures.”
Another major problem is financial support. Because payers don’t always value their products, diagnostic companies can be uncertain investments.
“Investors are afraid [of] investing in these businesses,” said Don Hardison, president and CEO at Biotheranostics. “If you ask them why they’re not investing, it almost always comes back to getting paid. If the answer is that you’re going to get paid ten dollars, is it even worth doing?”
Early collaboration might help diagnostics companies overcome this barrier. It’s important to gauge the market and drive development accordingly.
“It’s very difficult for them to break into the market with the current reimbursement,” said Hannah Mamuszka, founder and CEO at Alva10. “Engaging payers earlier, as well as the regulatory process, to ascertain what kind of value a particular test will obtain on the market. That’s where you can change the economics and get the investors on your side.”
Unfortunately, payer outreach often comes after the product is developed, which may not be optimal.
“If you’re the payer, think of someone showing up at your door and saying: ‘Hi, pay me. Here’s something you didn’t know you wanted or maybe you don’t want,” said Mamuszka.
Mary Stevens, director of network contracts, compliance, audit and provider relations at Blue Cross Blue Shield of Minnesota – the payer on the panel – believes insurance companies need to be educated about diagnostics, but that’s only part of the picture. Physicians and patients must be onboard as well. Patients often ask their doctors for specific medications they’ve seen on television, but rarely recognize the importance of diagnostics.
“The patients are educated on those things,” said Stevens, “they are not educated on diagnostics and that has to change.”
The panel repeatedly returned to education. Physicians, pharma companies, and payers don’t always see the benefits. However, that doesn’t mean they’re not interested.
“You can’t value something if you don’t understand it,” said Stevens. “There is an appetite for true innovation…There has to be a better way to explain that something truly is new.”
While payers are still behind the curve, VCs seem to be caught up when it comes to investing in diagnostics companies.
Photo: A-Digit, Getty Images
