Aligning the Economic Value of Companion Diagnostics and Stratified Medicines

Abstract

The twin forces of payors seeking fair pricing and the rising costs of developing new medicines has driven a closer relationship between pharmaceutical companies and diagnostics companies, because stratified medicines, guided by companion diagnostics, offer better commercial, as well as clinical, outcomes. Stratified medicines have created clinical success and provided rapid product approvals, particularly in oncology, and indeed have changed the dynamic between drug and diagnostic developers. The commercial payback for such partnerships offered by stratified medicines has been less well articulated, but this has shifted as the benefits in risk management, pricing and value creation for all stakeholders become clearer. In this larger healthcare setting, stratified medicine provides both physicians and patients with greater insight on the disease and provides rationale for providers to understand cost-effectiveness of treatment. This article considers how the economic value of stratified medicine relationships can be recognized and translated into better outcomes for all healthcare stakeholders.

Market Access Advancements and Challenges in “Drug-Companion Diagnostic Test” Co-Development in Europe

“…The study of the risk of clinical trial failure in non-small cell lung cancer (NSCLC), based on data from 676 trials, showed that only 11% of regular medicines had passed all three phases of clinical testing and received marketing authorization, while biomarker targeted therapies were found to have the highest success rate of 69% [ 7 ]. Apart from this study, many scholars also suggest that the use of biomarkers reduces the overall attrition rate and simplifies the regulatory approval process [ 8 , 9 ]. For example, Roche, in partnership with Plexxikon, developed the biomarker-based Cobas™ 4800 BRAF V600 Mutation Test, which enabled the marketing authorization of Zelboraf in less than six years from the discovery time of vemurafenib, while in average it takes 10–15 years for a drug to reach the market [ 10 ].…”

“…Since diagnostics are required at different stages of pre-clinical and clinical studies, it is important for the Dx and Rx companies to synchronize their development programs to ensure complete understanding of common objectives, timeliness and cost-risk optimization patterns. Partners should align and continuously develop target product profiles (TPPs) of an agent and diagnostics to articulate the technical, clinical and commercial performance of the test that will ensure successful development of a linked stratified medicine [ 8 ]. A well-developed TPP should be the guide for strategic clinical development decision-making and involve enough criteria of the agent’s actual clinical profile vis-à-vis the integral characteristics of a potentially successful product.…”

“…Several studies of the economic uplift of “therapy-test” combinations showed that despite a wide disparity in relative markets and pricing, the economic impact of the CDx to a “therapy-test” co-development program, in terms of the contribution to the net present value (NPV) of the combined Rx-CDx product, is projected to increase from USD 900mn to USD 2.7bn over a twenty year period, which is substantial [ 8 ]. But, as long as this value is not reflected in the clear evidence for payers with detailed specifications of economic and monetary benefits, there is no way to bridge “Rx-CDx” partners and reimbursement authorities.…”

Environmental Scan on Pharmaceuticals Requiring Companion Diagnostics

“…o A third company projects that the global market value of CDx is expected to grow from US$3.1 billion in 2014 to US$8.7 billion in 2019, representing a CAGR of 22.7 percent for the forecast period (12). With respect to a collaborative model, the availability of internal diagnostics divisions within pharmaceutical manufacturers, such as at Roche, Abbott, and Novartis, does not as yet appear to represent a more favorable structure than the use of external diagnostics providers, such as at GlaxoSmithKline, Pfizer, or AstraZeneca (15). Of note, the number of co-development and partnership agreements between pharmaceutical and diagnostic manufacturers increased from seven in 2008 to twenty-five in 2010; thirty-four of the forty-four (77 percent) deals made in 2009-10 were for oncology indications (16).…”

Stratified Medicine: Will it be the Future of Medicine?

“…No consideration is attributed to the clinical or economic value of the test. 30 The additional cost has to be covered up from the hospital budget, thus providing hospitals with no incentive for backing the diagnostics. 28 This shows…”