Personalized Medicine May Rationalize the Coverage of Specialty Therapies - Medicines targeted to select patients can justify premium prices, reduce drug safety problems, and improve care - BioPharm


Personalized Medicine May Rationalize the Coverage of Specialty Therapies
Medicines targeted to select patients can justify premium prices, reduce drug safety problems, and improve care

BioPharm International
Volume 20, Issue 12

More cancer drugs are being approved for patient subsets as a result, as well as diagnostics for genomic markers. However, links between tests and treatment has raised questions about the viability of drug-diagnostic co-development. Pharmaceutical and biotech companies are using diagnostics in clinical development and incorporating test information into drug labeling. But sponsors have opposed explicit FDA policies for bringing a validated diagnostic to market along with a new therapy, as outlined in an FDA concept paper issued in 2005.

While the shift to targeted medicine may spur development of innovative diagnostics, the trend promises to broadly influence clinical trial design and conduct. FDA officials believe that personalized clinical trials structured to identify responsive or at-risk subgroups will be able to determine correct dosing, reduce toxicity, and monitor response at a lower cost with greater likelihood of success. At the same time, there are fears that targeted clinical development may be more expensive and complex. Some experts are skeptical that sponsors will be able to use genetic testing to eliminate non-responsive individuals from trials and note that clinical trial sample sizes may have to be larger to obtain meaningful data on subgroups.


Perhaps the most important gain from targeted medicines lies in the potential to avoid adverse events in clinical research and after a drug comes to market. Earlier information on why drugs cause severe reactions in some individuals could prevent the loss of drugs like Vioxx, pointed out George Downing, director of the HHS personalized healthcare initiative at the PMC conference.

Several collaborations aim to identify genetic markers that may help predict which individuals are at risk for serious drug-related adverse events. The International Serious Adverse Events Consortium (SAEC), which includes GlaxoSmithKline, Abbott, Johnson & Johnson, Pfizer, Roche, sanofi-aventis, and Wyeth, is examining whether genetic data can be linked to drug-related liver toxicity and the rare skin condition called Stevens-Johnson syndrome (SJS). The plan is to examine DNA for evidence of certain side effects in individuals taking certain drugs. If successful, SAEC will examine cardiology problems or kidney disease associated with certain medicines.


A prime objective of health plans, insurers, and pharmacy benefit managers is to use pharmacogenomic data to better inform drug coverage and reimbursement. Current drug pricing models are under considerable pressure, particularly as US consumers face co-pays up to 25% for high-cost biotech therapies, noted Dan Mendelson, president of Avalere Health.

The solution lies in shifting the drug reimbursement system to reward treatments that provide better quality at an overall lower cost of care, explained former FDA commissioner Mark McClellan at the PMC conference. Medco Health is assessing whether genetic testing can identify those patients most likely to benefit from the use of tamoxifen to prevent breast cancer or suffer adverse events from taking warfarin. Results may prompt Medco and other PBMs to require testing for patients taking this and similar medications. This, they hope, will reduce wasted spending and steer non-responsive patients to more effective alternative treatments.

Pharmaceutical and biotech companies are looking for innovative drug pricing models to gain coverage for high-cost specialized medicines. Some manufacturers are offering capped population pricing and other risk approaches, where the company guarantees a payer a certain expenditure based on the outcomes of a targeted patient population. Business models for personalized medicine will feature smaller, more targeted clinical trials, risk-based pricing, and marketing approaches that emphasize physician education and incorporate diagnostic testing.

Jill Wechsler is BioPharm International's Washington editor, Chevy Chase, MD, 301.656.4634,

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