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Personalized Medicine Continued Growth in 2017 Despite Political, Reimbursement Uncertainty


NEW YORK (GenomeWeb) – The personalized medicine field continued to grow in 2017 despite the political melee in Washington, DC, and ongoing reimbursement difficulties for molecular diagnostics.

This past year, the US Food and Drug Administration approved more molecularly targeted indications for drugs than in previous years. By GenomeWeb's count, the agency approved 19 molecularly defined drug indications in 2017, compared to 14 such indications in 2016, and around a dozen indications in 2015 (see pdf of approvals chart). The FDA also granted marketing authorization to four next-generation sequencing panel tests — Thermo Fisher Scientific's Oncomine Dx Target Test, Illumina's Praxis RAS panel, Memorial Sloan Kettering Cancer Centers' MSK-IMPACT, and Foundation Medicine's FoundationOne CDx — that analyze multiple genes and identify variants that can help personalize cancer treatments.

Test commercialization agency Diaceutics estimated that there are now 200 therapies on the FDA's list of drugs with pharmacogenomics information in labeling, marking 20 percent year-over-year growth for the last three years. Diaceutics evaluated more than 250 late-stage therapies under development at drug companies and found that around three-fourths are diagnostics enabled, maintaining the trend from 2016. 

In fact, 2017 represented a record year in terms of what pharmaceutical companies were willing to spend — more than $1 billion — on commercializing tests to support personalized therapies. In the past, some drugmakers have left test commercialization efforts up to the diagnostic partner or to "market forces" and this has negatively impacted the uptake of the therapy.

However, this was the first year pharma's test commercialization expenditure crossed the billion-dollar threshold, noted Steve Vitale, managing director of Diaceutics' marketing team, which suggests a growing appreciation of the importance of the diagnostic to drive treatments to the right patients. On average, pharma's test commercialization spend was around $3 million per therapeutic asset in the year of launch, but some drugmakers spent as much as $13 million to ensure that there was "an efficient testing market" to support the drug in first 12 to 18 months of commercialization.

Diaceutics' data also points to pharma's continued investment in exploring biomarker-guided personalized treatment strategies, as they inked around 90 partnering deals with diagnostics developers to advance personalized medicines last year, compared to 80 deals in 2016 and 50 in 2015. Just more than 50 percent of these deals were focused on diagnostic development, while the rest were biomarker discovery and bioinformatics research arrangements.

The FDA has moved rather cleverly into the space by suggesting that there are alternative ways to provide the regulatory clarity for diagnostic tests. 

"This has been an exciting year, with new products and new technologies coming to the market," said Personalized Medicine Coalition President Edward Abrahams, highlighting that 2017 saw the approval of the first tissue-agnostic pan-cancer indication for the immunotherapy Keytruda (pembrolizumab). "All of that suggests that the field of personalized medicine is moving very rapidly toward changing the way we think about health and disease." 

Under a new administration that promised to roll back regulations following the 2016 presidential elections, the FDA tabled its controversial bid to regulate lab-developed tests. However, over the last 12 months, the agency used the product review process to clarify its regulatory approach towards personalized medicines, and advanced a streamlined review pathway for biomarkers and diagnostics used to home in on the best responder population for these therapies. 

For example, based on its experience approving the pan-cancer indication for Keytruda, the agency issued draft guidance discussing the principles other sponsors can follow to advance similar products. With the authorization of MSK-IMPACT, a 468-gene NGS test for informing cancer treatments, the FDA made New York State Department of Health a third-party reviewer of similar cancer panels, and outlined the evidence sponsors would need to submit to support three different types of biomarker claims: companion diagnostic, cancer mutations with evidence of clinical significance, and cancer mutations with potential clinical significance. 

This year also brought clarity for companies seeking to market health-related genetic testing directly to consumers with FDA's authorization of 10 genetic health risk reports sold by 23andMe. Based on its experience reviewing 23andMe's DTC tests, the FDA said it would allow companies to commercialize new genetic health risk tests without additional review after they achieved marketing authorization of an initial test. (The FDA, however, continues to restrict DTC sales of tests for cancer predisposition, pharmacogenetics, prenatal testing, and determining autosomal dominant variants.) 

While continuing to communicate its regulatory thinking to industry through product approvals, the FDA has stayed away from overhauling the regulatory framework for LDTs. Newly minted FDA Commissioner Scott Gottlieb has left that work up to Congress, a position that pleases the lab industry.

"The FDA has moved rather cleverly into the space by suggesting that there are alternative ways to provide the regulatory clarity for diagnostic tests that we believe the field needs to move forward," Abrahams said. 

Stormy politics

During the year, the political climate in Washington, DC, was perpetually stormy, and brought seismic changes in staffing and policy focus across government agencies. At the FDA, two officials who helped shape the agency's stance on personalized medicine and genetic tests, Alberto Gutierrez and Elizabeth Mansfield, left government service.

Despite internal administrative changes, the agency maintained its focus on personalized medicine. "In the context of what's gone on at other agencies, this is rather un-tumultuous," Abrahams said. He praised Gottlieb for coming into the agency this year and deftly "moving the pieces on the chessboard" to make sure personalized medicine efforts already underway weren't stymied as some had feared.

He attributed this to the fact that personalized medicine has bipartisan support, which may be one reason for the outcry against H.R. 1313. The bill, sponsored by House Committee on Education and the Workforce Chair Rep. Virginia Foxx (R-NC), states that as long as an employer-sponsored wellness program complies with a certain section under the Public Health Services Act, it will also be in line with the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act. This legislation would make it so employees who choose not to divulge genetic information within voluntary wellness programs would also forgo thousands of dollars in savings on the cost of their health insurance plans. 

"There was an enormous amount of anxiety over what this [bill] could mean for patient confidence in sharing their genetic information [for personalized medicine research]," Abrahams said, noting the lack of support for H.R. 1313 among PMC members, even large employers that would like to offer wellness programs to their employees.

The bill didn't get much traction throughout 2017 after being introduced in the House in March. The Committee on Education and the Workforce issued a report on the impact of the bill in December, and the Energy & Commerce and Ways & Means committees discharged the bill without their own markup. "This means that the House could vote on the bill," said Derek Scholes, director of science policy at the American Society of Human Genetics, one of the many groups that lobbied against H.R. 1313. "We have no indication that such a vote is imminent. But if it were to come to a vote, we'd contact members of the House and urge them to vote against the bill."

Experts in the genomics field believe the bill, if passed, would leave employees more vulnerable to employment discrimination based on their genetic data and could discourage them from participating in projects like the National Institutes of Health's All of Us Research Program, which aims to fuel precision medicine research with the medical, environmental, and genomics data form 1 million Americans.

The NIH, with Francis Collins still at its helm, was one government agency that held on to Obama-era leadership and continued progress on high-profile projects like All of Us, though some have argued that the project is advancing more slowly than they would have liked. All of Us was expected to launch last year, but now is slated to begin national enrollment this spring. The program entered beta testing over the summer, and before 2017 ended, the program's genomics working group released a report suggesting the national project conduct a pilot study to evaluate the feasibility of genotyping and whole-genome sequencing participants. 

At a recent personalized medicine conference, Stephanie Devaney, deputy director of the All of Us program, tried to mollify concerns about the long-term success of the project noting that her team has discussed the effort with the "highest levels" of the Trump Administration and highlighted that Congress granted $1.45 billion in additional funding over 10 years. 

As the project readies for national launch, however, healthcare providers and researchers have expressed concerns that All of Us will be able to encourage minority and traditionally underserved populations from partaking in the program, particularly given the Trump Administrations' policy positions around immigration.  

"Genetic information impacts everybody, regardless of race, ethnicity, or gender," said Andrea Forman, senior genetic counselor at Fox Chase Cancer Center in Philadelphia. The fact that a majority of genetics research involves mostly populations with European ancestry has slowed the mainstreaming of this information into healthcare.

Forman has to tell every minority patient getting genetic testing to learn their cancer risks that they are more likely to get inconclusive results. "If we want to see this growing utilization and normalization of [genetics] being part of care, we're not going to get to that point if we don't keep reaching out to underserved populations to encourage participation in research," she said.

During the year, the president also pushed Republicans in Congress to help him deliver his campaign promise to repeal the Affordable Care Act. The repeated attacks on the ACA created confusion among patients, and genetic counselors and patient advocates observed an uptick in people declining genetic testing to lean their cancer risks due to fears that the test results could negatively impact insurance coverage. 

"Even as we're getting to where there is more familiarity and comfort with genetic testing, we're now struggling with new fears that are coming with the policy questions around privacy and what will this mean for my kids' insurance," Forman said.

As access to genetic testing grows, genetic counselors should be on the front lines helping patients understand their results and addressing their concerns, but this is not always the case as alleged by the medical malpractice lawsuit filed last year by Elisha Cooke-Moore, who lives in a remote region of Oregon. Recognizing that patients' genetic counseling needs are growing, the National Society for Genetic Counselors in 2017 updated the "Find a Genetic Counselor" feature on its website so patients can seek out counseling via telephone or in person. 

"You might be in the middle of nowhere, but the idea is that if you've got a phone, or a computer, you can potentially get to a genetic counselor," Forman said. "The hope is to get that more widely known."

We want to see more winners than losers, and right now, that balance is a little out of whack. 

Reimbursement pressures

An oft-cited statistic about the rapid growth of the genetic testing industry in 2017 was that there are some 60,000 tests on the market and around 10 new testing products launched daily. In line with growth in the market, insurers are also increasing their spending on genetic testing, much of which they deem to be unnecessary and not covered under policies.

In reaction, two large private payors, Anthem Blue Cross and UnitedHealthcare last year implemented automated prior authorization programs for genetic tests. The aim of these schemes is to rein in spending for insurers, and unsurprisingly, they increased coverage denials, particularly for patients receiving next-generation sequencing to assess risk of hereditary cancers and cardiovascular diseases. 

Genetic counselors, who are often the ones determining appropriate testing for patients, say these prior authorization schemes are limiting access for patients who would benefit from testing. Some genetic counselors said they spent hours trying to navigate these automated systems, only to get a denial that they'd then have to spend more time trying to overturn. 

As an example of the types of challenges these programs are creating, Forman noted that UnitedHealthcare was requiring genetic counselors to submit prior authorizations for genetic testing, but then when coverage was denied, the payor would not speak to a genetic counselor for a peer-to-peer review to discuss the case. After numerous objections, UnitedHealthcare eventually changed its policy and now conducts peer-to-peer reviews with genetic counselors.

"I'd like to think that insurance companies and people making decisions about access have the best interests of the patients in mind," Forman said. "But [these requirements] often come across as deliberate barriers to access."

The genetic testing industry also received greater clarity from the Centers for Medicare & Medicaid Services last year regarding the circumstances under which it is willing to reimburse NGS testing panels, such as FoundationOne CDx and MSK-IMPACT. The lab industry has significant concerns about this draft national coverage determination given the limited setting in which CMS intends to pay for tests without FDA clearance or approval. 

In addition to coverage pressures, genetic testing companies and the broader laboratory industry in 2017 also had to grapple with the impending implementation of a new market-based Medicare pricing law, known as the Protecting Access to Medicare Act. The American Clinical Laboratory Association spent much of its energies during the past year trying to convince CMS to delay implementation of PAMA and adopt a methodology for determining prices that includes all sectors of the lab industry.

Despite the group's efforts, CMS held to the Jan. 1, 2018 implementation timeline for 2018 rates issued under PAMA, which would reduce lab test payments by $670 million — much steeper than previously projected cuts. 

"PAMA was issued in the context that CMS was spending too much on healthcare," Abrahams said. "Therefore, there was an impetus to use market-based pricing to bring down the prices of some diagnostic products creating winners and losers." Lab tests that fared best in market-based pricing were those that use a proprietary multi-analyte algorithm and are performed at a single lab. Older clinical chemistry tests saw the deepest cuts using CMS' market-based pricing methodology. 

In response to CMS' unwillingness to delay implementation, ACLA sued the government payor. The lab group has asked the US federal district court in Washington, DC, to stop HHS from implementing PAMA and halt newly issued lab test prices from going into effect in January. "We have a multi-pronged, all branches of government strategy on reform of PAMA," ACLA President Julie Khani said, noting that if the court doesn't act in time, Congress might provide some relief. "We're working very closely with the [congressional] committees with jurisdiction, as well as champions on the hill, to delay or mitigate those drastic cuts," she said. 

ACLA, the diagnostic manufacturers group AdvaMedDx, and PMC have been advocating for value-based pricing for diagnostics, particularly because they play a critical role in personalizing treatments. "Especially in the context of pharmaceutical pricing, we generally don't appreciate the value of diagnostics," Abrahams said. "We want to see more winners than losers, and right now, that balance is a little out of whack."

At least among the pharmaceutical industry, Diaceutics is seeing greater appreciation for the value diagnostics add to therapeutic assets. The firm estimated that pharm will spend 30 percent to 50 percent more on test commercialization this year compared to 2017. This projected spending increase is not only based on the greater number of drug/diagnostic combination products slated to come to market this year, but Diaceutics believes there is also growing awareness among pharmas that investing in diagnostics benefits drug revenues. In 2017, for every dollar drugmakers spent on test commercialization in the first year of a drug's launch, the return was $33, according to Diaceutics.  

Now that [ACA repeal] seems to be behind us, we can make more inroads.

Into 2018

Before 2017, the big worry for the lab community was that FDA would extend regulatory oversight of LDTs. ACLA in particular had pushed back strongly against an FDA-issued draft framework that it felt would be overly burdensome to labs. So, it pleased ACLA to hear that the new FDA commissioner felt it was up to Congress to advance a new regulatory framework for LDTs.

"We're committed to working with Congress, the administration, and other stakeholders in advancing comprehensive reform of the LDT regulatory framework [and] it's a priority for ACLA," Khani said, noting that the ideas in a draft legislation advanced in 2017 by Representative Larry Bucshon (R-IN) and Diana DeGette (D-CO) are a good starting point. 

PMC this year will continue to raise awareness of personalized medicine among legislators, and is convening a bipartisan congressional caucus on personalized medicine as a resource for legislators. "It's a platform from which we can make available to members of Congress all the developments taking place," Abrahams said.

Republican efforts to do away with the ACA left little bandwidth for much else in healthcare policy during 2017. "Repeal and replace was so traumatic, it drained most of the oxygen out of the room," Abrahams said. "Now that that seems to be behind us, we can make more inroads."