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Following Merger, Express Scripts May Cut Back Medco's Personalized Medicine Programs


Originally published May 4.

Following the merger of two behemoths of the pharmacy-benefits management industry, Medco's leadership role in conducting clinical utility research for genomically guided personalized medicine will likely be scaled back to align with Express Script's more conservative view of the market.

Industry insiders told PGx Reporter this week that after closing its $29 billion acquisition of Medco in early April, Express Scripts is taking steps to revert the merged company's focus toward more traditional PBM activities and rein in — if not completely eliminate — the Medco Research Institute's clinical utility and cost-effectiveness research on pharmacogenetically guided treatments.

These projects had been led by Robert Epstein, chief medical officer of the Medco Research Institute. Medco confirmed this week that Epstein has left the company. His departure coincided with the finalization of Medco's merger with Express Scripts last month, industry insiders said. In addition, sources familiar with the companies said that many employees in Medco's personalized medicine group are looking to leave Express Scripts because they expect their projects to be scrapped.

"It is a true disappointment," Patrick Terry, head of the pricing, reimbursement, and market access practice at life sciences consulting firm Scientia Advisors, told PGx Reporter. "Medco's [personalized medicine] programs were a novel and powerful delivery model to bring meaningful benefits to millions of patients through applied genetics. It’s a shame it will cease to exist after the merger is complete.

"This is a blow to realizing the early medical and quality benefits to be derived from the clinical application of human genome sciences," Terry added.

PGx Pioneer

Of the big three PBM players — Medco, Express Scripts, and CVS Caremark — Medco had the most extensive set of programs dedicated to exploring how molecular diagnostics can help personalize treatments and yield healthcare savings, while Express Scripts was the only one with no such effort.

With leadership from Epstein and Felix Frueh, formerly president of the Medco Research Institute and the associate director for genomics at the US Food and Drug Administration, Medco was the first PBM to enter the personalized medicine space. Its pace of research and level of investment in personalized medicine programs clearly placed it in a position to be an innovative and disruptive force in the market.

As early as 2006, Medco launched efforts with the Mayo Clinic to investigate whether testing patients for certain genetic markers before giving them the highly variable anticoagulant warfarin improved their outcomes and lowered costs by avoiding adverse reactions and hospitalizations.

Then, Medco launched the Genetics in Generics program, aiming to drive evidence-based utilization of generic drugs in instances where validated genetic tests showed that patients might respond better to a generic than they would to a brand name treatment (PGx Reporter 10/7/2009). As part of this effort, Medco conducted an observational trial to identify which patients might benefit from the antiplatelet drug Plavix with the help of a genetic test and compare their outcomes to patients prescribed the newer drug Effient. Plavix is slated to lose patent protection this year.

Over the years, Medco has inked numerous collaborations with molecular diagnostics firms to conduct studies that seek to establish whether genetic tests can lead to better treatment options. For example, Medco partnered with Celera to study whether KIF6 testing improved patients' adherence to statins and with AssureRx to investigate whether by personalizing psychiatric drugs with the help of the multi-marker genetic test patients will comply with their prescriptions. Even the FDA signed on with the PBM to use pharmacogenomic strategies to assess the safety and efficacy of currently marketed and investigational drugs (PGx Reporter 3/28/2012; 3/10/2010; 8/20/2008).

Citing personalized medicine as one of its key growth strategies for the coming years, Medco two years ago acquired the genetic education and decision support provider DNA Direct to help implement its personalized medicine programs (PGx Reporter 2/3/2010).

The PBM's strong belief that genomics and individualized medicine would be a critical part of future healthcare led to a $5 million commitment to open a new school of pharmacy at New Jersey-based Fairleigh Dickinson University. The school, which will focus heavily on educating pharmacists about personalized medicine, was slated to open its doors this fall (PGx Reporter 2/9/2011).

Uncertain Future

According to an Express Scripts spokesperson, since the two companies are still very much in the early phases of melding their businesses, no decision has yet been made on where Medco's personalized medicine projects stand.

"With the merger announcement just a couple weeks behind us, we are still in the initial phase of combining, aligning, and maximizing our overall research efforts so that we are positioned to provide the most value to clients and the most advanced care to patients," the spokesperson told PGx Reporter.

"All clinical research studies and pilot programs for both legacy organizations remain intact in the immediate term. Once the two companies are more fully integrated, we will make additional decisions about which existing studies will be maintained and what new studies will be launched," the spokesperson added.

Meanwhile, those with knowledge of what's going on inside these companies say that the fallout from the merger is certainly being felt by Medco employees, many of whom have been demoted, offered pay cuts, asked to relocate to Express Scripts' headquarters in St. Louis, Mo., and asked to sign non-compete agreements. Specifically, many employees in the personalized medicine unit are looking to leave because they fear their projects will be cut, sources said.

While this kind of restructuring is happening throughout Medco, "in the personalized medicine arena, there's the added uncertainty of Express Scripts' commitment or even interest. The people in this unit certainly suspected that before the deal closed, and it has only been confirmed since then," said a PBM industry insider who asked not to be identified because he was not authorized to speak on the record.

Most worrying for personalized medicine supporters, perhaps, is Epstein's departure. A Medco spokesperson confirmed that Frueh is providing research leadership in Epstein's absence, serving in a vice president role for the merged company, which is not the same title he held as president of the Medco Research Institute.

The Express Scripts spokesperson maintained that contrary to the assertions by sources PGx Reporter spoke to, the firm has "had no demotions, pay cuts, or transfers in [the personalized medicine] organization. In fact, everything has been held steady."

Although the extent to which Express Scripts plans to cut back personalized medicine efforts in the newly combined entity is currently unknown, when the merger was first proposed last year, Express Scripts said that by joining with Medco it could save more than $1 billion by cutting costs. As such, it isn't unreasonable to suspect that some of these projected savings could come from nixing programs that don't fall within its growth strategy.

In addition, there were early signs that Medco's forward-thinking efforts around genetic testing and pharmacogenomics would not align with Express Scripts' more conservative strategic outlook. "Express Scripts has never been known as 'innovative,'" the PBM industry insider said via e-mail. "They are a very good and well-run company that has succeeded by a stick-to-the-knitting type of approach, which traditionally hasn't involved leading-edge projects or business models."

Previous comments from Express Scripts executives have highlighted areas of disagreement when it comes to assessing the clinical value of certain genetic interventions. For example, while Medco has been a vocal supporter of PGx testing to more accurately dose warfarin, Express Scripts believes the utility of this particular genetic intervention as unproven (PGx Reporter 7/27/2011).

Before the merger, Medco was offering PGx testing services through its Precision Health Solutions division to more than 300 clients, around one-third of its covered members. Through this service, Medco offered clients a number of PGx tests, including those for Plavix (Sanofi-Aventis/Bristol-Myers Squibb); the leukemia drugs Gleevec (Novartis), Sprycel (BMS), and Tasigna (Novartis); and the HIV treatments Selzentry (Pfizer) and Ziagen (GlaxoSmithKline), as well as for tamoxifen and warfarin.

In comparison, in the 2011 Drug Trend Report issued by Express Scripts last month, the company highlighted several drugs for which it recommends genetic testing and those treatments for which it doesn't. The drugs listed by Express Scripts highlight the company's more conservative approach to personalized medicine and suggest that it may not be interested in jumping into the kind of risks Medco was willing to take by conducting real-world clinical utility research for tests that lacked such evidence.

express.jpgFor example, all of the drugs recommended by the company have FDA-approved labels indicating that they should only be given in a genetically defined patient population (See table for details). Meanwhile, Express Scripts found that some drugs lacked evidence that genetic testing was needed to identify best responders, including the oncologics Camptosar (Pfizer), Elitek (Sanofi), tamoxifen, Tarceva (Roche/Genentech); the blood clotting agents Plavix and warfarin; and the seizure medications carbamazepine and valporic acid. While the labels of many of these drugs discuss how genetics might impact patient response, the FDA doesn't require physicians to perform genetic testing in order to prescribe these treatments.

The field of pharmacogenomics "holds great promise, but it also comes with associated costs and many unanswered questions," Express Scripts said in the Drug Trend Report.

"The gene-drug relationship is highly complicated and, as with most medical technologies, each test must be evaluated carefully – test by test, indication by indication – to determine, first, whether the drug offers a net benefit and, if so, for which patients and at what cost. Although some genetic tests have passed careful, evidence-based evaluations, many have not," the company stated in its report, adding that the clinical evidence showing that PGx interventions lead to better health outcomes "is sparse (or even negative) for many … tests."

The company recommends that its clients manage their utilization of pharmacogenomic testing through prior authorization schemes, as well as through its own services, such as ExpressAlliance, a tool for sharing medical usage information with health management vendors, plans, and wellness companies.

A great deal of Express Scripts' Drug Trend Report is dedicated to describing tools and strategies for controlling unnecessary healthcare spending and reducing adverse reactions by making sure patients are adherent to their medications. In 2011, the company estimated that US consumers' "suboptimal pharmacy-related behavior" wasted more than $408 billion.

Medco recently presented data from an adherence study showing that when patients have knowledge of their genetic risk for potential cardiac events they are more likely to comply with their statin prescriptions. As such, new and legacy Medco projects that seek to impact patient behavior with genetic information may align most readily with Express Scripts' business focus.

Brian Seiz, VP of clinical services at Express Scripts, previously said during a conference presentation that as the company starts "to look at personalized medicine, we can … apply key behavioral sciences principles to drive waste [reduction] while improving patient outcomes."