Personalized Medicine 2018: More Drugs, Greater NGS Adoption, Growing Appreciation of Dx Value

NEW YORK (GenomeWeb) – In 2018 a record number of new personalized therapies entered the market, there was greater adoption by oncologists of cancer diagnostics, including next-generation sequencing panels, and new regulatory and reimbursement policies emerged that recognize the importance of molecular tests to individualizing care.

The US Food and Drug Administration was particularly active during the year, approving more personalized therapies compared to prior years, including another tissue-agnostic cancer drug, Loxo Oncology's Vitrakvi (larotrectinib). The agency also released a slew of guidances in an effort to ease regulatory burdens for diagnostics sponsors, and somewhat controversially, pushed ahead a new regulatory framework for diagnostics into draft legislation.

Drugmakers continued to utilize omics technologies to gain insights in to who will respond best to investigational therapies and support the development of companion tests to identify the population eligible for marketed treatments. Pharma's increasing interest in mining real-world, molecular data for drug development was also evident as demonstrated by Roche's acquisition of the health technology company Flatiron for $1.9 billion and the decision to purchase its remaining shares in the cancer sequencing firm Foundation Medicine for $2.4 billion — which, according to GenomeWeb's analysis, were the highest valued diagnostics deals this year.

"2018 saw next-generation sequencing come of age in the US," said Steve Vitale, managing director of the marketing team at test commercialization firm Diaceutics. "With the advent of [tissue-agnostic] drugs like Vitrakvi, it behooves us to think about the merits of genomic profiling for all patients."

Certainly, access to NGS testing for cancer patients opened up this year with the Centers for Medicare & Medicaid Services' final national coverage determination (NCD) on tumor profiling tests. On the other hand, the lab industry continued to bemoan the pricing pressures from the Protecting Access to Medicare Act, and throughout the year, the American Clinical Laboratory Association pushed for changes to the way CMS implemented the new law within the courts.

While continued payment pressures resulted in some labs scaling back services, larger reference labs seemed to benefit from hospitals outsourcing their outreach lab services following implementation of PAMA. Expansion in the genetic testing industry continued with approximately 14 new tests entering the market daily, according to one estimate. The National Institutes of Health also started to recruit participants for the All of Us Research Program and advanced a plan for sequencing and returning results to 1 million potential participants.

The year saw notable growth in consumer genomics offerings. One way consumer genomics companies are expanding is through collaborations with researchers conducting large population health studies. Within the Healthy Nevada Project, for example, investigators partnered with Helix to gain access to exome sequencing data for research and incentivize participation by giving free access to genomic insights consumers are interested in, such as ancestry testing.

The FDA also authorized 23andMe's limited BRCA variant test for gauging breast and ovarian cancer risk and its pharmacogenetic tests for direct-to-consumer online sales, but cautioned consumers that these tests shouldn't be used to make treatment decisions. Given this caveat, healthcare providers and genetic counselors questioned the utility of providing these tests DTC, as well as the FDA's decision to allow their sale (see here and here). At the same time, increased consumer access to genetic information is forcing the healthcare system to adapt, with the launch of genetic testing clinics aimed at supporting those who want to further explore their DTC test results with healthcare professionals, confirmatory testing programs, and technologically enhanced genetic counseling services.

Toward greater personalization

By GenomeWeb's count, the FDA approved 25 molecularly targeted indications in 2018 — 10 new molecular entities and 15 expanded indications of previously approved products — compared to 19 approvals in 2017 (see charts below article; larger versions here and here).

The Personalized Medicine Coalition also noted continued growth in the field during the year. "Our preliminary analysis shows that [personalized therapies comprise] about one quarter of a record number of drugs approved this year," said PMC President Ed Abrahams. "That's the fourth year in a row we're seeing a significant trend in the development of personalized drugs."

Diaceutics has been tracking the extent to which drugmakers have been incorporating biomarkers and diagnostics into clinical trials — key to the development of personalized therapies — and supporting access to tests once these drugs hit the market. The company's internal analysis suggests that nearly 90 Phase III, diagnostic-dependent drug trials were completed in the US, EU, and Asia this year, compared to 22 in 2017. Next year, this number is expected to double.

"Others have previously flagged that 75 percent of oncology pipelines and 42 percent of general medicine pipelines as being built around biomarkers," said Diaceutics CEO Peter Keeling. "However, what really matters is the number of these therapies hitting the market."

The year also brought fresh examples of how personalized medicines are transforming the traditional drug development model. In 2018, GSK, which had been cautious in its embrace of personalized medicine in recent years, made major moves to re-enter the space. With pharma veteran Hal Barron as its new head of R&D, GSK made a $300 million equity investment into 23andMe to gain access to its genotype-phenotype database. GSK also purchased Tesaro with an eye toward using genomic tools to advance new personalized indications for cancer drugs, such as the PARP inhibitor Zejula (niraparib).

Although patients now have more personalized treatment options available to them than ever before, once these drugs hit the market, it has been an ongoing challenge to ensure that patients are getting biomarker testing to determine whether they are eligible for therapy. Diaceutics in 2017 had reported that due to issues hindering timely testing of 13 standard-of-care, cancer-linked biomarkers, around 78,000 cancer patients per year weren't receiving personalized, targeted treatments.

Test access is showing signs of improving, more recent data show, with more than 51 percent of patients with non-small cell lung cancer (for which there are now multiple molecularly-targeted drugs) receiving NGS testing in 2018. "The Medicare NCD for NGS is no doubt going to help boost this further," said Vitale.

At the same time, the use of immunotherapies has continued to climb and with it, in August, PD-L1 expression testing surpassed EGFR testing as the most frequently tested biomarker in NSCLC, with 81 percent of patients tested for PD-L1 expression versus 78 percent for EGFR mutations.

However, Keeling said that there is still much work to do to create an efficient testing pathway that will facilitate personalized medicine access for all patients. For example, the FDA updated the labels of two immunotherapies, Keytruda (pembrolizumab) and Tecentriq (atezolizumab), to note that patients with metastatic bladder cancer and low PD-L1 expression shouldn't be given these agents due to the greater risk of death in this subpopulation. Yet, Diaceutics' data shows that while 80 percent of oncologists are testing for PD-L1 expression status in patients, less than 20 percent of urologists are testing for this biomarker.

These are the types of access issues pharma should anticipate and mitigate by supporting the availability to multiple, standardized testing options before FDA has to take action, Keeling said.

Spotlight on diagnostics

Charles Mathews, a principal at consulting firm ClearView Healthcare Partners spent the majority of the year speaking to industry clients about the CMS' NCD on next-generation sequencing cancer panels. "It represents a seismic shift in the way large sequencing panels are paid for," he said.  

The final NCD raised concerns about the extent to which CMS' policy would allow coverage not just for FDA-approved companion diagnostic indications for these tests, but also for investigational biomarkers on the panels increasing scientifically unproven off-label treatments. Toward the end of the year, CMS released the first of several transmittals that shed more light on the coding aspects of this policy. For now, CMS' coding instructions and the list of ICD-9 diagnosis codes suggest broad coverage for FoundationOne CDx, beyond the CDx indications. Whether commercial payors will follow Medicare's lead remains to be seen.

Meanwhile, the approval of tissue-agnostic drugs, such as Vitrakvi, will also force payors to think differently about how they're paying for diagnostics. Payors are used to thinking about testing in the context of a specific kind of cancer and drug, and "it's a real head scratcher" for them to figure out policies for pan-cancer indications, Mathews observed. "What's exciting is the FDA has gotten out ahead on some of these things and is putting pressure on the reimbursement system to say, 'Okay, how are you going to accommodate this?'"

Indeed this was a busy year at the FDA in terms of its actions to advance and support personalized medicine. For example, the FDA finalized guidelines on the development of tissue-agnostic therapies, and a draft guidance on class labeling for companion diagnostics. The agency also finalized a guidance on how diagnostic sponsors can use information in FDA-recognized public variant repositories to support the claimed relationships between disease and the variants their tests gauge. Subsequently, the agency also recognized expert-classified variants from the NIH-supported Clinical Genome Resource consortium for this purpose, which can be accessed in the NCBI-supported ClinVar database.

In order to achieve this first-of-its-kind variant database recognition, the investigators had to document and submit for review data curation procedures; the training, proficiency, and conflicts of interest of expert curators; and the publicly accessible location of evidence used to classify variants. The initial FDA recognition is for variant classifications from a handful ClinGen expert panels related to hereditary conditions, such as cardiomyopathy, hearing loss, and inborn errors of metabolism. However, because the FDA has reviewed and approved ClinGen's variant classification processes and expert panel procedures, subsequent expert panels can follow those standard procedures to classify variants and release them in the database as having FDA recognition, without needing to go back through the agency.

Heidi Rehm, ClinGen principal investigator and chief genomics officer at Massachusetts General Hospital's Center for Genomic Medicine, hopes that FDA recognition of the database will ease the development path for companion diagnostics and genetic tests for population health screening tests.

"All of these developments put diagnostic testing at the center of the conversation," agreed Keeling. Although traditionally, in drug/diagnostics codevelopment projects the development of the drug always got more attention, recent FDA policies have put a spotlight on the importance of biomarkers, diagnostics, and the testing ecosystem, he reflected.   

Of course, key stakeholders in the testing community remain staunchly opposed to any FDA regulation of the lab space. And industry players were relieved to hear FDA Commissioner Scott Gottlieb say at various conferences this year that the contentious issue of diagnostics regulation — including oversight of tests developed by laboratories and traditionally overseen by CMS under lab regulations known as the Clinical Laboratory Improvement Amendments — is an issue for Congress to solve. That pleased labs and test developers that had crafted a draft bill and had been working with legislators to advance a version, called the Diagnostics Accuracy and Innovation Act (DAIA), that could be introduced in Congress.

What most stakeholders perhaps didn't anticipate is that when Gottlieb said that diagnostic regulation should be addressed through legislation how heavily his agency wanted to influence the bill. Industry players were surprised when the FDA provided technical assistance on DAIA comprising entirely new bill language that departed heavily from the industry's ideas and made the agency's authority to regulate all diagnostics explicit.

Legislators incorporated the agency's suggestions into a new draft bill this month, called the Verifying Accurate, Leading-edge IVCT Development (VALID) Act, and have indicated their desire to advance it 2019. However, given industry stakeholders' historic disfavor for FDA oversight of lab processes, the agency's version of the bill is sure to be controversial.

Despite the lab industry's aversion to the agency’s oversight, the rate of companion tests that are FDA-approved diagnostics increased this year. In 2017, 78 percent of CDx tests were performed as lab tests without FDA approval. By comparison, this year, non-FDA approved, lab-developed CDx comprised 67 percent of such analysis, according to Diaceutics' data. Vitale believes this reduction is due to greater uptake of FDA-approved PD-L1 expression tests, and insurers' prior authorization policies and preference for FDA-reviewed products.

Regardless of how the matter of lab test regulation is resolved, most stakeholders agree that the regulatory uncertainty that's been hanging over the diagnostics industry for years isn't beneficial for investment and innovation in the space. However, the FDA's recent hires suggest that it is very much focused on modernizing its own policies for a future where more patients have access to personalized medicine and advanced diagnostics.

Following the departure of Alberto Gutierrez last year, the agency hired Timothy Stenzel as the new director of the Office of In Vitro Diagnostics and Radiological Health within FDA's device division. Stenzel was formerly the COO at Invivoscribe, a company that has partnered with several drugmakers to develop companion tests and NGS diagnostics in oncology.

But perhaps the most most talked about new hire for the FDA was Flatiron's real-world data expert Amy Abernethy as principal deputy commissioner. Before Abernethy decided to join the FDA, the agency had already worked with the health technology firm to explore the use of real-world data to gather evidence on the safety and efficacy of cancer treatments. Bringing Abernethy into the FDA is another win for personalized medicine, according to PMC's Abrahams, who said in a statement that "she will be a great asset to an agency that is already committed to that vision."

Raising awareness in 2019

Despite the advancements in the field, Abrahams flagged two proposals during the year — CMS' decision to allow Medicare advantage plans to apply step therapy to physician-administered and Part B drugs and the proposal to peg Part B drug payment to the international pricing index — that he felt "fly in the face of personalized medicine."

Step therapy is a form of prior authorization that gets beneficiaries on the most cost-effective drug for a condition first, for example a generic or biosimilar, before trying a pricier, branded therapy. Personalized medicines tend to be expensive, but there is data suggesting they can improve outcomes and lower costs by avoiding unnecessary procedures and adverse events from more toxic treatments. The effort to allow step therapy is "very disheartening," Abrahams said, "because there are many other ways to improve the efficiency of the system and recognize the science of individual variation [in drug response]."

The international price index proposal seeks to test out Medicare payment for certain Part B drugs pegged to international prices rather than basing it on drugmakers' average sales price plus a 4.3 percent add-on payment, as is currently done. Abrahams felt this policy, if adopted, would discourage investment in higher cost Medicare Part B drugs, which is the category most of the personalized cancer therapies fall into.

"These two things suggest that we have our work cut out for us in educating policymakers both in and outside of the government about the principles of personalized medicine," he said. "I'm not suggesting that the most effective drug should be the most expensive, and in many cases it won't be. But clearly we need a greater emphasis on diagnostics and understanding how they can and should be integrated into the medical equation."

In an effort to better educate policymakers, in 2019, the PMC will release evidence reports on the impact of personalized medicines on outcomes and costs. "The PMC realizes that we can't just advocate for particular positions," Abrahams said. "Without an understanding of what personalized medicine is, advancement in the field is going to be rate-limited."

Rehm will spend more time next year raising awareness among doctors, hospitals, and payors about the work ClinGen has been doing. For example, ClinGen last year published a list of labs that meet certain data-sharing requirements, such as submitting to the ClinVar database at least once a year. Labs can also get "badges" for additional activities, such as working with other labs to resolve variant classification conflicts.

The list has grown to feature 17 genetic test providers, including large reference labs, such as Quest and Laboratory Corporation of America. However, there isn't broad awareness among all providers and payors about the lab list and how data sharing improves the quality of testing.

"Although the major laboratories are sharing data, there are others who are not," said Rehm, who will take time next year to inform providers and payors about how to implement use of the lab list. "Having seen anecdotal reports from laboratories that are not sharing data, I firmly believe there is a significant quality difference in what's coming from the labs who do have that transparency and those that don't."

This year, GenomeWeb partnered with the PMC on a survey that showed that the public's awareness of personalized medicine advances is also limited and not improving compared to prior years. In 2019, Diaceutics will turn its attention to raising awareness among cancer patient advocacy organizations about personalized medicine and the important role of diagnostics.

"All of us in the personalized medicine community have a responsibility to understand how we can help patients ask for the right tests," said Keeling. "It's complex … but that does not mean we should ignore the inevitable fact that ultimately the patient will drive precision medicine."