Developing drugs and companion diagnostics

The development of companion drugs and diagnostics has the potential to improve treatment outcomes, enhance patient compliance with prescriptions and eliminate the need for insurers to pay for expensive but ineffective therapies. And the available information on biomarkers that indicate whether a therapy could work on a particular individual continues to grow rapidly. So why is it so difficult to develop drugs and companion diagnostics? A life sciences lawyer from K&L Gates and two seasoned biotech executives hashed that out this afternoon with a packed audience for the session called "Last Year’s Clothes Just Don’t Fit Anymore: New Approaches to Product Development Collaborations Between Drug and Diagnostic Companies". They propose that the regulatory, reimbursement and physician adoption of the Dx/Rx combinations could and should improve by updating the regulatory pathway for the diagnostics and implementing payment incentives based on efficacy. “Biomarkers are here to stay,” said Mara Aspinall, CEO of VivirHealth in Boston. The number of validated biomarkers has made tremendous movement in the past five years, Aspinall said. But biomarkers won’t be used to make companion Dx/Rx unless companies see that there is a business model for them, she said. She pointed to a number of Dx/Rx collaborations that have been implemented over the last decade, some of which worked and some not so much. Despite the mixed success, the FDA and even drug development companies that many might expect to be opposed to the combination products, note that they could increase patient compliance, which in turn would raise market share. Eileen Ewing, a partner at K&L Gates, said diagnostics maker TheraScreen , which has an screen for colorectal cancer cells that detects a mutation in the KRAS gene, is a frustrating example of how opportunities for effective Rx/Dx combinations is being missed. The TheraScreen test has been used successfully in determining who would benefit from the drug herbitux. But the FDA has not approved it as an Rx/Dx, she said, despite the American Society of Clinical Oncology endorsing its use and European approval and adoption of the combination. As a result, home brew diagnostics created by labs around the US, which don’t need regulatory approval, are reducing the available market for the product into which TheraScreen has already invested lots of money, she said. Payors are definitely recognizing the benefit, Aspinall said. In the United Kingdom, biomarkers in the blood and urine are being used to determine the efficacy of Velcade given to patients with multiple myeloma, she said. If the patient has a complete response, or even a 50 percent response, there’s reimbursement, she said. There is not payment if the drug has a minor effect, but there is a refund, she said. While there are signs that similar reimbursement scenarios may be creeping into the US, there are several business reasons why it is not happening more, she said. For instance, diagnostics require few patents and have a five year development cycle, while therapeutics require many patents and have a 15 year development cycle. Diagnostics have a 20 percent margin and regulated pricing, while therapeutics have 75 percent margins and no pricing regulations. Finding where the two products have an overlap is key to developing these collaborations between different companies, or different units within one company, said Bob Goodenow, Chief Business Officer at Syndax Pharmaceuticals. While there are many promising therapeutics on the market, they are only successfully getting to the patients on which they are effective about 50 percent of the time, she said. Can we get those numbers up to 80 percent, she asked. Former FDA Commissioner Mark McClellan once suggested that the FDA’s approval criteria should be more stringent, requiring a drug to be 80 percent effective to win approval. But that would be unfair to the patients who could benefit when the efficacy is below that rate, Aspinall said. However, adverse drug events are very costly to the industry and the single largest cause of a drugs withdrawal from the market, she said. In addition to adopting new reimbursement schemes such as the one used in the UK, Aspinall suggests the FDA create a Center for Diagnostics to review the products for market. Currently they are approved by the Center for Devices, although that creates and apples and orange comparison, she said.

--By Terri Somers, BIOCOM

Terri Somers if the new Director of Communications at BIOCOM, the biotech industry trade group in Southern California. Previously Terri covered the biotechnology industry for six years at the San Diego-Union Tribune.