Personalized medicine is causing a tectonic shift in how medicine is practiced, regulated and reimbursed, according to speakers at Monday’s plenary luncheon at Biotech Showcase™ 2011 in San Francisco

One of the greatest shifts emanating from personalized medicine and associated companion diagnostics is the need for greater clarity in regulations. The industry lacks broad understanding of what the FDA is seeking, according to Mara Aspinall, CEO of On-Q-Ity. So, she continued, “There has been a very uneven level of evidentiary information available for diagnostics.” To remedy that situation, she called for regulatory guidance regarding the type and amount of information needed, adding, “We need to aggressively collaborate at all levels.” That includes publishing papers more vigorously to help develop a body of data.

One of the greatest shifts emanating from personalized medicine and associated companion diagnostics is the need for greater clarity in regulations. The industry lacks broad understanding of what the FDA is seeking, according to Mara Aspinall, CEO of On-Q-Ity. So, she continued, “There has been a very uneven level of evidentiary information available for diagnostics.” To remedy that situation, she called for regulatory guidance regarding the type and amount of information needed, adding, “We need to aggressively collaborate at all levels.” That includes publishing papers more vigorously to help develop a body of data.

More is needed, however. “We should change the regulatory environment fundamentally,” Aspinall said. As part of that, Aspinall cited a bill being introduced in Congress to create a Center for Advanced Diagnostics Evaluation and Research (CADER) that is similar in scope to the Center for Biologics Evaluation and Research that was spun out of Center for Drug Evaluation and Research some years ago.

“The goal of CADER would be to develop a regulatory pathway that is segmented to accommodate diagnostics for high risk populations, to determine therapeutic efficacy or predictive efficacy, and to develop more tightly targeted drugs,” said Stephen Dunn, President and Senior Managing Director of Research, LifeTech Capital because “they all require different standards.” He expressed concern the FDA may not take that into consideration, based upon its delay in accepting the K-ras mutation as an indicator for EGFR inhibitor drugs. Along the way, the dual FDA and CLIA regulatory tracks for diagnostics also must be harmonized, added David Levinson, President and CEO of CardioDx. “Many of the rules are 180 degrees different.”

The reimbursement issue also needs greater clarity, panelists agreed, because there is no certainty that payers will reimburse for approved diagnostics. Medications, in contrast, do not have that ambiguity. “A legislative bill providing that clarity is expected to be introduced later this year,” Aspinall said. “Improving the reimbursement situation also requires updating the coding system so that breakthrough diagnostics are no longer forced to base their reimbursement upon finding a similar product from a fee schedule developed in 1984,” explained moderator Susan Reardon, Director, Medical Devices and Diagnostics, Government Affairs and Policy at Johnson & Johnson Services.

Ultimately, reimbursement depends upon efficacy. “To change physician behavior, that evidence must be very strong,” emphasized Levinson. That evidence must also be communicated to payers. Medco Research does this by partnering directly with third party payers rather than academic institutions.

Levinson said the practice is more cost effective than working with academic institutions, serves a broader geographic patient base and helps the company understand how the medication or diagnostic performs in the real world. “Academic outcomes don’t always transfer to the real world. They have a very different perspective on the delivery of medicine,” he added.

Where personalized medicine will be in five years is impossible to predict. But Bryan Dechairo, Senior Director of Personalized Medicine Research and Development at Medco Research sees opportunity for diagnostics in the enormous numbers of drugs coming off patent. “Using a diagnostic to increase the efficacy of one drug by five percent is the equivalent of a blockbuster drug,” he says. “There will be an aggressive evolution and molecular diagnostics will change the way physicians think.”