The story of personalized medicine has evolved from folklore to popular science, and is destined to become classic medical literature.

I have written extensively about new precision cancer therapies based on the science of immunology, and the people, organizations and companies behind them. But there is another player that until now has remained largely in the background of the story: the companion diagnostic.

Companion diagnostics, by the FDA’s definition, are in vitro devices or imaging tools that provide essential information for the safe and effective use of a corresponding therapeutic product.

Known by their nickname CDx, companion diagnostics can provide information that tells us if we are genetically predisposed to certain difficult-to-diagnose conditions. They can predict the future course of a disease in a given patient. They can tell doctors how to appropriately dose a medication for each patient, and let them know if a patient is responding to a therapy that’s been prescribed. They also can analyze risk of a disease recurring after a course of treatment is complete.

In short, the diagnostics are guides that treating physicians can rely on for improved and more timely patient outcomes, which is why we call them companions.

Stratification—the tailoring of medical treatment to the individual characteristics of each patient—is the main business goal of personalized medicine. It enables pharmaceutical companies to create niches out of larger patient populations by focusing on extreme unmet needs where they can demonstrate more value, and in turn command higher prices. Stratification is what CDx helps to accomplish.

The role of companion diagnostics in the clinical development of personalized medicine is so central, in fact, that new advances in precision therapies can’t really happen without them. Nearly 50% of all deals between drug developers and diagnostic companies are for discovery efforts. The other half are for diagnostics developed during clinical trials or after a drug already has come to market.

This scenario puts CDx squarely at the forefront of healthcare. Driven by advances in genomics, computational biology, medical imaging, diagnostic technologies, and translational medicine, the CDx industry likely will see significant shifts in power in the near future. Large, established players in the diagnostics space, such as Roche, Siemens, Abbott and Novartis, compete with smaller, focused companies like Hologic, Qiagen, bioMerieux and Cepheid that are shaking things up. The combination of size, agility, experience and innovation is creating a dynamic marketplace.

CDx may have been the unsung hero in the story of advancing patient care, but that is quickly changing. Currently, there are about 135 ongoing clinical trials that include a companion diagnostic, most of them in oncology and rare diseases. There is a clear need for CDx in other diseases, as the promise of personalized medicine is to move the prescription of all drugs from trial and error to certainty, safety and efficiency. That represents an enormous opportunity for diagnostics companies and drugmakers alike.

With opportunities, however, come challenges. Bringing biomarker-based therapies to market is a relatively new model that necessarily embraces added levels of complexity, which conventional practices are ill-equipped to handle. Simultaneous approval of a prescription therapy with a CDx comes with regulatory and reimbursement hurdles, not to mention organizational challenges when collaborating with a diagnostic partner.

In most countries, including the U.S., the use of a CDx with a prescription medication is legally required in the label of both the device and the therapy. But outside the U.S., reimbursement for CDx varies under national policies and universal insurance, forcing diagnostics and pharma companies to adapt to new access practices.

In France, for example, Pfizer has subsidized laboratories across the country to conduct testing related to its lung cancer therapy Xalkori because it cannot be prescribed without the test. Abbott Molecular, Pfizer’s CDx partner, provided training and materials to testing laboratories in that country.

Similarly, delays of up to several years in obtaining reimbursement from the national insurance program in Spain have forced pharmaceutical developers to pay for required testing for drugs before they can be prescribed.

Clinical developers must be nimble with regulatory processes in order to effectively drive development and registration of new drug-diagnostic combinations. But more importantly, navigating the new terrain requires companies to be innovative with clinical trial designs aimed at demonstrating value that can accelerate time to reimbursement for drugs and diagnostics alike. 

Matthew Howes is senior vice president, marketing innovation for PALIO, an inVentiv Health company. Email matthew.howes@inventivhealth.com.

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