With the recent passage of the Genetic Information Nondiscrimination Act in the House of Representatives by a vote of 414 to 1—following on the heels of the unanimous Senate vote approving the legislation—CLP was spurred to ask a handful of companies involved in personalized medicine for a status report. We spoke with Vijay Aggarwal, president and CEO of Aureon Laboratories, Yonkers, NY; Patrick Balthrop, CEO of Luminex Corp, Austin, Tex; Michael McGarrity, VP of sales and marketing/chief marketing officer of Nanosphere Inc, Northbrook, Ill; Dave Craford, VP, commercial operations, at Pathwork Diagnostics Inc, Sunnyvale, Calif; and Sean McDonald, CEO of Precision Diagnostics Inc, Pittsburgh.

Left to right: Dave Craford, VP, commercial operations, at Pathwork Diagnostics Inc, Sunnyvale, Calif; Patrick Balthrop, CEO of Luminex Corp, Austin, Tex; Vijay Aggarwal, president and CEO of Aureon Laboratories, Yonkers, NY; Michael McGarrity, VP of sales and marketing/chief marketing officer of Nanosphere Inc, Northbrook, Ill.

Q: What are your company’s primary products in the personalized medicine space?

Craford: Our first test, the Pathwork® Tissue of Origin Test, is a gene-expression test to aid in diagnosing hard-to-identify tumors. After all, the first step in applying personalized medicine in oncology is knowing what kind of cancer the patient has. Tumors of uncertain origin are a major clinical problem, with an estimated 200,000 cases in the United States each year. The Pathwork Tissue of Origin Test measures the expression of more than 1,500 genes to compare a tumor’s gene-expression profile to those of 15 known tissues representing more than 60 morphologies, and provides a report with an objective, probability-based score for each potential tissue. This information helps clinicians rule in and rule out potential tissue types. Our test uses a proprietary Pathchip® microarray and runs on the proven Affymetrix GeneChip® technology platform. The test is available as a service through our CLIA-certified laboratory, and is also currently under FDA review so that we can offer a diagnostic kit directly to clinical laboratories.

Balthrop: Luminex has three key assays in the pharmacogenomics space right now: 1) Cytochrome P450 2D6 or CYP450 2D6: The enzyme product of the P450-2D6 gene is involved in the oxidative metabolism of more than 100 drugs, including the breast cancer drug Tamoxifen. Enzyme activity varies from person to person, which affects how different people metabolize a drug. 2) CYP 2C19: The CYP2C family is responsible for metabolizing a variety of exogenous and endogenous substrates, and includes a variety of clinically significant drugs—about 20% of currently prescribed drugs. In particular, 2C19 is involved in the metabolism of many anticonvulsants, diazepam (Valium), omeprazole (Prilosec), and several of the tricyclic antidepressants, as well as proton pump inhibitors. 3) CYP 2C9 + VKORC1: CYP 2C9 is another member of the CYP2C family. The CYP 2C9 has a central role in metabolism of several medications with a narrow therapeutic index, such as Warfarin and phenytoin.

Aggarwal: Recently, Aureon Laboratories launched Prostate Px®+, a new prognostic test which will assist physicians to assess disease severity as they counsel newly diagnosed patients on possible treatment options. Prostate Px+ utilizes biopsy tissue at diagnosis to provide a unique perspective, enabling more-informed therapy decisions. The power of Prostate Px+ results from Aureon’s systems-pathology approach, which drives a comprehensive examination of the cancer tissue obtained from each patient. Clinical data is integrated with an exhaustive digital analysis of each patient’s cancer using spatial analysis of tissue histology and examining molecular biomarkers, such as androgen receptor, associated with disease progression.

McGarrity: Nanosphere’s first product in the personalized-medicine space is the first FDA-cleared genetic test for warfarin metabolism. Cleared in late 2007, the product is on the market and runs on the Verigene® system. The company will develop and market additional diagnostic tests to support personalized medicine as this segment of the industry continues to grow.

McDonald: Precision Therapeutics is committed to the research and development of products designed to accurately predict a patient’s response to cancer therapeutics. It is marketing its first proprietary product, ChemoFx, a unique drug-response marker that provides insight into which agents may be most effective for an individual patient by directly measuring tumor response to chemotherapy. This patented technology is performed on live-tissue or fluid samples sent to the CLIA-certified Precision Therapeutics laboratory in Pittsburgh. ChemoFx has been clinically validated for use in ovarian cancer; however, our laboratory has experience with over 30 different tumor types. Several clinical trials have confirmed the correlation between ChemoFx prediction and subsequent clinical response, including increased overall survival.

Q: What challenges does personalized medicine face? How will the industry tackle them?

McDonald: Reimbursement policies and clinical validation are the main obstacles. In the area of reimbursement, Precision works with payors to demonstrate the patient benefits and potential cost savings of the technology. In the area of clinical validation, Precision has a robust clinical-trials program with 1,200 patients studied to date, seven peer-reviewed published studies demonstrating the clinical utility of ChemoFx, and two additional peer-reviewed publications in development. Precision’s clinical data demonstrate a three-fold increase in progression-free survival when a physician treats with a drug regimen identified as responsive by ChemoFx versus when a physician treats with a drug regimen identified as nonresponsive. In addition, there are four other, ongoing, prospective trials in breast and ovarian cancer.

Aggarwal: There are two major obstacles. Reimbursement for innovation: personalized medicine requires the development of new and innovative approaches that could not be anticipated by payors and hence are not always covered by existing reimbursement. In each instance, this obstacle will be overcome by demonstrating the clinical value to the physician and patient, as well as the economic benefit to the payor. Economics: there must be economic justification to the pharmaceutical or biotechnology company to pursue a personalized-medicine approach. Limiting the market and denying reimbursement are two limitations that strangle innovation and development.

Craford: I would venture to say that personalized medicine is already here and its impact is growing. A classic example is HercepTest, which is linked to the prescription of Herceptin. At ASCO this year the big news was that KRAS status predicts response to Cetuximab for metastatic colorectal cancer. To accelerate the adoption of personalized medicine further, I believe three things must happen. First, companies must prove—through analytical and clinical validation studies—that their markers are statistically valid for giving information on a particular disease state. Second, they must prove that this information is useful for clinical decision-making. And third, companies must make a strong case that their tests can improve patient care while being cost-effective.

Balthrop: First, there is the issue of ever-evolving scientific discovery. We have made tremendous strides in determining which genetic and protein markers indicate certain diseases, but we have really only scratched the surface of all there is to know. Second, there is the issue of proof—does personalized medicine offer a tangible clinical and cost benefit? Although the concept of personalized medicine has been around for many years, we are, in many ways, in the early stages now of being able to prove that personalized medicine offers significant health and cost benefits to patients, health care providers, and insurers. We, as an industry—and I include pharmaceutical companies in this—have to produce the clinical data that shows that personalized medicine can improve health outcomes and help reduce health care costs. This is a classic health care challenge. There was a time, after all, when doctors and insurers were not sure that monitoring a diabetic’s blood glucose was an effective use of time and resources. Today, monitoring blood glucose is a standard procedure. History has shown that if the clinical- and health care-economics data is powerful, physicians and regulatory and reimbursement authorities will respond.

McGarrity: As with most new advances in medicine, it takes evidence and education to drive broad adoption. Payors will not approve new technology without first understanding the value proposition. Evidence in the form of clinical data will support such analyses, and education of the market as to how to most safely and effectively implement new approaches will facilitate adoption.

Q: Are you joining forces with other companies? Can you name them?

McDonald: Precision’s clinical-trials team works with a number of top research groups and academic institutions, including the NSABP, US Oncology, and Yale University and the DOD.

Craford: Our Pathwork Tissue of Origin Test runs on the proven Affymetrix GeneChip technology platform, and they have been a strong technology partner. We are actively seeking collaborations that fit well with our focus of commercializing complex genomics-based diagnostics for oncology.

Balthrop: In addition to our own R&D efforts, Luminex has many strategic partners throughout life sciences and clinical diagnostics, a number of whom are engaged in some aspect of personalized medicine. Given the flexibility of our xMAP Technology, we expect to partner with additional market leaders working in the personalized medicine field in the future.

Q: What impact do you expect the Genetic Information Nondiscrimination Act or other similar legislation to have on personalized medicine?

Balthrop: The age of personalized medicine has been heralded for some time, and the promise of using molecular diagnostics to determine the right therapy for the right patient at the right time is one that has excited the imaginations of the medical community and the public. However, there also has been the fear lurking in the background that the genetic information used to drive personalized medicine could be used by insurance carriers or employers to discriminate against people or to refuse them coverage. The scope of this concern was seen in a 2007 study by the Genetics and Public Policy Center, which found that 92% of Americans were wary that their genetic information could be used to harm them. Until now, legal protections were unclear and untested, but with the passing of this Act, Americans have an assurance that their genetic information cannot be used inappropriately against them. In the short term, this legislation promises to help in the recruitment of research subjects, as they will no longer need to fear that the genetic information collected could be used against them. In the longer term, the impact could be enormous as new diagnostic/drug combinations are developed—people will be able to use them with confidence and without fear.

McGarrity: This is a great first step along the path to enabling personalized medicine in a safe, effective, and efficient manner. Every individual needs to know that s/he can access health care tailored to his or her specific medical problem without fear of future discrimination.

Craford: This bill is an important milestone for the overall industry. Ensuring that patients’ genetic data is not used against them will help build trust in and adoption of genomics-based tests, and thus help to grow the industry.

Q: How will reimbursement policies need to change to bolster the proliferation of personalized medicine treatments?

Balthrop: Reimbursement policies for personalized medicine treatments are still unclear for the majority of laboratories and health care institutions. Better guidance from regulatory and reimbursement authorities is certainly necessary, but it will be essential for us to provide these authorities with a better understanding of the benefits of personalized medicine treatments as well. The collaboration of many parties—drug developers, diagnostics developers, doctors, insurers, regulators—will be necessary to effectively establish personalized medicine’s clinical and reimbursement future.

Craford: Payors are increasingly recognizing that personalized medicine treatments—and the genomics-based diagnostic tests that inform them—can improve patient outcomes while reducing overall health care costs. The challenge is that genomics-based diagnostics, which require complex methods in order to deliver high-value information, are premium-priced. We feel that the Pathwork Tissue of Origin Test justifies its value, both by the clinical necessity of the information provided to the physician, and by potentially saving money on the diagnosis—one study showed that uncertain-cancer cases cost upward of $17,000 to diagnose. Our test also provides information that the physician may use to make better treatment decisions. This is important because, with many therapeutic regimens for cancer costing tens of thousands of dollars, misguided therapy may not be beneficial for the patient and may be quite costly to the health care system.

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McDonald: In a white paper titled “Crossing the Three Chasms: Complex Molecular Testing and Medicare Regulation,” Bruce Quinn, MD, PhD, addresses this issue. Basically there are three areas in reimbursement that are in need of improvement in order for personalized medicine to proliferate into the system. Medicare Billing Rules: CMS must address the inconsistent policies that have been established regarding date of service (DOS) and hospital-bundling rules. Once these issues have been addressed to all stakeholders’ satisfaction, the Medicare system will begin to realize the health and economic benefits that personalized medicine offers. Coding Rules: The CPT-coding methodology must be able to incorporate testing that is innovative and not a commodity. The time line for new codes to be issued must be addressed in order for new tests to be incorporated into the system. As Quinn points out, the current coding system “only makes sense under a paradigm where laboratory tests are commodities with fixed parameters.” This is not the case for personalized-medicine companies whose products do not fit into the model. As Quinn points out, “These tests are designed to fundamentally alter the paradigms of clinical decision-making, not just to tweak the cost or precision of an existing, predefined test.” Coverage: Evidence-based medicine must be employed, but ask various stakeholders what type of evidence is needed and you will get differing opinions. Payors are used to randomized, prospective clinical trials from the pharmaceutical companies, in which one arm is drug A and the other arm is drug B. In this type of trial it is very clear how well drug A did versus drug B. At face value, people would agree this type of trial is appropriate. It’s only when one gets into the details of the trials for personalized-medicine tests that you realize that these tests are not appropriate and in many cases cannot be performed. Unless the payors are willing to work with personalized-medicine companies to address this discrepancy, coverage will remain a battle in which the ultimate loser is the patient.

Aggarwal: Reimbursement policies need to reflect the rapid pace of innovation in the health care environment. Coding schemes developed in the 20th century need to be updated to reflect new 21st-century technological approaches. Payments need to be linked to diagnostic and treatment effectiveness with global risk-sharing arrangements and updated reimbursement plans for clinical outcomes.

Judy O’Rourke is associate editor of CLP.