Since the FDA approval and commercial successes of Roche’s Herceptin (trastuzumab) and Novartis’ Gleevec (imatinib), the companion diagnostic industry has moved from being viewed skeptically — to essential. What started out as a handful of oncology drugs and corresponding diagnostics has expanded to include additional therapeutic areas. The growth in companion-diagnostic utilization is a trend likely to continue as we close in on realizing the full potential proffered by precision medicine. According to Research and Markets, the global companion diagnostics market is poised to grow at a CAGR of around 18.5 percent over the next decade, potentially reaching $16.24 billion by 2025. “When presenting a companion diagnostic offering to biopharmaceutical executives after a drug has been launched, I have watched their eyes grow bigger and bigger as they realize they have hitched their per-share earnings to a business that doesn’t respond to traditional marketing activity,” says Alan Wright, M.D., chief medical officer for Roche Diagnostics Corporation in Indianapolis. “Essentially, we have to do Diagnostics 101 with these executives and explain how different the market is from that of biopharma.” He should know. After all, Dr. Wright (no relation) not only works for the largest in-vitro diagnostic development company in the world, but in his career prior, he spent more than a decade on the PBM (pharmacy benefit manager) side of the business with CVS Caremark and Advance PCS. Dr. Wright sat down with Life Science Leader to share his experienced perspective regarding some of the nuances of launching a drug that requires a companion diagnostic.
LIFE SCIENCE LEADER: Why should biopharma executives care about the companion diagnostics business?
They should care because when a companion diagnostic is essential for the safe and effective use of a drug, the diagnostic is viewed by both the FDA and payers as the gateway to being able to use the therapeutic with patients. In such a situation, the successful deployment of a drug in the medical community becomes dependent on the successful deployment and use of a companion diagnostic. For example, the first companion diagnostic drug combination is HER2 and Herceptin. But back in 1998 when the FDA first approved Herceptin, HER2 wasn’t an FDA-approved companion diagnostic. That all changed in August 2011 when the FDA approved Roche Genentech’s Zelboraf (vemurafenib, a prescription medicine used to treat a type of skin cancer [i.e., melanoma] possessing a certain type of abnormal BRAF gene) and a companion diagnostic from Roche to determine BRAF mutation- positive metastatic melanoma. What we are now seeing is other companions and drugs being similarly co-approved. The fact that the FDA is now approving the diagnostic with the biopharma in parallel is a fairly recent phenomenon that will likely continue.
LIFE SCIENCE LEADER: What are the most important types of diagnostics?
Two of the most important diagnostics for biopharmaceutical manufacturers to be aware of are companion and complementary. The FDA defines a companion diagnostic as a medical device, often an in vitro device, which provides information that is essential for the safe and effective use of a corresponding drug or biological product. As the definition doesn’t specify the diagnostic, it could be a blood test, a tissue test, or an imaging test. So while the definition is broad, the point is that the diagnostic is essential and could be used to diagnose, select proper patients, or monitor patients. People typically think of companion diagnostics in terms of genetic tests, sequencing, and oncology, but the fact is we [Roche] have projects that span diagnostic platforms. As for complementary diagnostics, that is a concept still in evolution. Elizabeth (Liz) Mansfield, Ph.D., director for personalized medicine and molecular genetics within the FDA, had initially defined complementary diagnostics as being distinct from companion diagnostics, noting that complementary diagnostics provide additional information about how a drug might be used, or whether someone should receive a class of drugs, rather than being necessarily required for the safe and effective use of a drug. In other words, complementary diagnostics provide additional information, but aren’t essential for prescribing a drug. Here is a scenario where a complementary diagnostic might be used. Say somebody is at risk of complications or has poor performance status, and you have an oncology therapy that has an associated set of side effects. A complementary diagnostic could provide additional information indicating this patient has a high likelihood of responding to the therapy, or that the patient has a low chance, and given other factors (e.g., side effects), may not be a good candidate for this particular therapy. I also have heard people define complementary diagnostics as tests that are not unique to a specific drug but span drug classes.
LIFE SCIENCE LEADER: How long does the companion diagnostic approval process take?
Traditionally, it is similar in length to the approval of a drug. As such, if a company is developing a drug that looks as if it might require a companion diagnostic, you really need to have good and early engagement between the drug manufacturer and a companion diagnostic development company. Imagine you are a biopharma company that benefits from a drug receiving an accelerated approval process. For example, in 2015 Pfizer’s Xalkori (crizotinib) received an FDA Breakthrough Therapy and Priority Review designation for the treatment of patients with metastatic non-small cell lung cancer (NSCLC) whose tumors are ROS1-positive. The therapeutic was approved by the FDA on March 11, 2016, based on a multicenter, single-arm Phase 1 study. In a press release announcing the drug’s approval it was noted that “an FDA-approved test for the detection of ROS1 rearrangements in NSCLC is not currently available; however, lab-developed tests are available.” But imagine if this drug required a novel companion diagnostic, and that lab tests were not available. A key point for all pharma companies to understand is that diagnostic companies have a rigorous and long development process that can often take years. If a therapeutic gets an accelerated approval by the FDA, diagnostic companies need to similarly accelerate their approach. Companion diagnostic companies are much like pharma companies in that we don’t necessarily have a shelf-ready diagnostic that can be shipped at the time of launch.
LIFE SCIENCE LEADER: What is the most critical component when preparing to launch a companion diagnostic?
Testing-access readiness is a big issue, because on the day of a drug’s approval you want people prepared to run the necessary companion. Getting a lab up and prepared to run a companion diagnostic test can take months. It is not as simple as sending out a letter stating that kits are available, and to please call so we can mail them out so you can get started. To be ready on day one requires walking backward from the anticipated drug launch date. For a lab that serves a medical community to safely and effectively deliver a lab test, you first need to understand what it takes to be able to do so in a CLIA (clinical laboratory improvement amendments) certified fashion. Six to nine months before the actual drug launch date, you need to select sites that can perform this diagnostic and proficiency testing. Before launch, lab staffs need to be trained to perform the test, and pathologists need to be trained to be able to read the slide. This means that comprehensive study materials need to be available for those who will be conducting the tests, which in cases involving very rare conditions can be quite a challenge. Depending on the size of the testing sites to which materials are being deployed, it can be difficult to get all of the quality-control materials moved around appropriately. In addition, testing-access readiness involves the training of office staff and modifications to the laboratory information system to accommodate a new test. One of the issues we often run into is that many laboratories don’t continuously modify their information systems, but apply a principle of batching so that new groups of tests are introduced to the lab’s information system all at the same time. Ideally, you want to have a new diagnostic test hit that batching cycle at a time that allows for approved labs to become familiar with the test before launch. If that time is missed, you could find yourself having to wait to have the test added in the next batching cycle, which could be post-launch. Labs need to update their directories as well as their interfaces with electronic medical records (EMRs) to include the new test. And, as is often the case, many labs might not have the FDA-approved instrument, but a similar one that the companion diagnostic test can be run on. However, the lab will need to do the appropriate CLIA-lab-developed testing studies to get that test up and running on that piece of equipment.
LIFE SCIENCE LEADER: What are some of the nuances to be aware of in executing a companion diagnostic testing-access readiness program?
Roche Diagnostics is regulated by the FDA. As such, we are unable to do prelaunch promotion. However, there is a safe harbor with the FDA where an appropriate number (an amount that has been negotiated with the FDA) of lab sites will have companion diagnostic testing available at the time of launch. So while we do have the ability to train certain community sites to ensure sufficient access to the companion diagnostic on day one of a drug launch, there is an “ideal” number of sites that we ultimately want to reach to achieve broad community access to the testing. This “ideal” number varies according to disease. For example, lung cancer is very common and community focused. As such, nearly every community hospital manages patients with lung cancer. So in a situation involving the approval of a drug for lung cancer that required a companion diagnostic, there should have been broad access to testing. However, for some rarer lung cancer tumor types that might require more specialized treatment, one would expect access to a companion diagnostic to be less broad, but available in those more specialized areas (i.e., cancer treatment centers). But for purposes of facilitating ideal access to the diagnostics so the pharma companies can effectively deploy their technology, the key is getting those two networks to match (i.e., broad products requiring companion diagnostics have broad access to testing, while specialty products requiring a companion diagnostic have access to testing at a level commensurate with population demand).
Getting ready for testing-access readiness involves determining what the networks should look like, talking to regulators, creating materials, conducting focus groups or medical advisory boards, and conducting research to determine if there are any unforeseen obstacles. Another big consideration is to look at preanalytics handling (i.e., does the specimen require a special handling for the lab) that both the lab and the clinicians need to be trained on (e.g., using a different type of tube, collecting a different type of specimen). There may be a need to think about different companion diagnostic strategies. For example, a clinical study might use one type of specimen, but perhaps a condition in the community is actually diagnosed using three types of specimens. What is the strategy to bring those other specimens in so that the diagnostic can be done? Finally, getting ready for testing-access readiness and actually executing a testing-access readiness program can be a very delicate balancing act. Just as drug companies have to be very careful about what information is provided to the market before a drug is FDA approved, so too do diagnostic companies. When beginning to execute testing-access readiness we are extremely careful not to go beyond the list of FDA-approved sites. Unfortunately, we frequently get requests from labs wanting to be able to do a test on day one. If they are not on the list, we cannot work with them before day one.
LIFE SCIENCE LEADER: Thinking about the approval of a biosimilar that required a companion diagnostic, would the companion diagnostic just be grandfathered in?
Not necessarily. As with all molecular testing, there are often different techniques to assess a target gene, and there are regulatory pathways for labs to get certification for various ways of testing those genes. One of the subtle but important things is that the FDA-approved companion diagnostic be “tuned” to the performance of the drug. Depending upon the platform and technique used to conduct a companion diagnostic, the level of mutation or target detected can (and often does) differ. This can result in a slightly different community patient population being selected for the drug, and thus, the community performance of the drug may (probably will) differ from community performance of the drug in clinical trials. Further, there also can be groups of tests that are used to assess a particular condition that already exists in the marketplace. Though these might not be a companion diagnostic and use completely different analytes and targets, they may sound similar, or actually be called the same thing in the marketplace. As a result, these platforms can be used inappropriately to guide companion diagnostic testing (i.e., using a diagnostic off label).
LIFE SCIENCE LEADER: What does it mean to launch into a fee schedule?
PBMs negotiate the price in the marketplace for what they can charge for a drug. On the diagnostic side, if we have a companion diagnostic that is a PCR-(polymerase chain reaction) or sequencing-based test, the amount that is to be paid for that test is already established. Even though we may be measuring a new analyte, target, or panel, we will still get paid the same amount for the same or similar technique. A pharma company having successfully developed a drug for a rare disease is able to alter/raise the price for a new therapy to defray R&D costs. At least in the U.S., there is practically zero ability for diagnostic companies to set or negotiate a price. As such, when launching a companion diagnostic, we conform to doing so based on a fee schedule. While some might note that drug companies often launch into insurance company-tiered formularies, it is not the same. Because you could have a $100,000 drug being tier-two at one PBM, while at another PBM the drug could be similarly priced but listed as tier-three. The difference in tiers doesn’t necessarily affect the price, but provides for either a difference in co-pay or co-insurance.