Biopharma Pushes for Wider Acceptance, Use and Reimbursement of Companion Diagnostics

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It’s been predicted for some time that individuals would get their entire genome sequenced in order to more personalize treatments and to predict diseases. However, it’s been much slower coming, largely because payers are skeptical that there’s real value in widescale use.

What is happening, however, is biopharma companies are working with diagnostic companies to develop companion diagnostic tests to go along with specific therapies, often cancer drugs. One example is the drug Vitrakvi, developed by Eli Lilly and its Loxo Oncology, which is marketed by Bayer. Vitrakvi works on cancers where there’s a rare genetic mutation found in less than 1% of solid tumors—no matter where in the body they are found.

The drug is so effective in this patient population that MD Anderson Cancer Center physicians called it the “Lazarus effect,” for its ability to reverse late-stage cancers that haven’t responded to other treatments.

But identifying those patients has been a challenge.

Lilly recently signed a deal with Thermo Fisher Scientific to develop a companion diagnostic for its experimental drug, LOXO-292. Bayer indicates it plans to invest $70 million to improve patient and physician awareness of rare mutation testing and to lobby regulators for approval of more tests. They also indicate they expect their budget to grow as Vitrakvi is approved in more countries.

The Lilly-Thermo Fisher deal adds RET mutations, the target of Lilly’s LOXOo-292, as well as a drug being developed by Blueprint Medicines Corp., to Thermo’s Oncomine Dx Target Test. The test is used by medical laboratories to identify several genes associated with non-small cell lung cancer (NSCLC).

Thermo’s Oncomine Dx Target Test is already approved by the U.S. Food and Drug Administration (FDA), and CNBC notes that it is a key standard for Medicare coverage.

Brian Alexander, chief medical officer of Roche’s gene testing company Foundation Medicine, told CNBC that approximately 15% of U.S. advanced cancer patients receive comprehensive genomic profiling, with another 2% receiving single-gene testing. A large proportion, he noted, “are not getting any testing at all.”

For example, MD Anderson, which treats 100,000 new cancer patients annually, indicates only about 10,000 have their tumors sequenced.

It’s a trend now, for biopharma companies to develop a companion diagnostic along with a drug, if the drug’s effectiveness is associated with specific genetic mutations. In May, for example, QIAGEN and Inovio Pharmaceuticals partnered to co-develop a companion diagnostic to go along with Inovio’s DNA-based immunotherapy for cervical dysplasia caused by human papillomavirus (HPV). That deal focuses on Inovio’s VGX-3100, a product candidate for HPV 16 and HPV 18 infection and precancerous lesions of the cervix (Phase III) and vulva and anus (Phase II).

And in April, Merck’s checkpoint inhibitor Keytruda (pembrolizumab) was approved for yet another indication, this time as a monotherapy for the first-line treatment of stage III non-small cell lung cancer (NSCLC) in patients who are not candidates for surgical resection or definitive chemoradiation, or metastatic NSCLC, and patients whose tumors express PD-L1 as identified on an FDA-approved companion diagnostic, with no EGFR or ALK genomic tumor aberrations.

Last year, Medicare indicated it would cover FDA-approved tests for advanced cancer patients that test for multiple genetic mutations at once. Usually this kind of endorsement is followed by coverage by private insurers. However, the final regulations eliminated a requirement for the diagnostic test makers to prove the tests were cost-effective and improved patient care.

Jeff Schreier of Diaceutics, a data analytics company, told CNBC this created an “evidence gap” that allowed some insurers to withhold coverage or demand more proof of benefit. “More payers are coming around, but it’s slow.”

Although some of the bigger companies’ companion diagnostics are being reimbursed by Medicare, many laboratories and healthcare institutions have developed their own tests and are not necessarily being reimbursed. Although there are signs of progress, uptake is still slow. The Lilly-Thermo deal and Bayer’s efforts may help speed the process.

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