In this article, we illustrate how personalized medicine will change the pharmaceutical industry.  When one contemplates the complexity of the future environment, it becomes quite clear that existing discovery, development, regulatory, commercialization, and reimbursement frameworks are nowhere near prepared for the changes coming with personalized medicine.

It is imperative that pharmaceutical company executives develop a common understanding of the changes ahead, so a cohesive strategy and set of actions can be implemented across the entire enterprise.  If not, pharmaceutical companies run the risk that each function and therapeutic business unit will develop its own, unaligned set of strategies and actions to address personalized medicine.

Personalized Medicine – Background and Definition

Drugs work for some patients but not others; the same is true for drug side effects.  For example, when receiving a chemotherapeutic like paclitaxel, some patients benefit and others do not – some patients have nausea or neuropathy while others do not.   Thanks to a better understanding of cell signaling pathways, molecular biology, genetics, and genomics, we are starting to understand why some drugs are safe and effective for certain people but useless or harmful for others.

Although several definitions exist, “personalized medicine” or “targeted therapy” refers to the tailoring of medical care to the individual characteristics of each patient, often by classifying individuals into subpopulations based on their genetic makeup, susceptibility to a particular disease, or response to a specific treatment.  Preventative or therapeutic interventions can then be concentrated on those who will benefit, sparing expense and side effects for those who will not. Some personalized medicines or targeted therapies have added years of life expectancy to patients with life-threatening conditions such as chronic myeloid leukemia (CML), HIV/AIDS, lung cancer and malignant melanoma.

Based on the definition above, there are at least two ways to develop personalized medicines:

1. Leverage molecular biology to identify targets that are differentially expressed in the medical condition and then create drugs to “hit” the target.  For example,  both Herceptin^® (Genentech) and Tykerb^® (GSK) target the HER2 receptor, which is overexpressed in many breast cancer tumors.
2. Leverage genomics and diagnostics to identify patients with a particular genomic profile who are most likely to respond to therapy or most likely to suffer toxicity.  For example, Zelboraf^®(Genentech) is approved for patients whose metastatic melanoma tissue has a specific mutation in the BRAF gene.

What’s Different about Personalized Medicine?

To bring personalized medicines to market, scientists analyze genomic profiles from hundreds or thousands of patients with a particular disease and compare them to genomic profiles of healthy patients.  The goal is to understand how genetic differences contribute to disease.  If a certain gene is missing or is not producing a needed protein, that protein can be synthesized and administered.  If a certain gene is causing the body to create a “harmful” protein, that protein can be neutralized therapeutically and, if necessary, replaced with a “healthy” protein.

Because of how these drugs are developed, they are only likely to work for the subset of patients for whom they were designed.  For example, the drug Herceptin^® is only effective for breast cancer patients with HER2 positive tumors.

Similar to how the Internet has transformed the retail, music, and publishing industries, personalized medicine (or genomics or targeted therapy) is going to change to the entire healthcare ecosystem.  Pharmaceutical companies will experience the greatest amount of change because personalized medicine changes how drugs are discovered, developed, submitted, commercialized, and reimbursed.

If you would like a copy of the entire series in a single PDF, please send an email to wkalmans@lontraventures.com and I will send it to you.

Over the years, research and discovery teams have deployed numerous techniques to identify “trial-worthy” compounds.  Some discovery was pure serendipity (e.g. penicillin) while others were the result of decades of research in molecular pathways (e.g. lovastatin).   Some drug discovery techniques have included:

• Combing the rain forests and oceans to find bacteria, plants, and animals with interesting biologic properties (e.g. paclitaxel from pacific yew trees).
• Viewing a target molecule using X-ray crystallography and designing a compound that stimulates or inhibits the target (e.g. pralatrexate).
• Synthesizing a product (usually a protein) that the body does not make or does not make in sufficient quantities (e.g. insulin).

Initial drug candidates are developed using these techniques above, and then medicinal chemists create libraries of molecules and select a lead candidate to move forward into development.

Personalized Medicine Implications

As personalized medicines are only effective for a subset of patients with a particular genomic profile, drug discovery units must invest heavily to obtain genomic data from large numbers of patients with and without a particular clinical condition (e.g. diabetes, MS, colorectal cancer, etc.).  Discovery teams will then sift through this genomic profile data to identify the percent of patients with a particular clinical condition and a particular genomic profile.  If discovery teams are able to screen large numbers of patient genomes, they could identify new targets that may not have been previously identified, particularly if the target genomic profile is relatively low frequency (e.g. only 5% of all lung cancer patients have ALK positive tumors thereby making them eligible to receive crizotinib, a personalized medicine designed for this small minority of lung cancer patients).

Before any drugs are designed to address a specific genomic profile, the development costs should be compared to the potential number of patients and the lifetime revenue per patient and then risk adjusted to see if such an investment is warranted.  Unlike conventional medicines, the development of personalized medicines needs to add additional time and money associated with genomic testing.   For example, if only 5% of people with a particular condition have the target genomic profile, then 100 clinical trial candidates will need to be tested to identify 5 patients meeting the genomic enrollment criteria.  Depending on the incidence and prevalence of the condition and the percentage of patients with the target genomic profile, it might not make sense to move a discovery program forward.

If you would like a copy of the entire series in a single PDF, please send an email to wkalmans@lontraventures.com and I will send it to you.

In drug development, a series of preclinical safety, toxicity and efficacy studies are performed in vitro and in animals prior to administering these drugs to humans.  Clinical trials are designed to first addressing safety, then dosing, then efficacy, and finally larger Phase III trials to look at efficacy and other endpoints (e.g. overall survival).

Personalized Medicine Implications

New animal models may need to be developed in order to effectively evaluate safety and efficacy of personalized medicines.  Since mammalian pathways are quite similar across species, good animal models exist for many diseases.  However, with the advent of personalized medicines targeted to certain kinds of genomic profiles, it may be necessary to create new xenograft models or genetically engineered mouse (GEM) models with specific genomic profiles necessary for assessing safety and efficacy.  Creating such models could involve significant time and money.

Personalized medicine poses even bigger implications for human trials.  Genomic information will not likely be needed for Phase I trials which are typically in healthy volunteers.  However, Phase I/II trials often require measurement of a biomarker to show both safety and a “signal of efficacy” in order to receive funding for additional studies.  Therefore, it is likely that all trials after the 1^st Phase I trial will require monitoring by biomarker, despite known challenges to identify response biomarkers a priori, before there’s any clinical data.  Phase II trials should collect patient genomic information as it is often unknown which patients will respond to the medicine (e.g. those who over-express/under-express a particular receptor, those with a particular genomic profile, etc.).  In addition, early on, both responders and non-responders will be needed to develop companion diagnostics and better understand the safety and efficacy profile of the medicine.

Recruiting the number of patients for large-scale Phase III trials becomes significantly more challenging.  If a genomic test doesn’t exist, it will need to be developed, and all patients will need to be tested.  Testing all patients to find those with the specific genomic profile will cost additional money and may significantly slow enrollment, particularly if only a minority of patients tested meet the target genetic profile. To keep costs down and speed enrollment, drug companies will either need to increase the number of investigator sites or focus on investigator sites with large numbers of patients who have already been sequenced.  Lastly, the genomic profile may only be part of the story as genes can be switched on and off; some diseases and personalized medicines may not be related to genomics, but rather RNA or protein expression.

Here are a few more suggestions for drug developers.

1. Genetic material (blood/tissue) should be gathered and preserved for all human trials.  As our knowledge of genomics expands, companies will want to apply this knowledge retrospectively to see how it might impact safety, efficacy, and other endpoints.  NOTE:  Proper patient consent must be obtained; consult with Legal.
2. Although retrospective analysis of subpopulations could provide significant value, it could also have unintended regulatory, legal, and commercial consequences.  Proceed with caution.
3. If pathway and genetic implications are known, then companion diagnostic tests need to be simultaneously developed with the drug (best practice is to have the diagnostic leader participate as a full-fledged member of the drug development team).
4. Recent FDA approvals (e.g. Xalkori^® and Zelboraf^®) have included the need for an FDA-approved diagnostic test in the product label.  Personalized medicines lacking a companion diagnostic may place themselves at risk for FDA approval (e.g. Omapro^® by ChemGenex).
5. Pharmaceutical companies need to establish tight partnerships with diagnostic firms.  Developing a diagnostic requires a different set of skills (scientific, clinical, and commercial) and has a very different regulatory path than for a therapeutic.
6. In very competitive markets with little differentiation between products (e.g. kidney cancer), a companion diagnostic that allows for more targeted patient selection might help a late-to-market product gain patient share.

Lastly, drug development and portfolio management teams will need to constantly evaluate competitors and their relative progress through clinical trials.  Whereas in the past, markets were big enough so that 4 or 5 products could compete for market share, markets for some personalized medicines may not allow for more than 1 or 2 products.  Therefore, if a product is going to be second or third to market, it had better be a big enough market or a clear winner.

If you would like a copy of the entire series in a single PDF, please send an email to wkalmans@lontraventures.com and I will send it to you.

The FDA and other regulatory agencies are conservative by design.  Drugs are approved based on their safety and efficacy (historically their ability to address a particular disease or patient condition) regardless of a patient’s genomic profile. Pharmaceutical companies have attempted to follow proven regulatory pathways as opposed to proposing or negotiating new ones which could add both time and risk.

Personalized Medicine Implications

For two recent personalized medicines approved by the FDA, Xalkori (Pfizer) and Zelboraf (Genentech & Daiichi Sankyo), the Agency approved the following labels:

• XALKORI is a kinase inhibitor indicated for the treatment of patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) that is anaplastic lymphoma kinase (ALK)-positive as detected by an FDA-approved test.  This indication is based on response rate. There are no data available demonstrating improvement in patient reported outcomes or survival with XALKORI.
• ZELBORAF is a kinase inhibitor indicated for the treatment of patients with unresectable or metastatic melanoma with BRAFV600E mutation as detected by an FDA-approved test.

Based on these precedents, if a pharmaceutical manufacturer wants to get a personalized medicine approved, it had better have “an FDA-approved test” to detect the genetic profile or risk the consequences.

If you would like a copy of the entire series in a single PDF, please send an email to wkalmans@lontraventures.com and I will send it to you.

Pharmaceutical marketers use the classical 4Ps of marketing (product, price, place, promotion) to market therapeutics to the key stakeholders:  prescribers, payers, and patients.  Tactics deployed depended largely on the size of the market, the number of competitors, the number of prescribers and payer ability to influence access/coverage.

Primary Care Drug Tactics (examples):

• Use big sales forces to promote broadly to prescribers (reach and frequency).
• Negotiate contracts with payers to gain desired tier on drug formularies.
• Deploy direct-to-consumer campaigns to engage the patient in the product selection process.
• Ensure products are within easy reach of patients (open distribution).

Specialty Drug Tactics (examples):

• Use small sales forces to promote to smaller group of prescribers.
• Invest in outcomes studies to showcase drug “value” versus cost to payers.
• Create copay programs, adherence programs, and side effect management programs to maximize appropriate product utilization.
• Contribute to 501c3 patient assistance foundations so that qualifying patients can obtain access to diagnostic testing and therapy in accordance with their financial means.
• Ensure products are accessible, but more importantly, are well-supported by clinical specialists who can advise patients on a number of topic related to the medication (limited distribution).

Personalized Medicine Implications

Although the majority of today’s personalized medicines are specialty drugs, the concept of personalized medicine is just as applicable to primary care drugs.  For example, diagnostic tests are currently available to determine whether Plavix® (a drug used by millions of patients) is effective or not for a particular patient.  Well-published data show that a small number of patients with a specific genetic profile obtain little to no benefit from Plavix.

Personalized medicine adds quite a bit of complexity to the sales and marketing processes:

• The target market is smaller:  Whereas, products used to be FDA-approved for all patients with a particular disease, now they may be approved for a segment of that population with a specific genetic profile.
• The physician message is more far complex:  Whereas the limited detailing time available was devoted to safety, efficacy, and competitive positioning, the same amount of time now needs to also include a discussion about patient selection (genomic profile) and diagnostic testing.
• The physician office manager and staff need even more education than before:  It used to be that the doctor wrote a prescription and the patient picked it up at the pharmacy.  Sure, prior authorizations were sometimes necessary, but now the office manager may need to have a relationship with one or more testing companies offering FDA-approved diagnostic tests.  Some tests require blood, some a cheek swab, and others require a tissue sample.  The office manager needs to know how to order those tests, code them for reimbursement (assuming they will be reimbursed), and ship them for processing.  NOTE:  These service components are quite new and different for most pharmaceutical companies.

If you would like a copy of the entire series in a single PDF, please send an email to wkalmans@lontraventures.com and I will send it to you.

The market access/reimbursement teams at pharmaceutical companies work closely with payers, advocacy groups, commercial copay programs, and 501(c)(3) patient assistance foundations to help ensure approved medicines are covered by public and private payers.  Once coverage has been established, these groups focus on understanding the payer-to-payer differences in processing and paperwork needed to receive reimbursement for the therapy.

Personalized Medicine Implications

Payers need as much information as possible about the clinical condition being treated and the percentage of patients who have the specific genomic profile.  One way payers determine coverage is by weighing the benefit of the therapy against the sum of the following:

• The aggregate diagnostic testing costs necessary to identify a single patient with the  appropriate genomic profile.  For example, if 5% of the population has the needed genomic profile, then, on average, 20 patients must tested to find one with the desired profile.
• The cost of treating the patient with the personalized medicine.
• The risks/side effects of the therapy.

Once coverage is determined, pharmaceutical companies need to work closely with each payer to understand the reimbursement process for both the diagnostic test as well as the therapeutic and then communicate this information to prescribers.

In the US, payers often will not reimburse for the cost of diagnostic testing until the patient’s deductible is met.  As mentioned in an earlier section, drug companies need to have direct-to-patient materials about coverage and reimbursement options (e.g. copay programs, 501c3 foundations) associated with the diagnostic test as well as the personalized medicine.

If you would like a copy of the entire series in a single PDF, please send an email to wkalmans@lontraventures.com and I will send it to you.

Historically, drugs are approved for an initial indication; then the lifecycle management team pursued additional indications.  Rarely were indications revoked by regulators, so the potential market usually increased indication by indication.  Within each indication, companies competed for market share.

Personalized Medicine Implications

As our understanding of genomics increases, it is likely that clinicians will discover subsets of patients for whom a drug is safe and effective as well as subsets for whom it is not.  If these subsets are known prior to regulatory approval, the pharmaceutical manufacturer can build this knowledge into its launch plans and price the product accordingly.  However, if subsets are discovered long after product launch, appropriate utilization of the product could drop significantly leaving the manufacturer with a difficult choice:

1. Attempt to raise the drug’s price to compensate for the smaller market (not likely to be successful in the US and EU)  OR
2. Dramatically lower the drug’s shareholder value over the patent term

For example, the EGFR antagonists, Vectibix^® (Amgen) and Erbitux^® (Bristol-Myers Squibb and Lilly) both saw their target markets shrink by 40% when post-approval data showed these drugs to be ineffective in patients whose tumors had KRAS mutations.

In another scenario based on genomics, it is possible that clinicians will discover subsets of patients who require a much higher dose than was approved by regulators.  At first glance, such a scenario would appear to be a boon for the pharmaceutical company.  However, in order to market or promote such a finding, the manufacturer would be required to perform a clinical trial and submit to the regulator for a label change.  Depending on the overall size of this subset of patients, the cost of the trial (both in time and in money) might be prohibitive.  Furthermore, any label change would trigger a price renegotiation at the national level in the EU.

The pharmaceutical sales team cannot educate a physician or a payer on the varying genetic profiles, the appropriate genetic test, the dose for the physician to prescribe and the payer to reimburse unless the trials were completed and the indication approved; otherwise they open themselves up to off-label marketing liability.  One way to address this challenge might be to fund post-marketing trials and hire/train an even larger team of medical science liaisons (MSLs) to bring such compendia to light, but many pharmaceutical manufacturers are risk averse given tough scrutiny of such practices by regulators.

If you would like a copy of the entire series in a single PDF, please send an email to wkalmans@lontraventures.com and I will send it to you.

Personalized medicine has arrived, and its impact has only begun to be felt across the healthcare ecosystem.  In this article, we have illustrated how personalized medicine is likely to change the pharmaceutical industry, historically one of the riskiest yet most profitable parts of the healthcare ecosystem.

When one contemplates the complexity of the future environment it becomes quite clear that existing discovery, development, regulatory, sales & marketing, and reimbursement frameworks are nowhere near prepared for the changes coming with personalized medicine.

Since so many pharmaceutical company processes will be disrupted by personalized medicine, it is important that companies take a proactive, top-down approach to prepare for this inevitable change.  It is imperative that senior executives from the traditional silos of R&D and commercial operations develop a common understanding of the changes ahead, so a cohesive strategy and set of action items can be implemented across the entire corporation.  If not, the pharmaceutical company runs the risk that each function and therapeutic business unit will develop its own, unaligned set of strategies and actions to address personalized medicine.

*NOTE:   The author would like to thank Coline David, Ellen Goldberg, and Tom Komenda for contributing to this article.

If you would like a copy of the entire series in a single PDF, please send an email to wkalmans@lontraventures.com and I will send it to you.

FACT: Personalized Medicine has already changed the lives of hundreds of thousands of people, and it is well on its way to changing the lives of millions.

FACT: Depending on the results of a genetic test, certain medicines can be prescribed that can extend the life of a cancer patient by months or even years.

FACT: Today, the cost to sequence an entire human genome is $5,000. Within the next 2 years, the expected cost to sequence an entire human genome is $1,000, about the price of an MRI.

The goals of this blog are to:

1. Educate consumers about Personalized Medicine
2. Encourage consumers to discuss Personalized Medicine with their physician
3. Provide some guidance as to where to look for more information

What is Personalized Medicine?

Although several definitions exist, “Personalized Medicine” refers to the tailoring of medical care to the individual characteristics of each patient, often by classifying individuals into subpopulations based on their genetic makeup, susceptibility to a particular disease, or response to a specific treatment. Preventative or therapeutic interventions can then be concentrated on those who will benefit, sparing expense and side effects for those who will not.

NOTE: Many people believe that Personalized Medicine is a medicine that is specifically “personalized” to one individual. To date, such a medicine is an exception as opposed to the rule. To the best of my knowledge, the only such FDA-approved medicine that meets this description is Provenge® (Dendreon) an immunotherapeutic for treatment of advanced prostate cancer.

Two examples of recently approved, life-extending, personalized medicines (also referred to as targeted therapeutics) are Xalkori® (Pfizer) for non-small cell lung cancer and Zelboraf® (Genentech and Daiichi-Sankyo) for metastatic melanoma. These drugs do not “cure” the patient, but they have been shown to prolong patient life. In order to receive either drug, a genetic test must be conducted on the relevant tumor tissue. A physician will take a tissue sample and send it to a lab for genetic analysis.

• Xalkori has been shown to prolong survival for the 3-5% of non-small cell lung cancer patients whose lung cancer tissue is ALK positive.
• Zelboraf has been shown to prolong survival for the 40% of malignant melanoma patients whose melanoma tissue has the BRAF 600e mutation.

In both cases, if the patient’s tissue does not have the particular mutation, neither drug appears to be effective, and payers are not likely to reimburse the treatment.

To date, the majority of Personalized Medicine examples are in oncology, but there are emerging examples in cardiology, particularly for the millions of patients who have received stents and are currently taking Plavix® (Sanofi Aventis and Bristol-Myers Squibb). Based on recently published research, Plavix does not appear to work for a small percentage of patients with a certain genetic makeup, 2-15% depending on ethnicity. Furthermore, 30% of an additional group of patients might need their Plavix dose dramatically increased for the drug to work effectively.

Engaging with Your Physician

Although I am not a physician, I would recommend that all cancer patients bring up the subject of genetic testing and personalized medicine. Most of these tests are reimbursed by Medicare and private payers.

• If I had melanoma or non-small cell lung cancer, I would want to know if I were a candidate for these new cancer therapeutics.
• If I were taking Plavix after receiving a stent, I would want to know whether the Plavix was working and whether I was taking the right dose.

These are just two examples; there are many more.

When the price to sequence my genome drops to $1,000, will I do it? I think so. That said, assuming I am still healthy, I would want to think through the privacy issues as well as reimbursement (who pays the bill).

What Do You Think?

• Have you or would you feel comfortable raising the subject of personalized medicine or genetic sequencing with your doctor?
• Under what circumstances would you pay $1,000 to sequence your genome?
• How would you feel if someone else would pay the $1,000 but would also have access to your genetic information?

Where to Find More Information

Here are a few sites to learn more about Personalized Medicine. These sites are more directed to consumers than industry.

www.personalizedmedicinecoalition.org

http://health.usnews.com/health-conditions/cancer/personalized-medicine

*NOTE: In Walter Isaacson’s biography Steve Jobs, Walter cites Personalized Medicine as one of the reasons Steve Jobs was able to live as long as he did with pancreatic cancer. Steve was one of the first twenty individuals in the world to have his normal and tumor DNA sequenced. At the time, it cost more than $100,000.

The Wharton School of the University of Pennsylvania and

The McCombs School of Business at the University of Texas at Austin.  Click “Read more” for the Links to these sites.