Unlocking the Promise of Personalized Medicine: Reimbursement, Coverage, and Clinical Utility

15 September 2014 Personalized Medicine Bulletin Blog

AmerisourceBergen, in connection with the Business of Personalized Medicine Summit, released “Unlocking the Promise of Personalized Medicine: Perspectives on Reimbursement, Coverage, and Clinical Utility” (“Report“). The Report explores the role of personalized medicine in today’s health care system with an overview of payer perspectives and provides recommendations to innovators to navigate the path to commercialization of these products.

Barriers in the U.S. and Europe

The Report notes that lack of standardization in regulatory, coverage, and reimbursement approval processes from country to country is the major barrier to the use of personalized medicine in the U.S. and in some European Union (“EU”) countries. For example, each country has its own decision making agency, each requiring different evidence regarding the device and companion drug’s efficacy, safety, and cost-effectiveness. As a result, “it is difficult for device manufacturers of drugs and companion diagnostics to develop studies that meet all of the data needs for all payer stakeholders on a global scale.” Report at page 4.

The Report also notes the lack of supportive incentives and public policy initiatives necessary to advance the industry, such as:

  • traditional funding, pricing, or reimbursement systems fail to provide sufficient incentives for the development of companion diagnostics and drugs;
  • insufficient funding for the education of physicians and patients in personalized medicine, such as genetic counselors; and
  • to the extent that personalized medicine tests or processes are difficult to patent or protect from rapid copying, it remains uncertain how investment in the tools of personalized medicine will attract sufficient investment capital and research and development funds to permit their commercialization.

Factors Influencing Reimbursement Decisions

The Report indicates that payers are becoming more interested in the concept of personalized medicine as more targeted therapies enter the U.S. market. The biggest hurdle, however, “is the inherent variability in payer opinions and coverage levels in a system as fragmented as the U.S. system. Since coverage and reimbursement decisions are made at a health plan level – of which there are several hundred in the U.S. in addition to a national payer system for low-income, disabled, and elderly Americans – heterogeneity in the decision process as well as the ultimate payer coverage decision for the treatment and companion diagnostic create disparate access to PM (personalized medicine) among Americans with various health coverage policies.” Report at page 5.

Clinical Utility and Value

The Report encourages innovators to think through potential coverage and reimbursement scenarios early in the development process to allow the generation and collection of evidence to support use of the product in connection with the diagnostic test. Developers are encouraged to incorporate companion diagnostics into early clinical trials to collect evidence supporting patient outcomes directly related to the use of a diagnostic. If the information is collected early in the development process, the Report notes, significant improvements in patient outcomes can be established by the time the product receives marketing approval by the appropriate regulatory authorities. This information is argued to help bolster the case for coverage and reimbursement of the device and product as a pair rather than separate entities.

Looking Ahead

Personalized medicine can improve patient care and reduce health care costs. However, market fragmentation and global payers’ skepticism of the inherent value of the therapeutic and companion diagnostic are slowing innovation and adoption of this important field. While working within the current system, the Report recommends co-development of the diagnostic and therapeutic product and early initiation of data collection in the clinical trial process to provide the necessary information to share with payers to overcome fragmentation and facilitate positive coverage and reimbursement decisions.

The Report was co-authored by Chelsey Campbell, PharmD, MBA, MS, Manager, Global Health Economics, Xcend, LLC; Thomas Bramley, PhD, Senior Vice President, Scientific Consulting, Xcenda, LLC; and Thomas Mittendorf, PhD, Managing Director, Herescon GmbH.

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