Clinical OMICS

JAN-FEB 2019

Healthcare magazine for research scientists, labs, pathologists, hospitals, cancer centers, physicians and biopharma companies providing news articles, expert interviews and videos about molecular diagnostics in precision medicine

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14 Clinical OMICs January/February 2019 www.clinicalomics.com having a premium reimbursement decision in hand can help a diagnostic company and its pharma partner gain market access through labs with a broad footprint. "If you are using a companion diagnostic to identify a patient that has an increased likelihood of benefitting from a therapy, that is tremendous value. But there wasn't, histor- ically, an appreciation for that kind of value," Ander- son said. "That is changing, and it is changing in a very positive way. We are see- ing [payers] understanding both the complexity of the testing and the value pro- vided. We are moving in the right direction on the reimbursement front." While the data from the clinical trial ultimately carried the day for MRDx in securing their reimbursement from CMS, there is also a movement for diagnostics developers and their co-develop- ment partners to share preliminary data with payers about CDxes as soon as practical in the clinical trial. "The payers are really the diagnostic company's cus- tomers, so they need to figure out what their customers want and what they want to see for data in terms of clini- cal utility and clinical validity," said Hannah Mamuszka, founder and CEO of Cambridge, MA-based diagnostics consulting firm Alva10. As Mamuszka sees it, the earlier payers are engaged with the co-development partners, the better. This allows the diagnostic company to understand what data and evidence from the clinical trial the insurance company will need to make a positive reimbursement decision. Too often the diag- nostic company exerts so much of its focus developing the test itself that it may let this early legwork slide. "Usually diagnostics companies approach payers when they have completed their clinical validation and when they have already launched onto the market," added Mamuszka. "If you think about it, there is no other business where you would build your product without asking your customer if it is what they wanted, start selling it to them, bill them and get them to pay at the same time." Eibel sees the practicality of this approach but is a bit skeptical about how workable it is in the co-development process. "It can be hard to get your co-development partner to share their data, since it is proprietary and they need to protect it for the specific indication." Competing with LDTs While getting an appropriate reimbursement for a com- panion diagnostic can be mission one in a commercial- ization strategy, it's all moot if pathology labs provide a knock-off LDT, or non-approved test that identifies the same biomarker. "It is a huge problem that is one of the biggest issues we face with our partner Novartis," Eibel said. Part of the problem stems from the confidence and trust doctors often place in their testing lab of choice. "You have clinicians that have always used a certain reference lab and the lab says that we test for CML and our test [is as accurate as their test.] The doctors put trust in their pathologists and their pathologist's LDT," Eibel added. The problem for diagnostic companies is multifaceted and complex. Despite efforts to better regulate LDTs in the past, the FDA is not in a position to be an enforcement agency when an LTD is used instead of the approved CDx. Many drug companies with a therapeutic requiring a CDx, are not interested in protecting the market of a test costing a few hundred dollars as long as their drug is prescribed. And payers—at least to date—have not shown a strong interest in preauthorization of prescribing the drug only if the CDx is used. For some test developers, the answer to mitigate some of the market erosion from LDTs lies in physician education and in making sure the National Comprehensive Cancer Network (NCCN) guidelines reflect the need to use the CDx only for the specific subset of patients. Unfortunately, it didn't work out that way when Myri- (continued from previous page) Hannah Mamuszka, founder and CEO, Alva10 After more than a month of intense negotiating, MolecularMD was able to secure a significantly higher reimbursement from CMS for its BCR-ABL MRDx companion diagnostic.

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