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Companion Diagnostics: Improved Drug Selection for Patients- But Who Pays?

By September 23, 2009December 18th, 2023Awareness, Science & Research

It is well recognized that one drug is unlikely to effectively treat all patients with a particular condition: some will respond while others won’t, with likelihood of response driven by the underlying genetics of the patient. This and similar findings in other cancers are prompting pharmaceutical companies to develop ‘companion diagnostics’ in conjunction with promising drugs. These are tests that can be done prior to enrolling patients in a trial to predict likelihood of efficacy. On September 22, 2009 the New York Academy of Sciences held a meeting on the topic: Emerging Importance of Companion Diagnostics in Drug Development*. Looking ahead as multiple drug options become available for individual conditions, such as cancers, companion diagnostics should inform physician decision making on which drug to prescribe.

For drug companies, these diagnostics should also accelerate clinical trials and inform the development of improved ‘next generation’ drugs, though for example in trial design, a key question will be  how many (or few) patients responding to a drug is meaningful. However, companion diagnostic development doubles both the cost and the risk for pharma in a time when development of a successful drug is estimated to cost $1.7 billion.  And ultimately, someone has to pay for these services: and herein lies a major challenge with healthcare insurers, faced with the challenge of keeping up with the rapid pace of medical research progress. Healthcare insurers drive procedure coding, coverage and reimbursement, and many new emerging companion diagnostic tests are off the current scale of what can be reimbursed. As companion diagnostics companies emerge, they are endeavoring to fit reimbursements into the existing insurance framework; but true integration will take time. The good news is that once this does happen, companion diagnostics could serve as a cost-saver for insurers; drug treatment regimes are frequently in the $50,000 – $100,000 range, while a diagnostic test might rule out that drug being effective for inviduals, at a fraction of the cost. Of note, the use of companion diagnostics fits into the overarching theme of ‘comparative effectiveness’, a major healthcare topic before congress and an area that already received a special $800M commitment in this spring’s Recovery Act research funding for NIH.  This is an area that will be interesting to track.

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