Pity the poor companion diagnostic (CDx). It’s up against a lot. In most cases, pharmaceutical companies don’t want one, since it cuts down the potential market for their planned drug. Payers have often lumped FDA-approved diagnostic into the same bucket as lab-developed tests (LDTs), which provide paltry reimbursement, making it virtually impossible to recoup the millions spent developing the test and running it through clinical trials. Larger reference labs, with more than a regional footprint, are often reluctant to add CDxes to their testing menus due to the investment needed and anticipated low volumes. Finally, lacking an effective method to police their use, it is often all too easy for labs to use their own LDT to test for the biomarker in question, further limiting the CDx’s market.
“Diagnostics is a tough business, but it is an important business,” said Jonathan Arnold, head of next-generation diagnostics marketing with Qiagen. “We touch three-quarters of all healthcare decisions that are made around a patient, and we shouldn’t lose sight of that.”
It is that direct, one-to-one relationship of a CDx to the patient and the selection of the right drug based on their particular molecular makeup—a bona fide method of delivering precision medicine—that keeps diagnostics companies in the game, despite the challenges.
Or, as Jonathan Lancaster, MD, of Myriad Genetics puts it: “As a chief medical officer, I say it is the right thing to do for patients, and if it is a family member, loved one, or friend battling cancer, I want to ensure they are getting the very best drug and also the very best quality of test.”
But, what is right for the patient may not translate to what is right for the business, and developers of CDxes must continue to find ways to answer the question of what it takes to be viable in this line of business. Lancasters said it’s a valid question that should beg all molecular diagnostics companies to pause, not just Myriad. His advice? “Unless there is clear line of sight for a viable business, then no molecular diagnostic company is going to get into—or stay in the space.”
Fortunately, as healthcare undergoes its transition to a value-based model, and as more doctors learn about the benefits of using an FDA-approved test, there is reason for optimism among diagnostic developers.
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