The main macroeconomic trends shaping the precision and personalized medicine field over the next 12 to 24 months are presented in this article.
1) The reimbursement challenges
The promise of diagnostic tests to offer patients personalized treatment and saving lives is high. While the number of diagnostic biomarkers that are discovered is growing exponentially, the costs for various tests, including genetic sequencing is dropping. Yet, to be introduced in the healthcare system, the payers require solid positive clinical data and robust health technology assessments. This leads to the fact that more clinical trials and data are required to prove the value of each diagnostic test. First, each diagnostic test must walk the fine line between specificity and sensitivity, to ensure that it delivers true positives and minimizes false positives. Second, the diagnostic outcome needs to be matched to a diseases indication for which it can make a true difference in the treatment decisions in the daily clinical practice. Last, the precision diagnostic needs to be evaluated for its power to avoid potential adverse events, reduce unnecessary hospitalizations and outpatient costs. As a result, we are facing long development timelines and expensive product development paths to make precision diagnostics available.
Convincing payers that precision and personalized medicine is a worthwhile expense that will reduce long-term costs is an ongoing battle. To advance the field, a joint effort from all stakeholders – including innovative companies, reimbursement parties, regulators, and clinicians is needed. Nowadays, some tests are approved for reimbursement, while others are not, however reimbursement could help promoting precision and personalized medicine, and will ultimately save costs.
2) Decreasing the cost of (genetic) testing
The cost of genetic sequencing is rapidly decreasing due to innovative technologies developed and the competitive landscape. Especially the transition from Sanger-based (dideoxy chain termination sequencing) to ‘second generation’ (or ‘next-generation’) DNA sequencing technologies around 2008, is a major driver between the single genome cost of €100 million in 2001 and to less than €1,000 today. In general, the cost of DNA sequencing has steadily decreased since the introduction of Next Generation Sequencing (NGS), regardless of the platform type or technology. Overall sequencing costs have stabilized, and high-throughput platforms have become widely available, resulting in broader use of whole-genome sequencing.
Next to sequencing, the detection of molecular biomarkers has advanced tremendously. Especially the development of integrated photonics (integrated photonic networks on a single silicon chip) opens the door to effective and affordable point-of-care diagnostics and allow multiplexing to cover complex molecular diagnostics.
The reduced cost of (genetic based) diagnostic tests allow broader market access, which drives market growth. New diagnostic tests will need to follow this trend and make use of the latest technologies to ensure cost-effectiveness and compatibility with existing platform technologies.
3) Collaboration between diagnostic and pharmaceutical companies
In most countries, delayed reimbursement and funding of diagnostics is a key barrier to identify patients, and to enable subsequent access to precision medicine. As a result, diagnostic manufacturers typically are reluctant to invest in diagnostic equipment, therefore they create alliances with pharmaceutical companies. Some pharmaceutical companies have brought diagnostics under their own roof through mergers and acquisitions (M&As). For example, Roche acquired Ventana Medical Systems in 2008. In April 2018, Illumina announced a partnership with pharmaceutical conglomerate Bristol Myers Squibb (BMS) to commercialize their in vitro diagnostic assay in support of BMS’s oncology portfolio.
Through partnerships between diagnostics and pharmaceutical companies, the pharmaceutical company gets access to the proprietary diagnostic platform, can identify patients for trials, and utilizes technical and regulatory expertise in areas such as compliance with medical device regulations. Also, the diagnostic company gets its product tested and validated in many patients by the pharmaceutical company. However, pharmaceutical companies are only incentivized to develop such companion tests if their drug may not pass EMA (European Medicines Agency)/FDA scrutiny without it. This affects the diagnostic equipment market and requires diagnostic companies to carefully assess if and who their potential deal partner could be.
Data Source: Global Data
