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Navigating Companion Diagnostics (CDx) – Multiple Stakeholders, Many Goals

August 25, 2021
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Background

Companion diagnostic (CDx) tests are a foundational tool in precision medicine, helping ensure only the right patients receive the right therapies. The past several years have seen an explosion in the number of FDA-approved CDx’s in cancer, helping usher in the latest generation of targeted therapies and I/O treatments to patients around the world. Despite the growing adoption of CDx test infrastructure, research programs, and reimbursement, these tests still walk a fine line today to appease the numerous stakeholders involved in their development and use. On one side, selecting patients with CDx tests can vastly improve therapeutic efficacy, rescuing therapies that may otherwise fail in an all-comer population. On the other hand, CDx tests inherently limit addressable patient populations and depending on the test, can increase the cost and workflow burden during diagnostic work-up.When considering the different stakeholders who develop and benefit from CDx tests, their motivations and specific needs can vary widely. Outlined below is a summary of the top three priorities / needs for CDx tests among (1) biopharma, (2) diagnostic developers, (3) payers / insurance companies, and (4) patients.

Varying CDx Needs

Among the many unique and varied test needs held by stakeholders (Figure 1), the key unifying requirement of CDx tests is demonstrated clinical utility. To justify the time, expense, and diagnostic workflow complexity of introducing a new test, CDx’s need to offer clear clinical value to patients with the prerequisite biomarkers. In this regard, CDx clinical utility is essentially a go/no-go threshold all new tests must pass, and after which the test needs held by stakeholders are much more fragmented.

Figure 1. Overview of the key priorities / needs for CDx tests across key stakeholder segments

Biopharma / Therapeutic Developers – CDx tests may limit patient eligibility for therapies, but their inclusion is a vital strategy to boosting drug efficacy that may otherwise be uncompelling in a broader population.

  1. Less Restrictive Markers Drug developers (i.e. pharma) prefer approvals that maximize addressable patient populations; in many cases, CDx tests limit patient eligibility, and biomarker agnostic approvals are favored when clinical evidence supports them.
  2. Globally Scalable – While many CDx tests may enter the U.S. market as a laboratory-developed test (LDT), biopharma developers generally have aspirations for global distribution, and many geographies have less centralized test infrastructure compared to the U.S. Factors such as workflow complexity, test-kit compatibility, patient sample needs, and technology install base are all key considerations.
  3. CDx Predictive Utility Supports Regulatory Filing Many precision medicine drugs do not benefit the majority of patients, and without a CDx test, drug efficacy rates can be very low. CDx tests enrich for patients who are more likely to respond to treatment, boosting reported efficacy, and making FDA filing more compelling.

Diagnostic Developers / Vendors – Opposite of biopharma, CDx developers generally benefit from tests that offer some level of patient segmentation and allows clinical utility to be emphasized in a biomarker selected cohort, even if that cohort is very small but clinical benefits are well established (e.g. EGFR / NTRK mutated cancers). Securing reimbursement and sustained competitiveness of tests are pervasive problems.

  1. Clinical Utility in Biomarker Selected Populations – Biomarkers with low incidence rates are still highly favorable to test developers if the clinical benefits help cement the test as a standard of care / first-line tool for a broader patient pool. As an example, <1% of cancer patients have NTRK mutations but this marker is broadly tested for in advanced cancer patients; patients with these mutations have a >75% positive response rate.
  2. Favorable Reimbursement – The economic incentives of CDx testing are an ongoing struggle to test developers. The ideal is to secure new CPT billing codes that exceed the cost of performing the CDx test and the (typically) high cost of bringing a new test to market via FDA PMA, but many developers need to operate at thin margins or at a loss based on existing codes today.
  3. Competitive Differentiation – Many innovative Dx companies bring a CDx test to market just to pave the way for fast-followers to introduce equivalent tests at a fraction of the time and cost. Factors such as better customer service, faster turnaround times, or proprietary algorithms that cannot be replicated are key considerations to enduring test competitiveness.

Payers / Insurance Providers  – Public payers and insurance companies have split interests when it comes to CDx testing; CDx approvals mean more tests need to be regularly reimbursed, but these tests also serve as a safeguard against paying for drugs that may have limited or no efficacy.

  1. Positive Health Economic Outcomes – CDx testing is a key tool in delivering ‘value-based medicine’; patients with the prerequisite biomarkers are much more likely to receive clinical value from the associated therapy vs an unselected patient, potentially lowering the cost of follow-on care they may need to receive.
  2. Reduce Payments for Ineffective Therapies CDx tests serve as a form of pre-authorization for subsequent drug delivery, and with the cost of precision medicine drugs easily exceeding 100X that of CDx tests, this can lead to significant payer savings.
  3. Reduce the Need for Additional Future Testing – While most CDx reimbursement is still based on the model of “one test, one biomarker, one drug”, the expanding menu of CDx guided therapies is making the value proposition of multiplex panels and multi-modal test workflows increasingly attractive when a patient is first diagnosed. As an example, many patients may receive a single-plex PCR test when first diagnosed with cancer, but if they progress, then a large panel NGS test may be ordered later; there would be cost, tissue, and time savings to just order the NGS test at the start.

Patients – Improved clinical outcomes are the key patient requirement for CDx tests, which can be fulfilled at multiple stages of their clinical journey based on the amount of data / number of biomarkers collected for clinical decision support.

  1. Improved Clinical Outcomes – The principal requirement of a CDx test from the patient’s perspective is it improves their clinical outcomes. Especially for late-stage (stage IIIB-IV) cancer patients, many biomarker-guided therapies have demonstrated superior outcomes vs untargeted chemo/radiation standards of care.
  2. Inform Future Tx rounds / Clinical Trials – While CDx guided Tx advances have had compelling success over the past several years, for many patients, cancer is an ongoing battle that will require multiple lines of treatment. CDx tests that not only inform immediate treatment but also provide biomarker data relevant to future treatment lines or clinical trials can provide life-saving information should a patient’s cancer progress / advance.
  3. If Not Reimbursed, Low-Cost Tests – CDx tests are increasingly being paid for by insurance companies, but the cost burden falling on patients is still alarmingly common. Particularly in the fragmented payer system of the U.S., low-cost CDx tests (<$500) can be a game-changing path to the latest generation of precision medicines.
Conclusion

There is a broad mosaic of needs and motivations for CDx testing among various clinical and test stakeholders, which in some cases can produce conflicting interests. Most notable is the balance between reducing eligible patient populations in exchange for better clinical efficacy. This is a line that biopharma and diagnostic developers navigate together, and to the benefit of all, CDx and drug development are becoming more tightly coordinated.We are still in the earliest phases of CDx testing, where single biomarkers with generally low predictive value are leading to approvals in stage III-IV cancers. With technical improvements like multiplexing, real-world data mining, and monitoring (i.e. MRD), future CDx tests have the potential to be integrated into every stage of cancer care. Looking forward, successful CDx tests and their associated therapies must fulfill the needs of all stakeholders, making this field of study one most multi-disciplinary and collaborative amongst precision medicine.

Authors
Colin Enderlein
Senior Project Leader
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