Clarissa Desjardins, Katherine Bonter and Anick Dubois of CEPMED. Cepmed is a non-profit organization dedicated to promoting the science and practice of personalized medicine through research, commercialization and education.
__________________________________________________________________________
Who makes money when personalized medicine tests are sold? In Canada, the answer is unfortunately, no one, which goes a long way toward explaining why we see little implementation of personalized medicine in Canada and few Canadian companies developing personalized medicine tests. However, there are Canadian inventions and tests being sold in the US but not in Canada. One reason for this is that the CMS has pre-existing reimbursement codes such that if a physician orders the test, it is deemed to have a certain value ($450 when you add up all the available codes) and if a company can make money at that price; it can be listed for reimbursement within 3 months. In Canada, no such national reimbursement body exists. To get a test reimbursed takes at least two years to create an entirely new reimbursement code on single provincial registry.
So who cares if Canada doesn’t participate in what is essentially a niche diagnostic market at this stage? For one, in the past 8 years, Canadian tax payers have invested over a billion dollars in medical research related to genetics and biomarkers and this new knowledge has not been successfully translated into economic activity. Second, it takes a private company to finance and manage the process of PM test development through all the hurdles up to commercialization or else, nothing happens. The average time to market for 13 genetic tests in Canada was found to be between 10 and 20 years.
| Steps toward personalized medicine test commercialization |
Goal/Purpose
|
Approximate costs
|
| Discover novel gene-disease associations |
Address an unmet need; protect intellectual property
|
$5-10 million
|
| Develop validated test/demonstrate analytical validity |
Regulatory requirement to perform test
|
$0.5-3 million (depending on platform)
|
| Conduct clinical trials to prove clinical validity |
Regulatory requirement to have test approved for sale
|
$5-10 million (depending on the number of trials, indication)
|
| Prove clinical utility |
Convince physicians of the utility of the test based on better patient outcomes
|
$20-30+ million
|
| Develop pharmacoeconomic data supporting reimbursement |
Convince provincial authorities to reimburse test
|
$5-10 million
|
| Market test |
Build awareness for existence of test and how to order it
|
$5 million +
|
| Total |
|
$40-68 million
|
The cost of PM test development from discovery to marketing can reach $40-60 million dollars. Add to this the technical uncertainty of ever achieving any of these goals, the relatively small size of diagnostic markets, and it’s no wonder few Canadians have succeeded in commercializing PM tests.
Disregard for private companies
Novel gene-disease associations discovered in the laboratory, do not spontaneously appear in the market a few years later. Many in the medical establishment disregard the private companies offering valuable personalized medicine tests which are routine in other countries. Personalized medicine test access is equated with personalized medicine test reimbursement in a zero-sum game of capped medical expenses. The growth of personalized medicine requires the participation of private companies and investors which must make a profit to succeed. This is not just something to be accepted, it must be embraced through proper recognition and reimbursement for innovation.
(Photo credit)
__________________________________________________________________________________
This post was submitted as part of the guest commentary series: What is the biggest challenge facing personalized medicine in Canada? __________________________________________________________________________________
Financial returns: The missing link in personalized medicine
Clarissa Desjardins, Katherine Bonter and Anick Dubois of CEPMED. Cepmed is a non-profit organization dedicated to promoting the science and practice of personalized medicine through research, commercialization and education.
__________________________________________________________________________
Who makes money when personalized medicine tests are sold? In Canada, the answer is unfortunately, no one, which goes a long way toward explaining why we see little implementation of personalized medicine in Canada and few Canadian companies developing personalized medicine tests. However, there are Canadian inventions and tests being sold in the US but not in Canada. One reason for this is that the CMS has pre-existing reimbursement codes such that if a physician orders the test, it is deemed to have a certain value ($450 when you add up all the available codes) and if a company can make money at that price; it can be listed for reimbursement within 3 months. In Canada, no such national reimbursement body exists. To get a test reimbursed takes at least two years to create an entirely new reimbursement code on single provincial registry.
So who cares if Canada doesn’t participate in what is essentially a niche diagnostic market at this stage? For one, in the past 8 years, Canadian tax payers have invested over a billion dollars in medical research related to genetics and biomarkers and this new knowledge has not been successfully translated into economic activity. Second, it takes a private company to finance and manage the process of PM test development through all the hurdles up to commercialization or else, nothing happens. The average time to market for 13 genetic tests in Canada was found to be between 10 and 20 years.
Goal/Purpose
Approximate costs
Address an unmet need; protect intellectual property
$5-10 million
Regulatory requirement to perform test
$0.5-3 million (depending on platform)
Regulatory requirement to have test approved for sale
$5-10 million (depending on the number of trials, indication)
Convince physicians of the utility of the test based on better patient outcomes
$20-30+ million
Convince provincial authorities to reimburse test
$5-10 million
Build awareness for existence of test and how to order it
$5 million +
$40-68 million
The cost of PM test development from discovery to marketing can reach $40-60 million dollars. Add to this the technical uncertainty of ever achieving any of these goals, the relatively small size of diagnostic markets, and it’s no wonder few Canadians have succeeded in commercializing PM tests.
Disregard for private companies
Novel gene-disease associations discovered in the laboratory, do not spontaneously appear in the market a few years later. Many in the medical establishment disregard the private companies offering valuable personalized medicine tests which are routine in other countries. Personalized medicine test access is equated with personalized medicine test reimbursement in a zero-sum game of capped medical expenses. The growth of personalized medicine requires the participation of private companies and investors which must make a profit to succeed. This is not just something to be accepted, it must be embraced through proper recognition and reimbursement for innovation.
(Photo credit)
__________________________________________________________________________________
This post was submitted as part of the guest commentary series: What is the biggest challenge facing personalized medicine in Canada? __________________________________________________________________________________
from → Commentary Series, Personalized Medicine, Policy Issues