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Financial returns: The missing link in personalized medicine

2011 December 12
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by Guest Commentator

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.

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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)

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This post was submitted as part of the guest commentary series: What is the biggest challenge facing personalized medicine in Canada? __________________________________________________________________________________

Guest Commentary Series: Personalized Medicine in Canada

2011 December 9
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by Allie Janson Hazell

As part of the launch of our new initiative, The GenoScape is running a guest commentary series throughout the week of December 12-16. We’ve asked Canadian thought leaders in the fields of genomics and personalized medicine to answer the following question:

What is the biggest challenge facing personalized medicine in Canada?

 

The goal of this series is to identify the wide array of unique challenges, and we are thrilled with the collection of submissions that we’ve received from representatives in clinical, research, law & ethics and policy. The series features commentaries from industry leaders such as Stephen Scherer, Clarissa Desjardins and Kathy Siminovitch, to name a few. While each of the submissions is interesting and informative individually, we think you’ll agree that collectively the submissions provide a refreshingly well-rounded and insightful look at a multifaceted issue. 

Published series submissions:

Bringing the Consumer and Clinical Voice into the Genomics Circle

2011 December 5
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by Allie Janson Hazell

Canada is credited with its fair share of historic breakthroughs in medicine, and the modern fields of genetics and genomics are no exception.  Whether it is the discovery of the gene responsible for cystic fibrosis or contributing to world-renowned research in autism, Canadian researchers make a global impact. Today an impressive group of organizations are leading the genomic movement within Canada, including Genome Canada, CEPMED and the The Centre for Applied Genomics (TGAC), to name a few.

The Clinical Voice is Lacking

One piece of the puzzle that is largely missing in the Canadian genomics sphere is a clinical point of view.  To truly understand the potential of genomics from a ‘future of health’ perspective, it is crucial to bring the changing consumer and clinician voice into the fold.

Medcan Genetics Experience and Positioning

At Medcan we have the unique experience of offering genomic testing within the context of the primary care setting. Through our daily experiences, we see first-hand how consumers react to and incorporate genomic information into their understanding of their own health. We work side-by-side with primary care physicians who are learning how to use this information in their practice. And we collaborate with genomic researchers and personalized medicine organizations to augment the delivery of our services and the sustainability of our program.

The GenoScape: Mission

The GenoScape was created to elevate the distinct positioning we are afforded at the Medcan genetics clinic, to further the discussion and advancement of personalized medicine in Canada. Using social media, we plan to feature the projects and unique perspectives of our clients, partners and respected global experts. By increasing the transparency of our on-going collaborations we hope to further professional dialogue and foster new connections between clinicians, researchers, policy-makers and consumers.

We continue to learn from our interactions with a diverse set of stakeholders. Our experiences with our clientsCircle of hands (consumers), our colleagues and the network of genomics researchers, both within Canada and abroad, has helped to better our understanding of the potential of Genomics and Personalized Medicine. While we continue to learn from our partners, our hope is that this resource offers something back in exchange.

Join us and join in as we navigate the Canadian genomics landscape.

 

Photo credit here.

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