The promise of personalized medicine so far has focused mainly on oncology treatments. The FDA approved two therapies that both came to market with companion diagnostics in 2011, more than a decade after the agency first approved Herceptin for women with metastatic breast cancer whose tumors were HER2-positive, which tend to be more aggressive than other forms.
Roche's Zelboraf targets patients with advanced melanoma who have the BRAF V600E gene mutation. Xalkori, developed by Pfizer, is aimed at patients with advanced non-small-cell lung cancer whose tumors over-express the ALK gene.
“We're still guessing if something is going to work,” says Edward Abrahams, president of the Personalized Medicine Coalition, a Washington-based not-for-profit organization. “With these new diagnostics, the so-called companion diagnostics, we're better able to figure out who's going to better respond. When you're dealing with expensive and toxic drugs, you want to know.”
Proponents such as the Personalized Medicine Coalition say that targeted therapies can increase efficacy and reduce side effects for patients. In addition, by targeting a smaller patient population, the therapies could lead to shorter and less expensive clinical trials.
However, the drugs that have been brought to market with companion diagnostics over the past few years have come at exorbitant prices. The estimated cost over six months of treatment for patients receiving Zelboraf is $61,400, or about $10,200 a month. Pfizer's Xalkori costs about $10,350 a month.
Zelboraf could be used for about 40% to 70% of the population with metastatic melanoma. However, “the vast majority of patients will eventually develop resistance to the therapy,” the ECRI Institute reported in 2012. Xalkori targets a much smaller subset—only about 4% to 7% of patients with non-small-cell lung cancer who have the specified gene.
Another Roche drug that was approved by the FDA in February is Kadcyla, which targets women who were previously treated for HER2-positive metastatic breast cancer. The drug was approved alongside two tests developed by Dako, a Danish cancer diagnostic firm acquired last year by Agilent Technologies for $2.2 billion. Kadcyla costs $9,800 a month, with the average course of treatment lasting about nine months.
“That's pretty expensive,” says Dr. Sandra Swain, president of the American Society of Clinical Oncology and the medical director of MedStar Washington (D.C.) Hospital Center's cancer institute. “Something has got to be figured out in the future. Our system can't bear that much expense if each one keeps coming out at $10,000 a month.”
A Roche spokeswoman says the company looked at four factors when setting the price points for Kadcyla and Zelboraf: how well the medicine works; what other therapies are used to treat the same disease; the amount of money needed to pursue development of new medicines for life-threatening diseases; and how to ensure that the drugs reach patients who need them regardless of their ability to pay.
“It's not unit cost that matters,” the Personalized Medicine Coalition's Abrahams says. “It's the overall cost to the insurer. The insurer has got to know in advance that new therapies, even if they come with a hefty price tag, are only going to those patients who will benefit. That's the attraction of these new therapies to the payer.”
Swain says she remains hopeful that more targeted therapies will reduce research and developments costs for drugmakers, as well as cut down on the lengths of clinical trials and produce more specificity in treatment.
In general, providers and payers have become increasingly concerned about the rising costs of oncology treatments and how they are reimbursed.
“If insurers, including the government, don't want to pay for particular products, they are not going to be developed,” Abrahams says. “We're in a new era of cost restraints where insurers, including the government, are rightly looking at utility of new therapies and diagnostic tests and demanding levels of evidence that could impede their development.”
However, new payment models that are beginning to take root might benefit from more targeted therapies. UnitedHealthcare has created five bundled-payment pilot programs where the insurer set up payments based on genetic information for certain oncology treatments. Care of patients who have HER2-positive breast cancer, for instance, receive higher payments.