FDAnews Drug Daily Bulletin


April 12, 2006

Like its larger pharmaceutical brethren, the biotechnology sector is focusing on the creation of more personalized medicine -- but biotech firms are also struggling with the question of who will pay for the diagnostics the new development model will demand.

Biotechnology firms believe personalized medicines that base treatment on the particular genetic makeup of patients is the wave of the future, said analyst G. Stephen Burrill, CEO of Burrill & Company.

Predictive medicines that can be expected to be more effective with certain subgroups based on their genetic makeup are "the holy grail" for the biotech industry, he told attendees during the Biotechnology Industry Organization's 2006 annual conference. "That's where the great opportunity for this industry is."

The pharmaceutical industry has reached the same conclusion. Personalized medicines are "going to be the success model of the future," Billy Tauzin, PhRMA's president and CEO, told FDAnews. As scientists come to better understand the biology of disease, companies will be better able to develop medicines that are effective for certain groups, he added.

But the driver for this move is not just technological advances that allow scientists to isolate the genetic bases for a disease, Burrill said. The payer community is also taking a leading role, "demanding" the development of technologies that assure a drug will be effective for a certain group.

This shift includes a greater role for the Centers for Medicare & Medicaid Services (CMS), as more and more of the personalized treatments are covered by Medicare, he added. The federal government will be paying for 80 percent of the public's healthcare bill within the next five years, Burrill said.

But with this opportunity comes a greater burden on the biotech industry. As personalized medicine becomes more widespread, there will be more regulatory requirements for diagnostics to ensure these drugs do what they're supposed to do, Burrill added.

He predicted the FDA will use its Critical Path Initiative to institute more requirements for diagnostics. "If you're going to see a drug approved at the FDA in the United States today, you'd better have the diagnostic attached to it to identify the groups that will benefit," he said. Regulatory oversight "will change dramatically," he added.

Increased regulatory oversight is one of the big issues industry faces in developing personalized medicines, Peter Winter, a Burrill & Company spokesman, told FDAnews. This issue is on the biotechnology sector's "radar screen," he added.

Biotechnology firms will focus not only on how to address this additional regulatory burden, but also on who will pay for the diagnostic tests, he added. Industry will push CMS to reimburse the tests, Winter said.

This push by industry to address potential regulatory oversight comes as advocacy groups have been calling on the CMS to make such changes. Advocates from the Genetics & Public Policy Center (GPPC) argue the CMS has been dragging its feet in issuing a rule to establish standards for these tests. (http://www.fdanews.com/did/5_70/)