PCAST Report: Priorities for Personalized Medicine

Presidents Council of Advisors on Science and Technology (PCAST) Member Member Chair, Subcommittee on Personalized Medicine Chair, Subcommittee on Personalized Medicine 1. Study commenced January Report Published September 2008, met with President and Congressional Staff September 16 and 17, _report_v2.pdf

Presidents Council of Advisors on Science and Technology (PCAST) Personalized Medicine Subcommittee Personalized Medicine Subcommittee hosted more than ten meetings and workshops hosted more than ten meetings and workshops over 110 individuals participated over 110 individuals participated Representatives from: Representatives from: Academic institutions, diagnostic, DTC, service and imaging companies Academic institutions, diagnostic, DTC, service and imaging companies Biotech, pharma, tools, IT companies Biotech, pharma, tools, IT companies Insurance companies and providers Insurance companies and providers Patient advocates Patient advocates VCs, trade and professional associations, govt agencies VCs, trade and professional associations, govt agencies

Policy Areas Studied by PCAST 1. Regulation of therapies and diagnostics by FDA, CMS; 2. Reimbursement of therapies and diagnostics by CMS and private insurance companies; 3. Genomic diagnostics, intellectual property and related emerging patent issues (PTO); 4. Patient privacy; 5. Information technology and issues of electronic patient records and associated data/databases; 6. Economics of personalized medicine; 7. Personalized medicine technology/tools; 8. Patient, physician and public education.

PCAST Findings High level of policy interest attributable to promise of improved patient care and disease prevention, plus potential to positively impact increasing cost of healthcare and decreasing rate of new medical product development; High level of policy interest attributable to promise of improved patient care and disease prevention, plus potential to positively impact increasing cost of healthcare and decreasing rate of new medical product development; Ability to distinguish patients most likely to benefit from treatment or suffer harm should improve quality of care and result in cost savings ; Ability to distinguish patients most likely to benefit from treatment or suffer harm should improve quality of care and result in cost savings ; Ability to stratify patients by disease susceptibility or likely response to treatment could reduce size, duration and cost of clinical trials to facilitate treatment, diagnostic and prevention strategies development. Ability to stratify patients by disease susceptibility or likely response to treatment could reduce size, duration and cost of clinical trials to facilitate treatment, diagnostic and prevention strategies development.

PCAST Findings Identified specific policy actions related to genomics-based molecular diagnostics with greatest potential to accelerate progress in personalized medicine; Identified specific policy actions related to genomics-based molecular diagnostics with greatest potential to accelerate progress in personalized medicine; Parallel developments in genomics-linked therapeutics also important, though pace of change in molecular diagnostics most rapid and policy hurdles greatest in the latter at present time; Parallel developments in genomics-linked therapeutics also important, though pace of change in molecular diagnostics most rapid and policy hurdles greatest in the latter at present time;

PCAST Findings--continued Narrowed policy recommendations to three areas: technology/tools, regulation and reimbursement; Narrowed policy recommendations to three areas: technology/tools, regulation and reimbursement; Other areas, while very important to long term progress, deemed less urgent due to: Other areas, while very important to long term progress, deemed less urgent due to: Significant ongoing government activity (information technology and privacy) Significant ongoing government activity (information technology and privacy) Early stage of personalized medicine development (physician and patient education and economics) or Early stage of personalized medicine development (physician and patient education and economics) or Need for more comprehensive policy recommendations beyond the scope of personalized medicine (intellectual property and privacy). Need for more comprehensive policy recommendations beyond the scope of personalized medicine (intellectual property and privacy).

PCAST Findings: Technology and Tools Challenges to validating genomic/clinical correlations necessary to advance products into clinical use; Challenges to validating genomic/clinical correlations necessary to advance products into clinical use; Concerns for imbalance between discovery and validation. Concerns for imbalance between discovery and validation.

PCAST Recommendations: Technology and Tools Federal government should develop strategic long- term plan by coordinating public and private sector efforts to advance R&D; Federal government should develop strategic long- term plan by coordinating public and private sector efforts to advance R&D; HHS should lead effort to create public/private Personalized Medicine R&D Roadmap; HHS should lead effort to create public/private Personalized Medicine R&D Roadmap; NIH, DOE and other agencies should evaluate relative funding for discovery versus translational research relevant to personalized medicine; NIH, DOE and other agencies should evaluate relative funding for discovery versus translational research relevant to personalized medicine; NIH should coordinate process to identify and prioritize diseases and common therapies that would benefit from applications of genomics-based molecular diagnostics. NIH should coordinate process to identify and prioritize diseases and common therapies that would benefit from applications of genomics-based molecular diagnostics.

PCAST Recommendations: Technology and Tools Federal government should make critical investments in enabling tools and resources moving beyond genomic discoveries to personalized medicine products and services of patient and public benefit; Federal government should make critical investments in enabling tools and resources moving beyond genomic discoveries to personalized medicine products and services of patient and public benefit; NIH should spearhead public and private efforts to develop a nationwide network of standardized biospecimen repositories; NIH should spearhead public and private efforts to develop a nationwide network of standardized biospecimen repositories; NIH should promote methods for validating the clinical utility of molecular diagnostics based on genomic correlations with disease; NIH should promote methods for validating the clinical utility of molecular diagnostics based on genomic correlations with disease; NIH should establish large US population cohort for investigating genetic and environmental health impacts. NIH should establish large US population cohort for investigating genetic and environmental health impacts.

PCAST Findings: Regulation FDA progress via Guidances to defining approach to regulation of genomics-based molecular diagnostics, with following outstanding issues: FDA progress via Guidances to defining approach to regulation of genomics-based molecular diagnostics, with following outstanding issues: Risk definition for device versus information Risk definition for device versus information Standards for study design and product performance Standards for study design and product performance Coordination between CLIA (CMS) and FDA Coordination between CLIA (CMS) and FDA Regulatory approach to co-development Regulatory approach to co-development Criteria and procedures for therapy labeling with diagnostic information Criteria and procedures for therapy labeling with diagnostic information Regulatory approach to Clinical Decision Support Systems Regulatory approach to Clinical Decision Support Systems

PCAST Recommendations: Regulation FDA should implement more transparent, iterative approach to regulation: FDA should implement more transparent, iterative approach to regulation: Final guidance for IVDMIAs should clarify risk definition Final guidance for IVDMIAs should clarify risk definition FDA and CMS should clarify roles and potential regulatory redundancy FDA and CMS should clarify roles and potential regulatory redundancy FDA should finalize draft co-development paper FDA should finalize draft co-development paper FDA should clarify criteria and procedures for incorporating genetic data on labels for therapeutics FDA should clarify criteria and procedures for incorporating genetic data on labels for therapeutics FDA should issue Guidance for regulation of automated Clinical Decision Support Systems FDA should issue Guidance for regulation of automated Clinical Decision Support Systems

PCAST Recommendations: Regulation FDA Critical Path should be funded to include support of personalized medicine progress: FDA Critical Path should be funded to include support of personalized medicine progress: Biomarkers to facilitate product development, clinical trial design and validation for molecular diagnostics should be priority; Biomarkers to facilitate product development, clinical trial design and validation for molecular diagnostics should be priority; Reagan-Udall should be funded and expanded to include venture capital and molecular diagnostic company representation. Reagan-Udall should be funded and expanded to include venture capital and molecular diagnostic company representation.

PCAST Recommendations: Regulation Industry should adopt proactive and constructive role with FDA to fulfill its regulatory responsibilities: Industry should adopt proactive and constructive role with FDA to fulfill its regulatory responsibilities: When possible, responses to draft guidances should include alternative approaches; When possible, responses to draft guidances should include alternative approaches; Industry should provide FDA with annual projections for number and type of products in development pipeline to better address staffing and resource needs. Industry should provide FDA with annual projections for number and type of products in development pipeline to better address staffing and resource needs.

PCAST Findings: Reimbursement Three challenges to meeting cost-containment objectives and not obstructing molecular diagnostic progress: Three challenges to meeting cost-containment objectives and not obstructing molecular diagnostic progress: Reimbursement based upon historical low-margin commodity pricing; Reimbursement based upon historical low-margin commodity pricing; Need for standards related to evidence development; Need for standards related to evidence development; Procedural hurdles associated with coding systems, bundled payment systems and complex billing procedures. Procedural hurdles associated with coding systems, bundled payment systems and complex billing procedures.

PCAST Recommendations: Reimbursement Public and private payors should determine coverage policies and payment rates for genomic molecular diagnostics in light of their overall impact on patient care demonstrated by evidence from clinical trails and other studies: Public and private payors should determine coverage policies and payment rates for genomic molecular diagnostics in light of their overall impact on patient care demonstrated by evidence from clinical trails and other studies: Reimbursement should be commensurate with clinical benefits and payors should collaborate in establishing more flexible coding approaches; Reimbursement should be commensurate with clinical benefits and payors should collaborate in establishing more flexible coding approaches; Payors should collaborate to expand coverage with evidence development programs; Payors should collaborate to expand coverage with evidence development programs; Payors should collaborate in developing standards for evidence requirements from clinical trials. Payors should collaborate in developing standards for evidence requirements from clinical trials.

PCAST Findings and Recommendations: HHS Coordination Secretary Leavitt encouraged the progress of personalized medicine at many federal agencies within HHS; Secretary Leavitt encouraged the progress of personalized medicine at many federal agencies within HHS; Continuity is important to realizing the long term promise of personalized medicine and to make the most effective use of limited resources; Continuity is important to realizing the long term promise of personalized medicine and to make the most effective use of limited resources; HHS should establish a Personalized Medicine Coordination Office (PMCO): HHS should establish a Personalized Medicine Coordination Office (PMCO): PMCO should facilitate progress while ensuring safety, efficacy and utility and PMCO should facilitate progress while ensuring safety, efficacy and utility and Monitor progress to ensure all HHS agencies address emerging needs. Monitor progress to ensure all HHS agencies address emerging needs.

Personalized Medicine: Projected Diagnostic Product Pipeline Survey conducted by Coalition for 21 st Century Medicine provided to FDA in May 2007 in response to Guidances on IVDMIAs and ASRs: Survey conducted by Coalition for 21 st Century Medicine provided to FDA in May 2007 in response to Guidances on IVDMIAs and ASRs: 70 commercial, academic and private research laboratories developing nearly 200 unique tests qualifying as IVDMIAs 70 commercial, academic and private research laboratories developing nearly 200 unique tests qualifying as IVDMIAs Include Laboratory Developed Tests serving as treatment decision tools for 20 cancers, as well as prediction tools incorporating lab and other data for patient specific values to predict conditions, outcomes, or risks Include Laboratory Developed Tests serving as treatment decision tools for 20 cancers, as well as prediction tools incorporating lab and other data for patient specific values to predict conditions, outcomes, or risks

Personalized Medicine: Progress Overview Genomic-based molecular diagnostics represent a first wave of personalized medicine toolsforcing active dialogue on regulation and reimbursement; Genomic-based molecular diagnostics represent a first wave of personalized medicine toolsforcing active dialogue on regulation and reimbursement; Most pharmaceutical and biopharmaceutical companies now have biomarker programs associated with early drug R&D, some with companion products in pipeline; Most pharmaceutical and biopharmaceutical companies now have biomarker programs associated with early drug R&D, some with companion products in pipeline; FDA is actively integrating personalized medicine into clinical trial design; over 200 drug labels have genetic info FDA is actively integrating personalized medicine into clinical trial design; over 200 drug labels have genetic info Programs in multiple federal agencies should facilitate personalized medicine progress (e.g. AHIC and PHR, EMR); Programs in multiple federal agencies should facilitate personalized medicine progress (e.g. AHIC and PHR, EMR);

Personalized Medicine: Progress Overview Imaging/diagnostic companies are making a significant commitment to field, with new imaging products expected in pipeline; Imaging/diagnostic companies are making a significant commitment to field, with new imaging products expected in pipeline; Community based delivery systems are integrating personalized medicine into research and patient care; Community based delivery systems are integrating personalized medicine into research and patient care; Teaching and research institutions are collaborating to create delivery systems that exchange laboratory and other patient data between/among institutions; Teaching and research institutions are collaborating to create delivery systems that exchange laboratory and other patient data between/among institutions; Community, teaching institutions and companies are developing Clinical Decision Support Systems to facilitate uptake of complicated genomic data into patient care; Community, teaching institutions and companies are developing Clinical Decision Support Systems to facilitate uptake of complicated genomic data into patient care; Consumer oriented IT companies are providing new electronic patient records to provide control and access to individuals. Consumer oriented IT companies are providing new electronic patient records to provide control and access to individuals.

Personalized Medicine: PCAST Conclusion Personalized Medicine is changing the way we think about diagnostic information in patient care: Personalized Medicine is changing the way we think about diagnostic information in patient care: Patient stratification to enhance quality of care, whether by genomic technology or other means, will become more widely implemented in the coming years; Patient stratification to enhance quality of care, whether by genomic technology or other means, will become more widely implemented in the coming years; New molecular technologies are raising the visibility of the relative value of critical diagnostic information versus that of treatment; New molecular technologies are raising the visibility of the relative value of critical diagnostic information versus that of treatment; Evidence development will play a key role in how the value proposition is sorted out. Evidence development will play a key role in how the value proposition is sorted out.

Recent EventsPotential to Influence California Perspective American Recovery Reinvestment Act provides $1.1B in Cost Effectiveness Research (CER), $19B to accelerate adoption of HIT systems by doctors and hospitals, plus $1B for Prevention and Wellness Fund; American Recovery Reinvestment Act provides $1.1B in Cost Effectiveness Research (CER), $19B to accelerate adoption of HIT systems by doctors and hospitals, plus $1B for Prevention and Wellness Fund; New genomics position in FDAs Office of Chief Scientist announced February 5, 2009 New genomics position in FDAs Office of Chief Scientist announced February 5, 2009 Deloitte ROI report January 2009 Deloitte ROI report January 2009 CMS evaluating 2 personalized medicine NCDs in 2009 CMS evaluating 2 personalized medicine NCDs in 2009 Private sector efforts to accelerate patient stratification, e.g. First Medco publication: heart attack risk with Plavix and PPIs, November 2008 Private sector efforts to accelerate patient stratification, e.g. First Medco publication: heart attack risk with Plavix and PPIs, November 2008

2009 California Biomedical Industry 2,042 California biomedical companies 2,042 California biomedical companies $74.5 billion total estimated revenues $74.5 billion total estimated revenues 271,000 total estimated employees 271,000 total estimated employees $20.3 billion estimated wages and salaries $20.3 billion estimated wages and salaries Nearly $75,000 average wage Nearly $75,000 average wage $3.2 billion total NIH grants awarded $3.2 billion total NIH grants awarded $4.3 billion total est. venture capital investment $4.3 billion total est. venture capital investment_____________ California Biomedical Industry 2009 Report, California Healthcare Institute and PricewaterhouseCoopers LLP.

Californias Personalized Medicine Industry California companies represent majority of new molecular diagnostic firms; California companies represent majority of new molecular diagnostic firms; Bay Bio lists 101 companies representing all areas (i.e. therapy, diagnostics, tools, DTC, etc.); Bay Bio lists 101 companies representing all areas (i.e. therapy, diagnostics, tools, DTC, etc.); Most active California VCs (3) financed 15+ companies with ~1000 employees; Most active California VCs (3) financed 15+ companies with ~1000 employees; 2 largest molecular diagnostic firms 2008 combined revenue ~$170+ Million and 600+ employees. 2 largest molecular diagnostic firms 2008 combined revenue ~$170+ Million and 600+ employees.

Current Private Sector Investment Environment Limited access to capital; pressure on long-term R&D spending and efficiency at all sizes of companies; Limited access to capital; pressure on long-term R&D spending and efficiency at all sizes of companies; Potential healthcare reform, increasing risk of margin erosion and reducing pharma policy influence; Potential healthcare reform, increasing risk of margin erosion and reducing pharma policy influence; Limited liquidity, squeezing venture and innovation; and Limited liquidity, squeezing venture and innovation; and Speed and degree of consolidation unknown. Speed and degree of consolidation unknown.

Role of Personalized Medicine in Future of Californias Biomedical Industry Combination of economic and healthcare crises threatens Californias biomedical industry; Combination of economic and healthcare crises threatens Californias biomedical industry; Personalized medicine represents: Personalized medicine represents: Leading edge of genomics applications Leading edge of genomics applications Tools to facilitate CER Tools to facilitate CER Beneficiary of HIT adoption and Prevention and Wellness Beneficiary of HIT adoption and Prevention and Wellness Laboratory jobs cannot be outsourced internationally provides educational and employment opportunities Laboratory jobs cannot be outsourced internationally provides educational and employment opportunities

California Resources Molecular diagnostics and other companies at front of innovation cycle; Molecular diagnostics and other companies at front of innovation cycle; CIRM; CIRM; CALPERS; CALPERS; UC and State University systeminterests in business, science, legal and employment issues; UC and State University systeminterests in business, science, legal and employment issues; TRANSPERS Center at UCSF catalyzing study of clinical utility, access and economicsplus assembly of representative stakeholders TRANSPERS Center at UCSF catalyzing study of clinical utility, access and economicsplus assembly of representative stakeholders Historically, national delivery-of-care models follow where California leads; Historically, national delivery-of-care models follow where California leads;

Policy/Research Areas to Consider Reminder-- Reminder-- Healthcare has many stakeholders in heavily regulated businesses that are likely to be adverse to change. The status quo serves many constituencies very well.

Policy/Research Areas to Consider Big Picture: Big Picture: Assemble different stakeholders to inform, educate and act; Assemble different stakeholders to inform, educate and act; Implement delivery studies and other pilot programs to better inform policy; Implement delivery studies and other pilot programs to better inform policy; Conform state-funded research programs to provide future access and standards for personalized medicine research; and Conform state-funded research programs to provide future access and standards for personalized medicine research; and Drive privacy, patient consent, access, education and training incentives and standards. Drive privacy, patient consent, access, education and training incentives and standards.