Personalised Medicine (or “the right drug and dosage at the right time for the right patient”) has frequently been touted as a potential cure for the troubled blockbuster business model. Initially, expectations were high, if not outright unrealistic. After a few initial success stories such as Herceptin and HIV viral resistance testing, many industry observers have been waiting for the next round of drug plus diagnostic test combos to come to the market that would substantially modify pharma and diagnostics business, and pricing models. But the road has proven to be a rocky one, illustrated by the case of the EGFR drugs (Erbitux, Tarceva, Iressa) where promising leads (receptor polymorphisms) have not yet translated into clinically relevant applications.
The technical difficulties remain enormous: be it marker statistics, or the challenge of differentiating a truly predictive marker for a given drug’s efficacy from a prognostic marker for disease progression. At many pharmaceutical companies the grand business model visions around Personalised Medicine have been downscaled to biobanking initiatives and using biomarkers in early development for picking up early signs of activity (the new buzzword is “translational medicine”). Many of the diagnostics companies that have tried to position themselves as Personalised Medicine players have come to realise that most value capture will remain with the drug. Dx prices are essentially being locked-in at a level that is far below drugs and most deals between Dx and Rx have been fee-for-service.
At Catenion, we believe that new platform technologies tend to go through different stages in their adoption. After the initial euphoria had worn off, Personalised Medicine has been in a state of depression for the last few years. Following the path of other technologies (e.g. monoclonal antibodies), Personalised Medicine is now entering into a phase of pragmatic acceptance as biomarkers and diagnostic tests are slowly but steadily penetrating drug development and clinical practice with the regulatory frameworks being developed. Business model challenges are still manyfold — from the impact that a Personalised Medicine approach has on the traditional R&D process, to the pricing and distribution of drug plus test combos; in many cases new ground will have to be broken.
Catenion has helped leading and emerging players in the pharmaceutical and diagnostics industries establish strategies that take into account the technical issues as well as business model aspects.