Personalised medicine – challenges of authorisation and reimbursement

Personalised medicine – tailoring treatment via companion diagnostics

Personalised medicine is a very promising and cutting-edge approach which we recently discussed from a patent law perspective in our Synapse October edition.

In principle, personalised medicine refers to a classification of individuals into sub-populations that differ in their susceptibility to a particular disease or their response to a specific treatment. Preventive, diagnostic or therapeutic interventions can then be tailored to the individual characteristics of patients who will benefit, sparing expense and side effects to those who will not.

A predictive biomarker – such as a particular genetic characteristic, which is causally linked to the disease – can play a crucial role in classifying patients in sub-populations. As regards the suitable therapy with a medicinal product or a range of medicinal products, so-called companion diagnostics are essential to and specifically intended for the selection of patients with a previously diagnosed condition or predisposition. To date, over 30 “personalised” medicinal products are sold on the German market for which a prior diagnostic test is either mandatory or recommended.

Companion diagnostic tests are a key commercial challenge to the development of personalised medicines. Co-ordinating diagnostic and therapeutic tools in order to tailor medical treatment to the individual may improve the safety and efficacy of a therapy.

In our current follow-up on personalised medicine, we investigate companion diagnostics from an authorisation and reimbursement perspective, focusing on the challenge of having an authorised medicine and a validated, CE-marked and reimbursable companion diagnostic ready for market access at the same time.

The medico-legal challenges

From a medical perspective, the key challenge of a coordinated co-development is to detect clinically useful and predictive biomarkers at an early stage of the drug development process as a sufficient number of patients and a clear understanding of molecular classification are required. Moreover, pressures on pharmaceutical pipelines are high research costs and rigorous approval processes for two different types of products following widely different development, authorisation and reimbursement pathways.

The medicinal product development cycle involves classical exploratory and confirmatory steps taking on average between nine and twelve years and necessitates market authorisation applications either to the national authorities (for approval via the decentralised procedure) or the European Medicines Agency (EMA - for approval via the centralised procedure) in the EU.

By contrast, companion diagnostics as well as other in vitro diagnostics (IVD) are validated in a three to five years’ period demonstrating clinical feasibility and utility via safety and efficacy studies. In Europe, CE marking is required for market access – either following a manufacturer self-assessment (self-certification) or with preliminary review by a Notified Body according to the Directive on In-vitro Diagnostics.

Summarising the legal and regulatory situation, major obstacles include the following:

• Differences in the development and authorisation pathways for medicinal product and companion diagnostic make it difficult to synchronise timing;
• Specific European guidelines for a co-development of both products and co-ordination of approval procedures do not exist. To date, the statements of EMA have remained rather vague:
  • "In the context of drug development it might be possible to include a companion diagnostic within the development programme";
  • "Case concordance between the clinical trial assay and the marketed test [...] would be expected";

Inconsistent terminology and unclear requirements in regard to the co-labelling of medicinal product and companion diagnostic;
Complex and non-standardised life cycle management.

New EU IVD Regulation for the authorisation of CDx

The EU IVD Directive which also applies to the assessment of companion diagnostics is currently under revision and its replacement by a regulation having immediate effect in all EU member states will be negotiated between Council, Parliament and Commission within the next few weeks.

Depending on the final amendments made to the draft, the new EU IVD Regulation aims to improve safety and efficacy by stipulating a compulsory proof of clinical utility for the intended purpose (for CDx: selection of patients with a previously diagnosed condition or predisposition eligible for a targeted therapy) and a clinically validated diagnostic test for the clinical trial of the medicinal product itself. In a risk-based classification of IVD products, companion diagnostics will be categorised as “C risk” on a risk scale of A, B, C and D, with A being the lowest risk. In addition, the draft regulation provides for a certain co-ordination between the CDx assessment procedure and the authorisation of the medicinal product. The latest version of the proposal strengthens the importance of the opinion obtained by the competent medicinal products authority or the EMA and obliges the Notified Body to give due consideration before issuing certification.

The latest draft of the EU IVD Regulation further requires that companion diagnostics may only be supplied on medical prescription EU-wide and explicitly states that advertising of prescription-only devices is to be considered illegal.

In summary, the European approach is a first step in the right direction as it intends to increase safety and transparency and provides a framework for cooperation between EMA and the Notified Bodies. On the other hand, the new regulation will inevitably lead to higher costs and greater efforts for manufacturer; larger investments might impact innovation and limit the ability of (small) innovative companies to enter the companion diagnostic market.

The reimbursement framework in Germany

While the legal frameworks covering the authorisation of medicinal products and medical devices are largely harmonised within the EU, decision-making in pricing and reimbursement matters remain within the competence of each Member State. Here, the reimbursement framework in Germany shall be taken as an example to demonstrate dissimilar pathways for medicinal products on the one hand and companion diagnostics on the other.

The German statutory healthcare system provides patients with access to technologically-advanced products and is a focus market for numerous manufacturers. As the social health insurance system covers approximately 90 per cent of the German population, reimbursement of their products via the statutory insurance system is essential to pharmaceutical and medical devices companies. However, Germany remains a complex market for personalised medicine products: while the medicinal product is usually available right after market authorisation (with a benefit assessment procedure running in parallel, see below), it can take several years until the companion diagnostic is accepted for reimbursement within the statutory healthcare system.

Since January 1st 2011, new pricing regulations have been in place for newly authorised medicinal products and their reimbursement by statutory health insurance providers. The G-BA (a public body comprising the head organisations of doctors, hospitals and the statutory health insurance) and the Institute for Quality and Efficiency in Health Care (IQWiG) conduct benefit assessments of newly authorised medicinal products. Their results form the basis of decisions on the prices statutory health insurance funds pay for pharmaceuticals with new active ingredients.

By contrast, the reimbursement of a companion diagnostic depends on whether it is applied in hospital (inpatient) treatment or ambulatory (outpatient) treatment.

On outpatient basis, reimbursement is only available if the companion diagnostic is listed in a specific catalogue of reimbursable services (EBM - einheitlicher Bewertungsmaßstab), which is often not the case. In addition, the use of a companion diagnostic may fall within the (inconsistent) definition of a novel diagnostic or treatment method (neue Untersuchungs- und Behandlungsmethode). In this event, a separate recommendation of the G-BA is needed before the product can be included in the EBM catalogue. However, this procedure can only be initiated by certain members of the G-BA, the head organisations of doctors and the statutory health insurance as well as patient organisations, while manufacturers are denied this right.

In the inpatient care system, diagnostics are mostly covered by DRG (diagnosis related groups) global case-based payments. Compensation of individual treatment or interventions is not obtainable. Depending on the underlying case-based fee, providers may have to operate under considerable cost pressure, e.g. if the companion diagnostic is very cost-intensive. An alternative for reimbursement would be the “NUB” (novel diagnostic or treatment method) track. Yet, the “NUB” definition is different from the one used for ambulatory treatment and applications have to be made to a special institute (InEK - Institut für das Entgeltsystem im Krankenhaus GmbH) by each individual hospital. The final decision on reimbursement is made by local health insurances that might anticipate cost increases for companion diagnostics and often take a restrictive approach as far as the reimbursement of new diagnostic or treatment methods is concerned.

Conclusion

With personalised medicine playing an important role in determining which therapies are the safest and most effective for a particular patient, investment of lengthy research and development should be acknowledged by a transparent and predictable authorisation and reimbursement system. By addressing the challenges of drug and diagnostic co-development openly, a practicable and standardised co-ordination of the relevant pathways for medicinal products and IVD developers is – both from a medical and legal perspective – to be encouraged.

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