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Priorities for Personalized Medicine

PRESIDENTS COUNCIL OF ADVISORS ON SCIENCE AND TECHNOLOGY SEPTEMBER 2008


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About the Presidents Council of Advisors onScience and Technology

President Bush established the Presidents Council of Advisors on Science and Technology

(PCAST) by Executive Order 13226 in September 2001. Under this Executive Order, PCASTshall advise the President on matters involving science and technology policy, and

shall assist the National Science and Technology Council (NSTC) in securing private sectorinvolvement in its activities. The NSTC is a cabinet-level council that coordinates interagen-

cy research and development activities and science and technology policy making processesacross federal departments and agencies.

PCAST enables the President to receive advice from the private sector, including the aca-

demic community, on important issues relative to technology, scientic research, math and

science education, and other topics of national concern. The PCAST-NSTC link provides amechanism to enable the public-private exchange of ideas that inform the Federal scienceand technology policy making processes.

As a private sector advisory committee, PCAST recommendations do not constitute Adminis-

tration policy but rather advice to the Administration in the Science and Technology arena.

PCAST follows a tradition of Presidential advisory panels on science and technology dating

back to Presidents Eisenhower and Truman. The Councils 35 members, appointed by thePresident, are drawn from industry, educational and research institutions, and other

nongovernmental organizations. In addition, the Director of the Ofce of Science andTechnology Policy serves as PCASTs Co-Chair.


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Priorities or Personalized Medicine

Report o thePresidents Council o Advisors on Science and Technology

September 2008


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EXECUTIVE OFFICE OF THE PRESIDENTOFFICE OF SCIENCE AND TECHNOLOGY POLICY

WASHINGTON, D.C. 20502

September 15, 2008

President George W. BushThe White HouseWashington, D.C. 20502

Dear Mr. President:

We are pleased to send you the report, Priorities for Personalized Medicine, prepared by your Councilo Advisors on Science and Technology (PCAST). This report presents the scientifc background opersonalized medicine, its potential to improve health care and the obstacles standing in the way o its

progress.

The Council believes that the convergence o scientifc opportunity and public health need representedby personalized medicine warrants signifcant public and private sector action to realize thedevelopment o a promising class o new medical products. In conducting this extensive study PCASTexamined eight major policy areas, engaging an extensive and diverse set o individuals and groups.PCAST ultimately identifed three areas technology and tools, regulation, and reimbursement orits policy recommendations.

In order to develop technology and tools that will allow or the advancement o personalizedmedicine, PCAST recommends that the Federal government develop a strategic, long-term planthat coordinates public and private sector eorts to advance research and development relevant topersonalized medicine. To stimulate and acilitate modernization o the regulatory process impactingpersonalized medicine, transparent, systematic, and iterative approaches should be utilized in theregulation o personalized medicine technologies and tools. PCAST also recommends that eorts toachieve cost-containment objectives or health care should not arbitrarily obstruct the adoption oinnovative personalized medicine products. Finally, PCAST ound that an ofce should be establishedwithin the Department o Health and Human Services to specifcally coordinate their activities relatedto personalized medicine.

PCAST hopes that this report in its entirety helps lay a oundation or realizing important health carebenefts rom genomics-based molecular diagnostics, while providing a balanced assessment o thepromise and current limitations o personalized medicine more broadly.

Sincerely,

John H. Marburger, III E. Floyd KvammeCo-Chair Co-Chair


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September 15, 2008

The Honorable John H. Marburger, IIIDirector, Ofce o Science and Technology PolicyExecutive Ofce o the PresidentWashington, DC 20502

Mr. E. Floyd KvammeCo-Chair, Presidents Council o Advisors on Science and TechnologyWashington, DC 20502

Dear Jack and Floyd:

I am delighted to transmit to you PCASTs report, Priorities for Personalized Medicine, which wasrecently completed by our Subcommittee on Personalized Medicine.

PCAST commenced its study on personalized medicine in January 2007 with the ambitious goal

o assessing eight major policy areas, including: technology/tools, regulation, reimbursement,inormation technology, intellectual property, privacy, physician and patient education, andeconomics. More than 110 individuals provided briefngs to PCAST and its subcommittee at ninemeetings and workshops, a series o phone calls and by written submissions. We were very pleased atthe high level o interest in this subject as described by these individuals, who represented academicinstitutions, medical diagnostic, direct to consumer, service and imaging companies, biotechnologyand related tools companies, pharmaceutical and inormation technology companies, insurancecompanies and providers, patient advocates, venture capital frms, trade and proessional associationsand government agencies.

I presented our preliminary recommendations at the April 2008 PCAST Meeting, where we all notedthe assortment o Federal agencies with involvement in and/or oversight o emerging personalizedmedicine products and services. As important, we also recognized the broad range o levels at

which policy recommendations might be directed in our communication with the President. Theseobservations and experiences are not uncommon or health care and we were not spared the dilemmao how best to prioritize our study conclusions. As a result, the subcommittee narrowed the ocuso the report into areas we considered the most pressing and timely: technology/tools, regulationand reimbursement. We also eel the U.S. Department o Health & Human Services (HHS) could bemost eective in assuring progress or continued innovation in this feld through a more ormalizedcoordination ofce.

It is important to point out that we did not choose to detail in our report policy recommendations infve areas we studied, which still remain key components to the long term development and success opersonalized medicine. Our reasons or this decision relate to the timing o progress and work in each,involving: signifcant ongoing government activity (inormation technology and privacy), the early stageo personalized medicine product development (physician and patient education and economics) and

the need or more comprehensive policy recommendations extending beyond the scope o our study opersonalized medicine (intellectual property and privacy). With particular respect to intellectual property,discussion o Congressional attempts at patent reorm has been underway or several years and certainpolicy issues dominate the current, critical dialogue in this area with diering views rom a range o keyindustries. We encourage a separate, uture PCAST subcommittee to examine the outstanding intellectualproperty issues across all domains and prepare a report addressing these issues.

Several observations have served to peak our attention in the course o this study on personalizedmedicine. First, we have been impressed with the eorts o Secretary Leavitt and his sta in supporting


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advancements in this feld throughout dierent agencies in HHS. The Secretarys leadership hasaccelerated the rate at which such technological developments historically permeate policy discussionsand decisions though there is also understandable concern this progress might slow or end with anupcoming change in administration.

Second, frst generation personalized medicine products are giving us a vision o even broader possibleapplications. Not only do they have the potential to expedite drug testing and approval, which has

slowed signifcantly in this decade (in a backdrop o increasing development expense), they promise toimprove the quality o patient care.

Finally, there is also widespread appreciation that, i we begin to address the quality and delivery opatient care, we might eventually harness rising health care costs. The rapidly increasing number oenrollees in the Federal Medicare insurance program will keep the health care debate ocused on costsor many years to come. While there are many aspects o personalized medicine that require signifcantadditional study, this feld is developing specialized tools and accelerating the use o others that oerthe means to answer many questions in this debate.

I eel the Presidents support o, and the long standing eorts by Secretary Leavitt in acilitating thedevelopment o, personalized medicine have contributed greatly to early progress in this feld. Atthe same time, I hope this study contributes a broader understanding and recognition o the uture

opportunities that may arise rom personalized medicine but ones that will only emerge with acontinuation o current avorable policies in this area.

Sincerely,

M. Kathleen BehrensChair

Subcommittee on Personalized Medicine


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Presidents Council o Advisors on Science andTechnology

E. Floyd KvammeCo-Chair and PartnerKleiner Perkins Caueld & Byers

ChairsJohn H. Marburger, IIICo-Chair and Director

Oce o Science and Technology Policy

MembersF. Duane AckermanFormer Chairman and CEO

BellSouth Corporation

Paul M. Anderson

Chairman o the BoardSpectra Energy Corporation

Charles J. ArntzenRegents Proessor andFlorence Ely Nelson Presidential Chair

The Biodesign InstituteArizona State University

Norman R. AugustineFormer Chairman and CEOLockheed Martin Corporation

Carol BartzExecutive Chairman o the BoardAutodesk, Inc.

M. Kathleen BehrensGeneral Partner

RS& Co. Venture Partners IV, L.P.

Erich BlochDirectorThe Washington Advisory Group

Robert A. BrownPresident

Boston UniversityG. Wayne CloughSecretarySmithsonian Institution

Michael S. DellChairman o the Board

Dell Inc.

Nance K. Dicciani

Former President and CEOHoneywell Specialty Materials

Raul J. FernandezCEOObjectVideo

Marye Anne FoxChancellorUniversity o Caliornia, San Diego

Martha GillilandSenior Fellow

Council or Aid to Education

Ralph GomoryFormer President

Alred P. Sloan Foundation

Bernadine HealyHealth Editor and ColumnistU.S. News and World Report

Robert J. HerboldFormer Executive Vice PresidentMicrosot Corporation

Richard H. HermanChancellor

University o Illinois at Urbana-Champaign

Martin J. JischkePresident Emeritus

Purdue University


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Fred KavliFounder and Chairman

Kavli Foundation

Bobbie KilbergPresident

Northern Virginia Technology Council

Walter E. MasseyPresident EmeritusMorehouse College

E. Kenneth NwabuezeCEOSageMetrics

Steven G. PapermasterChairman

Powershit Ventures

Luis M. Proenza

PresidentUniversity o Akron

Daniel A. ReedDirector o Scalable and MulticoreComputing Strategy

Microsot Corporation

Executive DirectorScott J. Steele

George ScalisePresident

Semiconductor Industry Association

Stratton D. SclavosChairman o the Board, President,

and CEO VeriSign

John Brooks SlaughterPresident and CEOThe National Action Council or Minorities in

Engineering

Joseph M. TucciChairman, President, and CEO

EMC Corporation

Charles M. VestPresidentNational Academy o Engineering

Robert E. WittPresidentUniversity o Alabama

Tadataka YamadaPresident, Global Health Program

Bill and Melinda Gates Foundation


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Subcommittee on Personalized Medicine

Chair

M. Kathleen BehrensGeneral Partner

RS&Co. Venture Partners IV, L.P.

MembersPaul M. AndersonChairman o the BoardSpectra Energy Corporation

Charles J. ArntzenRegents Proessor and

Florence Ely Nelson Presidential ChairThe Biodesign InstituteArizona State University

Robert A. BrownPresident

Boston University

G. Wayne CloughSecretary

Smithsonian Institution

Nance K. DiccianiFormer President and CEO

Honeywell Specialty Materials

Marye Anne FoxChancellorUniversity o Caliornia, San Diego

Martha GillilandSenior Fellow

Council or Aid to Education

OSTP Sta LiaisonJane Silverthorne

Scott J. Steele

Bernadine HealyHealth Editor and ColumnistU.S. News and World Report

Martin J. JischkePresident Emeritus

Purdue University

Steven G. PapermasterChairman

Powershit Ventures

Luis M. ProenzaPresident

University o Akron

Daniel A. ReedDirector o Scalable and MulticoreComputing Strategy

Microsot Corporation

Joseph M. TucciChairman, President, and CEO

EMC Corporation

Tadataka YamadaPresident, Global Health ProgramBill and Melinda Gates Foundation


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Table o Contents

Table o Contents

Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

II. Landscape o Personalized Medicine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

III. PCAST Deliberations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

IV. Focus o Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

V. Technology and Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

VI. Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

VII. Coverage and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

VIII. HHS Coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Appendix A. PCAST Personalized Medicine Meetings and Presenters . . . . . . . . . . . . . . . . . . . . 51

Appendix B. Examples o Personalized Medicine ApplicationsCurrently on the Market . . . . . . 55

Appendix C. Technology and Tools Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Appendix D. Genomic Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59


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Executive Summary

Executive Summary

Personalized medicine reers to the tailoring o medical treatment to the individual characteristics o each

patient. It does not literally mean the creation o drugs or medical devices that are unique to a patient, but rather

the ability to classiy individuals into subpopulations that dier in their susceptibility to a particular disease ortheir response to a specic treatment. Preventive or therapeutic interventions can then be concentrated on thosewho will benet, sparing expense and side eects or those who will not.

The principle o adjusting treatment to specic patient characteristics has, o course, always been the goal o

physicians. However, recent rapid advances in genomics and molecular biology are beginning to reveal a largenumber o possible new, genome-related, molecular markers or the presence o disease, susceptibility to disease,

or dierential response to treatment. Such markers can serve as the basis o new genomics-based diagnostic testsor identiying and/or conrming disease, assessing an individuals risk o disease, identiying patients who will

benet rom particular interventions, or tailoring dosing regimens to individual variations in metabolic response.These new diagnostics can also pave the way or development o new therapeutics specically targeted at thephysiological consequences o the genetic deect(s) associated with a patients disease.

The current high level o interest in personalized medicine rom a policy perspective is attributable not only to thepromise o improved patient care and disease prevention, but also to the potential or personalized medicine to

positively impact two other important trends the increasing cost o health care and the decreasing rate o newmedical product development. The ability to distinguish in advance those patients who will benet rom a giventreatment and those who are likely to suer important adverse eects could result in meaningul cost savings or

the overall health care system. Moreover, the ability to stratiy patients by disease susceptibility or likely responseto treatment could also reduce the size, duration, and cost o clinical trials, thus acilitating the development o

new treatments, diagnostics, and prevention strategies.

The Presidents Council o Advisors on Science and Technology (PCAST) believes that the convergence o scientic

and clinical opportunity and public health need represented by personalized medicine warrants signicant publicand private sector action to acilitate the development and introduction into clinical practice o this promisingclass o new medical products. In developing recommendations or such action, PCAST considered eight major

policy areas technology/tools, regulation, reimbursement, inormation technology, intellectual property, privacy,

physician and patient education, and economics. To understand the impact o these policy areas on thedevelopment o personalized medicine, PCAST solicited input rom a broad range o stakeholders representingacademic institutions, medical diagnostics and imaging companies, biotechnology and pharmaceutical companies,

insurance companies, patient providers and advocates, venture capital rms, trade and proessional associations,and government agencies.

Based on these deliberations, PCAST determined that specic policy actions in the realm o genomics-based

molecular diagnostics had the greatest potential to accelerate progress in personalized medicine. This does notmean that PCAST discounts the importance o parallel developments in genomics-linked therapeutics; rather, PCAST

has concluded that, at present, the pace o change is most rapid, and the policy hurdles are greatest, in the realmo diagnostics.

With regard to genomics-based molecular diagnostics, PCAST urther identied three areas technology/tools,

regulation, and reimbursement or its policy recommendations. This prioritization refects the critical importanceo dened policy actions in each o these areas to near-term progress in the development and introduction o these

important health care innovations. Accordingly, PCAST has ocused its recommendations on these areas. The otherpolicy areas, while still very important over the long term to the success o new genomics-based molecular

diagnostics, were deemed less urgent within the context o the present report because o signicant ongoinggovernment activity (inormation technology and privacy), the early stage o personalized medicine product

development (physician and patient education and economics) or the need or more comprehensive policyrecommendations extending beyond the scope o personalized medicine (intellectual property and privacy). Withparticular respect to intellectual property, PCAST strongly recommends the convening o a separate PCAST

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2 Priorities or Personalized Medicine

subcommittee to examine the outstanding intellectual property issues across all domains and prepare a reportaddressing these issues. Finally, because the three policy areas on which PCAST is ocusing its recommendations

are under the purview o the Department o Health and Human Services (HHS), PCAST concluded that HHS shouldestablish a Personalized Medicine Coordination Oce.

This report presents the scientic and clinical background o personalized medicine, its potential to improve health

care, and the obstacles standing in the way o its progress. It reviews the landscape o personalized medicine by

describing the diagnostic tools involved, the clinical domains aected, and the requirements or implementation inclinical practice. The report also explains the rationale or ocusing on the three priority areas o technology/tools,regulation, and reimbursement and provides a brie review o the issues acing the remaining ve policy areas. The

report discusses in detail the technical background, policy issues, and challenges aecting each o the threepriority areas and provides specic recommendations or each area.

Challenges and Policy RecommendationsPriority Area 1: Technology and Tools

Challenges

Despite the promise o genomics-based molecular diagnostics to advance personalized medicine, signicantchallenges remain in validating the genomic/clinical correlations required to advance these products into clinical

use. While an increasing number o candidate genetic markers are being discovered, clinical validation o thesemarkers has proceeded at a slow pace. To correct this imbalance between discovery and validation, public and

private sector research will need to be coordinated and prioritized more eectively, and the tools required orvalidation studies will need to be strengthened.

Public/private sector coordination is necessary because the validation o genetic correlations with disease thekey element o translational research in this area shares many o the attributes o the development sideo research and development (R&D). Historically, development has been the purview o industry rather than o

government-supported academic science, which has instead ocused on discovery research. However, because thevalidation o genomic correlations with disease is a new, expensive, and high risk R&D area, industry may not be

willing to make a substantial investment until a clearer path to validation is developed through the use o publicunds. Thereore, in order to move genomic discoveries to practical application, public investment in the

translational research necessary to validate genomic/clinical correlations must be increased and also coordinatedwith industry investment.

Clinical and population studies to validate genomic correlations with disease and disease outcomes will also

require signicant investment in the development o three key translational research tools. The rst tool includescollections o high quality biological specimens accompanied by comprehensive disease annotation. The second

tool encompasses study designs addressing biomarker standardization and incorporating the sophisticatedstatistical methods necessary or demonstrating the clinical validity and utility o genomic proles. The third tool

represents large population cohorts or longitudinal health and disease studies. Without the development o thesetools, personalized medicine is unlikely to advance beyond the stage o promising discoveries.

Policy Recommendations

The Federal government should develop a strategic, long-term plan that coordinates public1.

and private sector eorts to advance research and development relevant to personalizedmedicine.

The Federal government, through the leadership o HHS, should join with the private sector to create

a public/private sector Personalized Medicine R&D Roadmap or coordinating discovery and

translational research in personalized medicine.

The National Institutes o Health (NIH) and other agencies such as the Departments o Energy and

Deense should evaluate the proper balance o government unding or discovery versus translationalresearch relevant to personalized medicine.


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3Executive Summary

Under HHS leadership, NIH should develop a coordinated process to identiy and prioritize diseases

and common therapies that would benet rom the application o genomics-based molecular

diagnostics.

The Federal government should make critical investments in the enabling tools and2.resources essential to moving beyond genomic discoveries to personalized medicineproducts and services o patient and public beneft.

NIH should lead, stimulate, and coordinate public and private sector eorts to develop an integrated

nationwide network o standardized biospecimen repositories to support research in personalizedmedicine.

NIH should develop a unding program or academic/industry collaborative projects addressing

biomarker standardization, statistical methods, and other aspects o study design necessary orvalidating the clinical utility o molecular diagnostics based on genomic correlations with disease

characteristics.

NIH should develop a large population cohort or investigating genetic and environmental health

impacts by enrolling and ollowing over time a large, representative sample o the U.S. population.

Priority Area 2: Regulation

Challenges

The Food and Drug Administration (FDA) has made considerable progress in dening its approach to the regulationo genomics-based molecular diagnostics. Nevertheless, FDA guidance remains ambiguous or incomplete in several

important areas, including:

Criteria that dene risk or products, including diagnostic tests, where inormation is the key result

Standards or study design and product perormance with regard to regulatory review o new

diagnostic products

Coordination o potentially redundant requirements between FDA and the Centers or Medicare and

Medicaid Services (CMS), operating under the authority o the Clinical Laboratory Improvement

Amendments legislation

Regulatory approach to co-development o diagnostics and therapeutics

Criteria and procedures or adjusting therapeutic product labeling to incorporate use o diagnostics

Regulatory approach to inormation technology-based clinical decision support systems

Progress to date on the Critical Path Initiative launched by FDA in 2004, which was intended to stimulate andacilitate modernization o the development path or drugs and devices, has been slow in part because o

inadequate unding. Furthermore, the private sectors interaction with the FDA with regard to regulatory policyneeds to be more proactive and constructive.

Policy Recommendations

FDA should implement a more transparent, systematic, and iterative approach to the3.regulation o genomics-based molecular diagnostics.

In its nal guidance on in vitro diagnostic multivariate index assay (IVDMIA) tests, FDA should clariyits denition o risk in light o the intended IVDMIA use, provide illustrative examples distinguishingproducts that will be subject to ull premarket approval review rom those that will not, and provideadequate transition time or any new requirements.

FDA and CMS should identiy potential overlap and redundancy in their oversight o laboratory-developed tests, eliminate redundant requirements, and issue guidance to clariy the relationshipbetween their respective requirements.


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FDA should nalize its drat concept paper on drug-diagnostic co-development and provide clarity

with regard to requirements and standards.

FDA should clariy the criteria and procedures or determining when labeling o a therapeutic product

will incorporate inormation on related diagnostic tests, as well as establish the circumstances underwhich such tests will be either recommended or required.

FDA should issue guidance concerning the regulation o automated clinical decision support systems.

FDA should enhance communication with aected constituencies by issuing more requent and timely

Requests or Inormation and drat guidance.

The FDA Critical Path Initiative should be adequately unded to support its envisioned4.research eorts that are critical to the progress o personalized medicine.

Priority projects should include the use o biomarkers to acilitate product development and

regulatory review and the development o standards or clinical trial design and biostatistical analysis

or validation o genomics-based molecular diagnostics.

Congress should und the Reagan-Udall Foundation and its board membership should be expanded to

include representatives rom the venture capital community and small companies involved in

genomics-based diagnostic development.

Industry should adopt a proactive and constructive role as FDA seeks to identiy and ulfll5.its regulatory responsibilities related to personalized medicine.

Industry should respond in a substantive and positive way to Requests or Inormation and drat

guidance documents, including submission o alternative approaches, and inorm FDA o emergingissues that require policy development.

Test developers should take advantage o existing FDA procedures or advance consultation to achieve

a timely and shared understanding o the hurdles to regulatory approval.

Industry should provide FDA with annual projections o the number and type o products in the

development pipeline based on emerging or rapidly evolving technologies.

Industry should convene meetings o trade and proessional associations to anticipate regulatory

issues that are likely to arise with new technological developments and provide FDA timely alerts

concerning such emerging issues.

Priority Area 3: Reimbursement

Challenges

There are three key challenges to achieving cost-containment objectives or health care without arbitrarily

obstructing the adoption o innovative genomics-based molecular diagnostics. The rst challenge is thatreimbursement o genomics-based molecular diagnostic tests as low-margin commodity items as is commonpractice or laboratory diagnostics will reduce the likelihood that such products will be developed by industry.

The second challenge is the need to develop standards or the evidence that CMS and other payors will require

to validate the benets o these tests in real-world settings. The third challenge involves the procedural hurdlesassociated with coding systems, bundled payment systems, and complex billing procedures and requirements thatcan especially impact reimbursement or innovative molecular diagnostics.


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5Executive Summary

Policy Recommendation

Public and private payors should determine coverage policies and payment rates or6.genomics-based molecular diagnostics in light o their overall impact on patient care, asdemonstrated by evidence rom clinical trials and other well-designed empirical studies.

Public and private payors should reimburse or genomics-based molecular diagnostics commensurate

with the clinical benets provided and should collaborate with test developers to establish new, morefexible coding approaches or reimbursement.

Public and private payors should collaborate to expand coverage with evidence development

programs that extend coverage and reimbursement while a product is being investigated or

appropriate use and eectiveness.

Public and private payors should collaborate in the development o standards or clinical trial designs

that would be accepted as providing evidence sucient or coverage decisions.

HHS Coordination

Challenges

As the three priority areas on which PCAST is ocusing its recommendations come under the purview o HHS, moresystematic coordination o activity across HHS is necessary to make the most eective use o limited resources.

Policy Recommendation

HHS should establish a Personalized Medicine Coordination Ofce within the Ofce o the7.Secretary o HHS to coordinate all activities relevant to personalized medicine.

The coordination oce should be charged with coordination o all HHS activities relative to

personalized medicine in order to acilitate progress while ensuring that personalized medicine

products meet the highest standards o saety, ecacy, and clinical utility.

The coordination oce should be responsible or monitoring the progress o personalized medicine

and, as new innovations or challenges develop, or ensuring that all HHS agencies work together to

address emerging needs.


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7I. Introduction

I. Introduction

Personalized medicine reers to the tailoring o medical treatment to the specic characteristics o each patient.

In an operational sense, however, personalized medicine does not literally mean the creation o drugs or medicaldevices that are unique to a patient.1 Rather, it involves the ability to classiy individuals into subpopulationsthat are uniquely or disproportionately susceptible to a particular disease or responsive to a specic treatment.Preventive or therapeutic interventions can then be concentrated on those who will benet, sparing expense and

side eects or those who will not.

The principle o adjusting treatment to the specic characteristics o the patient is not new; it has always been

the goal o physicians. However, rapid advances in genomics and molecular biology, including most prominentlythe sequencing o the human genome, promise to vastly increase physicians ability to stratiy patients in clinically

useul ways. A key product o these scientic advances has been the identication o an array o possible newgenome-related molecular markers or disease susceptibility or or specic variants o disease that are especiallyresponsive to particular treatments. These markers can include the presence or expression2 o particular gene

variants, patterns o gene variants or their expression, specic proteins, or variant orms o proteins. Such markers

can orm the basis o new genomics-based diagnostic tests or assessing individuals risk o disease, identiyingpatients who will benet rom particular interventions, or tailoring medication doses to accommodate individualvariation in metabolic response.3

In addition to genomics-based diagnostics, another key component o personalized medicine is the expanding

group o targeted therapies designed to counteract the specic physiologic mechanisms by which geneticalterations lead to particular orms o disease. Because these therapies are targeted at the consequences o deects

in single genes, they are most useul in cases where a single genetic deect denes the disease (e.g., Factor VIIIin hemophilia and bcr-abl targeted by the drug Gleevec [imatinib mesylate] in chronic myeloid leukemia).

Historically, such therapies have been developed using classical genetic or physiologic characterization and not therecent advances in genomic technologies. However, as genomic technologies identiy new markers o disease, newtargeted therapies can be developed that are specically linked to the use o a genomics-based diagnostic test or

identiying appropriate patients.

These scientic advances have occurred against the backdrop o two important trends in U.S. health care that haveocused intense interest on the promise o personalized medicine.

The rst trend is the ever-increasing cost o health care. As the baby boom generation approaches retirement

age and increases its demands on the health care system, any respite rom cost pressures seems remote. Whilemany health care cost reduction strategies will require dicult choices concerning access to or quality o care,personalized medicine the use o improved diagnostic tests to better match patients to treatments seems to

oer the prospect o combining improved patient outcomes with reduced costs.

1 There are exceptions to this rule in the area o immunotherapy, or example, patient-specic cancer vaccines that are created

using the patients own tumor cells or autologous stem cell transplants.2 Gene expression reers to the process by which cells convert genetic inormation contained in DNA into the proteins that are

responsible or the structure and unction o all living cells and tissues.3 Over the years, many diagnostic tests have become available to detect the genetic abnormalities associated with a wide

range o rare inherited disorders. The GeneTests Web site (http://www.genetests.org/, accessed July 17, 2008), unded by the

National Library o Medicine and the National Human Genome Research Institute, provides a comprehensive, annotated database

o such tests. The new technologies, however, promise to extend the power o genomic analysis to a broader range o more

common and/or late-onset diseases with wider public health impact.


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The scope or such savings may be broad. Physicians have long observed substantial variation in patient responseto treatments or dierent cancers as well as or such common conditions as hypertension, heart ailure,

depression, high cholesterol, and asthma. Finding the best medication or a given patient oten involves trial anderror; sometimes a physician may exhaust all possibilities without nding an option that is eective. The abilityto distinguish in advance those patients who will benet rom those who will incur cost and suer side eects

without gaining benet could both reduce costs and improve quality o care.

The second trend relates to the development o new treatments. The rate at which new drugs and devices aresubmitted to the Food and Drug Administration (FDA) and approved or marketing has not kept pace with theaccelerating progress in biomedical discovery research. This is due in part to the continually increasing cost,

complexity, and duration o the research and development (R&D) needed to bring a new product to market,4 atrend that is likely to be exacerbated by increased attention to saety in the wake o the Vioxx episode.5 Mindulo the enormous public investment in biomedical research, many patient advocacy groups are demanding increased

attention to clinical impacts and patient benet.6 Within the scientic community, there is growing awareness thatthe enormous resources being put into biomedical research, and the huge strides made in understanding disease

mechanisms, are not resulting in commensurate gains in new treatments, diagnostics and prevention.7

The core capability o personalized medicine the ability to stratiy patients by disease susceptibility or likely

response to treatment can also be applied in the design o clinical trials to reduce their size, duration, and cost.In some cases, new knowledge about actors infuencing patient response can even rescue drugs that benet

specic populations but whose eects are lost in the statistical noise when the drugs are tested in unselectedpopulations dominated by nonresponders. Thus, personalized medicine may also be part o the solution to thepipeline problem or drugs and medical devices.

This compelling convergence o public health need and scientic opportunity has raised personalized medicineto the top o the public policy agenda. Under the leadership o Secretary Michael Leavitt, the Department o

Health and Human Services (HHS) has identied personalized medicine as a priority and supported a wide range oinitiatives to stimulate progress in the eld.8 The Secretarys Advisory Committee on Genetics, Health, and Society(SACGHS) has recently released two major reports addressing key aspects o personalized medicine.9 The Institute

o Medicine has created a Roundtable on Translating Genomic-Based Research or Health10 which recently releaseda summary report rom its December 4, 2007, Workshop on the Diusion and Use o Genomic Innovations in Health

and Medicine.11 The Personalized Medicine Coalition has been organized as an independent, not-or-prot, cross-sector education and advocacy group.12 Conerences on personalized medicine sponsored by academic research

centers, investment rms, and others have prolierated as researchers and policymakers in government, academia,and industry seek to understand the implications o genomic science or health care.

4 The Pursuit of High Performance through Research and Development: Understanding Pharmaceutical Research and Development

Cost Drivers, prepared by Accenture or the Pharmaceutical Research and Manuacturers o America, 2007; accessed June 24,

2008 at http://www.phrma.org/les/Accenture%20R&D%20Report-2007.pd.5 See Vioxx (roecoxib) Inormation Center, http://www.merck.com/newsroom/vioxx/ and Vioxx (roecoxib) Questions and

Answers, http://www.da.gov/CDER/DRUG/inopage/vioxx/vioxxQA.htm, both accessed August 9, 2008.6 See, or example, the overview and mission statement or the organization FasterCures, accessed June 24, 2008 at http://

www.astercures.org/about/.7

Butler D, Crossing the Valley o Death, Nature 2008 Jun 12;453(7197):840-2.8 http://www.hhs.gov/myhealthcare/, accessed June 24, 2008.9 U.S. System of Oversight of Genetic Testing: A Response to the Charge of the Secretary of Health and Human Services, Report

o the Secretarys Advisory Committee on Genetics, Health, and Society, April 2008, accessed June 24, 2008 at http://www4.

od.nih.gov/oba/SACGHS/reports/SACGHS_oversight_report.pd; Realizing the Potential of Pharmacogenomics: Opportunities and

Challenges, Report o the Secretarys Advisory Committee on Genetics, Health, and Society, May 2008, accessed June 24, 2008

at http://www4.od.nih.gov/oba/SACGHS/reports/SACGHS_PGx_Report.pd.10 http://www.iom.edu/CMS/3740/44443.aspx, accessed June 24, 2008.11 http://www.nap.edu/catalog.php?record_id=12148, accessed June 24, 2008.12 http://www.personalizedmedicinecoalition.org/, accessed June 24, 2008.


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9I. Introduction

Appendix B lists several applications o genomics-based diagnostics (oten with linked therapeutics) that havereached the market, establishing proo o concept. At the very least, many more such advances that benet

specic groups o patients can be expected. More optimistic observers envision a uture in which the strategy ogenomics-tailored treatment is so powerul and broadly useul that it undamentally transorms clinical practice,leading to a new, qualitatively dierent, more cost-eective era o truly personalized medicine. Whether such a

vision is realistic remains to be seen. But even under the most conservative scenarios or progress in personalized

medicine, the benet in improved health and reduction in human suering will be great.However, realization o the benets o personalized medicine is threatened by an array o obstacles. Theseobstacles include:

Methodological and logistical challenges in validating apparent correlations between genetic markers and

disease, which are being generated at an accelerating rate through the latest genomic technologies

Regulatory and reimbursement systems that were not designed to accommodate complex genomics-based

diagnostics that have the power to sway high-stakes medical decisions

Absence o the electronic medical record-linked decision support tools needed to eectively integrate the

results o genomics-based diagnostic tests into routine clinical practice

Intellectual property laws and practices that may present barriers to investment in genomics-based diagnostics

Privacy concerns that may limit patient acceptance o genomics-based diagnostics

Education o patients and physicians on the proper use and limitations o new genomics-based diagnostics

The purpose o this report is to present the recommendations o The Presidents Council o Advisors on Science

and Technology (PCAST) or overcoming these obstacles. This report diers rom the many other recentreports on personalized medicine in two important ways. The rst relates to PCASTs distinctive role, whichis to advise the President concerning the private sectors perspective on key science and technology issues.

In analyzing personalized medicine, PCAST has taken a comprehensive view o the innovation ecosystem, andmakes recommendations or both government and private action. Second, rather than issue a lengthy list o

recommendations addressing every acet o personalized medicine, PCAST has chosen to identiy areas that itconsiders the most important obstacles to progress today, and to ocus a limited number o recommendations on

these priority areas.

To provide context and make the discussion more concrete, Section II briefy outlines the range o personalizedmedicine products and tools that are beginning to impact clinical practice today or are likely to do so in the

oreseeable uture, and summarizes the likely clinical ocus o personalized medicine in the near term. SectionIII describes the process through which PCAST assessed the status o personalized medicine and the relative

importance o the obstacles to its progress, while Section IV delineates the subset o these obstacles that PCASThas identied as priorities or immediate action. The remaining sections (Sections V-VIII) explain in detail each o

these prioritized issues and present PCASTs recommendations.


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11II. Landscape o Personalized Medicine

II. Landscape o Personalized Medicine

Introduction

The goal o personalized medicine is to reduce the burden o disease by targeting prevention or treatment moreeectively. Its strategy is to sort patients into narrower diagnostic categories that correlate more strongly with theecacy o specic therapies or preventive measures. Its key enabling technologies are advances in genomics andmolecular biology that oer the potential to radically improve our ability to characterize susceptibility to disease

and to treatment eects.

Diagnostic ToolsThe vision o clinical practice transormed by personalized medicine encompasses a wide range o diagnostic tools.

Some address diagnosisper se, some are used to guide treatment, and some identiy the need or prevention. Mostare aimed at physicians, but some may be marketed directly to consumers. Several products are on the markettoday (see Appendix B) and many more are in the development pipeline, while new concepts ripe or development

are continually emerging rom discovery research.

Molecular Diagnostics

In vitro molecular diagnostics are laboratory tests that can be used on blood, tissue, or other biological samples toidentiy the presence o specic molecular biomarkers. Today, much attention is ocused on genes and their proteinproducts as biomarkers. These may be assessed by measuring either the presence o a gene or protein variant or its

level o expression or activity. However, other products o human physiology including lipids, carbohydrates, andother metabolic intermediates and end-products can also serve as biomarkers.

Molecular diagnostics can be used in a variety o ways to inorm personalized medicine:

Assess the likely efcacy o specifc therapeutic agents in specifc patients. An example is the use o theOncotype DX test in patients with newly diagnosed, early stage invasive breast cancer to quantiy the risk o

systemic recurrence and assess the value o chemotherapy.13

Identiy patients who may suer disproportionately severe adverse eects rom a given treatmentor dosage. One example is tests or genetic variation in the activity o an enzyme called thiopurinemethyltranserase (TPMT), which aects the level o bone marrow toxicity experienced by patients receiving

purine drugs or acute lymphocytic leukemia, renal transplant rejection, and severe active rheumatoidarthritis.14 Another example is a test to detect a gene variant that elevates the risk or white blood celldepletion rom Camptosar (irinotecan), an agent used in the treatment o colorectal cancer.15 Notably, as this

report was being completed, FDA issued an alert and announced orthcoming changes in labeling or the anti-HIV agent abacavir. Patients with the HLA-B*5701 allele who take abacavir are at signicantly higher risk or

serious and sometimes atal hypersensitivity reactions; this allele can be detected by genetic tests already onthe market.16 The ability to identiy patients who are likely to suer disproportionate adverse eects may also

be o value in designing clinical trials to rescue agents which have ailed due to toxicity. Several exampleso this category o molecular diagnostic are already on the market (see Appendix B).

13 http://www.genomichealth.com/oncotype/, accessed April 24, 2008.14 AZASAN prescribing inormation, http://www.salix.com/assets/pd/prescribe_ino/azasanpi.pd, accessed April 24, 2008.15 http://www.twt.com/clinical/ivd/ugt1a1.html, accessed May 21, 2008.16 Inormation or Healthcare Proessionals Abacavir (marketed as Ziagen) and Abacavir-containing medications, http://www.

da.gov/cder/drug/InoSheets/HCP/abacavirHCP.htm, accessed August 9, 2008.


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Determine optimal dosages or drugs whose therapeutic eect is known to vary widely. For example,wararin anticoagulation therapy is routinely dosed through trial and error. A number o tests or genetic

markers that correlate with wararin metabolism and are believed to be important in patient dosing are alreadyon the market, and additional markers are under investigation.

Assess the extent or progression o disease. Molecular diagnostics have the potential to provide moreaccurate and timely inormation on disease prognosis or treatment eectiveness than the imaging and

pathology methods currently used or this purpose, though uture diagnostic approaches may integrate all othese methods.

Examine surrogate measures or clinical outcomes. Researchers are investigating whether biomarker-basedmolecular diagnostics can provide reliable proxies or longterm outcomes such as relapse or survival. Suchtests could be used to shorten the length and expense o clinical trials.

Identiy patients who can beneft rom specifc preventive measures. To have a meaningul clinicalimpact, such diagnostics would have to identiy individuals who have a substantially elevated risk o aspecic condition or which a well-dened intervention is available that is aordable and tolerable within the

patients liestyle. Products or services in this category may be marketed directly to consumers, as well as tohealth care providers.

Personal Genomes and Genetic ProflesRapid advances in the technology and reduction in the cost o DNA sequencing are likely to make completepersonal genomic sequences widely available at an aordable cost, perhaps even within the next decade. In act,

whole-genome sequencing has recently become commercially available, albeit at a price $350,000 that all buta handul o consumers will nd prohibitive.17

However, speculation about the potential impact o the low-cost $1,000 genome oten overlooks two criticalpoints. First, human illness is a consequence not solely o genetic inheritance, but also o its interaction withenvironment and behavior. Second, the limiting actor in clinical application o genomic inormation will be

not the availability o patients genomes, but rather the lack o robust, clinically validated correlations betweengenomic markers or proles and specic clinical phenomena such as susceptibility to disease or to the eects o a

particular treatment. Visions o the personal genome as a uniquely powerul diagnostic tool or as a substitute ormany existing diagnostic and risk assessment techniques are premature.

In addition to whole-genome sequencing, a number o companies have begun to utilize large numbers oknown markers to oer genetic proles directly to consumers.18 As with personal genomes, the predictive valueand clinical utility o these genetic proles is unproven and remains the ocus o considerable skepticism and

controversy. Direct-to-consumer marketing o such proles, or o well-validated markers or specic inheriteddisorders, raises signicant scientic, legal, and ethical issues that are both complex and beyond the scope o

this report.

Linked Diagnostics and TherapeuticsGenomics-based diagnostics also have the potential to lead to development o new drugs or biologic agents thatare targeted to the genetic or physiologic deect identied by the diagnostic. The best known example is already

on the market: the use o HER2 tests to guide use o the drug Herceptin (trastuzumab) by identiying those breast

cancer patients whose tumors over-express the HER2 gene.19

Such linkages may be established via coordinateddevelopment o the agent and the test, through development o a relevant test ater an agent has reached themarket, or (in principle, but rarely in current practice) through the development o a new agent or which an

already-marketed diagnostic can serve as a dierentiator.

17 http://www.knome.com/Recent%20News/tabid/58420/Deault.aspx, accessed April 24, 2008.18 See, or example, 23andMe (http://www.23andme.com/) and Navigenics (http://www.navigenics.com/). Both accessed

April 24, 2008.19 http://www.herceptin.com/herceptin/proessional/testing/important.jsp, accessed April 24th, 2008.


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By identiying patients who are most likely to benet rom a therapeutic agent, linked diagnostics may oer thecollateral benet o enabling the design o smaller, aster, and less expensive clinical trials or those agents with

a higher likelihood o success. The development o new linked diagnostics may also make it possible to rescueagents that have shown little apparent ecacy in large trials o unselected patient populations.

Clinical DomainsToday, most applications o innovative genomics-based diagnostics are utilized or cancer. Research on the geneticmutations that lead to loss o normal growth control in tumor cells has identied a range o targets that may beaccessible to pharmacologic intervention, and whose presence can be detected using molecular assays or the

presence or expression o a variant gene or its protein product. Because o the lie-or-death nature o cancertreatment decisions and the high cost o cancer care, the use o relatively expensive tests can oten be justied.

High-stakes, high-cost conditions in other clinical domains are also likely candidates or commercialization o

innovative molecular diagnostics in the near term. Two examples already on the market are the AlloMap molecularexpression test,20 which provides noninvasive monitoring o patient risk or acute cellular rejection ollowing

cardiac transplantation, and the Trole HIV tropism assay,21 which is used to identiy patients who may benetrom the novel anti-HIV drug Selzentry (maraviroc).

Common conditions managed in primary care practice are oten infuenced by multiple genes, in ways that are not

yet well understood. The rapidly-evolving eld o wararin pharmacogenomics exemplies some o the challengesthat will be aced in implementing personalized medicine or such conditions.22 There is strong evidence that the

extensive variation in wararin metabolism can be explained largely by a mix o genetic and clinical actors, so thatin principle an algorithm based on these actors should be able to help clinicians arrive at optimal dosing sooner

and with a reduced risk o bleeding incidents.

Several tests are already on the market that allow assessment o some, but not all, o the genetics-related

risks associated with wararin dosing. However, physicians generally remain reluctant to use them or severalreasons. Robust algorithms or translating genomic test results into initial and/or subsequent dosing arenot widely available and will likely change as additional genetic actors are identiied and the relative

contributions o each are determined. In many practice settings, lengthy turnaround times mean that testresults are unavailable or timely initiation o therapy. Patients who have their initial dosage adjusted

in light o such tests still require ongoing monitoring to assure that bleeding time remains within an

acceptable range, so there is little or no net reduction in physician burden. Finally, as yet there is no irmevidence that optimizing initial dosage will ultimately reduce bleeding events, and thus it is not yet knownwhether any important clinical beneit will be gained.

Despite a promising theoretical case or the benets o pharamacogenomics-based patient management,

realization o these benets in practice or common conditions aected by multiple genes will be a complexprocess that will depend on substantial investment in clinical research well beyond the initial demonstration o

gene-disease correlations. For such conditions, widespread adoption o pharmacogenomic diagnostics is likely tobe some years away.

Clinical Decision SupportTo date, ew genomics-based diagnostic tests have reached the market, and these ew products have been targeted

primarily at clinical specialists and subspecialists who have been able to assimilate them into practice withoutspecial measures. However, i the number o innovative personalized medicine diagnostics and linked diagnostic-

therapeutic combinations reaching the market increases substantially, widespread adoption o these products and

20 http://www.allomap.com, accessed April 24, 2008.21 http://www.troleassay.com, accessed April 24, 2008.22 Check W, Too ast or too slow on PGx testing? CAP Today Feature Story, March 2008, College o American Pathologists,

http://www.cap.org/apps/portlets/contentViewer/show.do?printFriendly=true&contentReerence=cap_today%2Fcover_

stories%2F0308_TooFastOrSlow.html, accessed April 24, 2008.


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services especially in general practice settings may depend on the availability o IT-based clinical decisionsupport systems that are integrated with electronic medical records and can be accessed as part o routine practice

workfows. Such systems draw on the inormation present in the medical record to give the physician patient- andsituation-specic inormation on the diagnostics and therapeutics relevant to the patients care.

Medical Technology Innovation PathwayGenomics-based diagnostics, as well as therapeutics targeted at the physiologic consequences o genetic variationin disease, must traverse a complex pathway to move rom a undamental discovery in basic biomedical scienceto a product or service that is available in routine clinical practice. These steps are presented in simplied and

idealized orm in the Medical Technology Innovation Pathway, shown in Figure 1.

Although the pathway is a simplied representation, it helps to clariy key eatures o the innovation process thatare central to understanding the policy issues addressed in this report. These eatures include:

The complex interactions between government, academia, and industry that are required to bring a new

biomedical technology to ruition

The continual assessment o needs, opportunities, and the opportunity cost o alternative investments

conducted by government and industry as they evaluate how to spend scarce resources most productively

The role o government unded discovery and translational research in continually reseeding the developmentpathway with essential technologies and tools

The challenging, nonroutine nature o the development phase o the R&D process or medical products

The important hurdles to market access or new products or services posed by regulatory and coverage/

reimbursement processes

The provisional nature o market access, as the regulatory and reimbursement status o marketed products may

be subject to revision in light o ongoing surveillance and research

As is refected in the pathway diagram, private sector investment decisions take into account scientic

and technological considerations, along with market conditions and intellectual property, regulatory, andreimbursement hurdles that are expected to apply to a given product. This assessment considers not only

those actors that are narrowly relevant to a particular product, but also overall trends in intellectual property,regulatory, and reimbursement policy that are relevant to a biomedical product class, such as genomics-basedmolecular diagnostics. Intellectual property, regulatory, or reimbursement policies can be barriers to investment

not only when they raise well-dened hurdles to product development, but also in situations where a lack o clearpolicy or clear communication o intended policy changes raises substantial concern that new hurdles will be

imposed. Because all o these actors are considered at the outset, an unavorable assessment o the investmentclimate or a product or, indeed, or an entire class o products can mean that no investment in that product or

class will be orthcoming at all.


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Figure 1. Medical Technology Innovation Pathway

Medical Technology Innovation Pathway

Venture capital or established

company assesses markets, IP,

competition, regulation,

reimbursement, available

capital, opportunity cost

Production

manufacturing capacity

Pilot manufacturing

capability

New business initiative or

company startup

Government assesses opportunities

in discovery and translational

research, gaps in public and

private R&D

Unmet clinical

need

Discovery

research

Discoveries with

potential product or

service applications

Translational research in

government, academia

and/or industry

Product development

in industry

Early phaseclinical trials

Late phase

clinical trials

Regulatory submission,

definition of approved

scope of marketing

Coverage/

reimbursement

Postmarketing

researchProduct differentiation/extension

Post-market

surveillance


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17III. PCAST Deliberations

III. PCAST Deliberations

PCAST initiated its study in January 2007, having identied eight major policy areas to consider and evaluate:

Technology/Tools

Regulation

Reimbursement

Inormation Technology

Intellectual Property

Privacy

Physician and Patient Education

Economics

Numerous public presentations, private subcommittee meetings and workshops, and telephone interviews wereconducted to learn the views o a broad range o stakeholders and provide subject matter expertise to PCAST on

these eight topics. More than 110 individuals provided briengs, interviews, or presentations. The ollowing majorevents were held involving the participants, as listed in Appendix A:

Public presentations at PCAST meetings on January 9, 2007; April 24, 2007; September 11, 2007; and January

8, 2008, by academic and industry researchers, clinicians, industry executives, venture capitalists, andrepresentatives o government agencies, as well as trade, proessional, and patient associations.

Presentations at Personalized Medicine Subcommittee meetings on April 25, 2007; September 12, 2007; and

January 9, 2008; by representatives o government agencies as well as trade and proessional associationsrepresenting the biotechnology, pharmaceutical, clinical laboratory services, and venture capital industries.

Subcommittee workshop on July 24, 2007; to obtain input on intellectual property, technology/tool

development, and regulation/reimbursement issues rom intellectual property lawyers and representatives romthe molecular diagnostics industry and venture capital community.

Subcommittee workshop on November 28, 2007; to obtain input on inormation technology, electronic medical

records, reimbursement, economics, and the impact o personalized medicine on development o pharmaceuticalsand medical diagnostics rom representatives o pharmaceutical, diagnostics, and health insurance companies aswell as experts in pharmacoeconomics, reimbursement, and health inormation technology.

In addition to these major orums, the PCAST subcommittee conducted telephone interviews with many additionalindividuals rom academic institutions, medical diagnostic, direct to customer, service and imaging companies,

biotechnology and related tools companies, pharmaceutical and inormation technology companies, insurancecompanies and providers, patient advocates, venture capital rms, trade and proessional associations, and

government agencies.


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19IV. Focus o Report

IV. Focus o Report

PCAST concluded that the essential driver or the expanding promise o personalized medicine is the development

and application o genomics-based molecular diagnostics.

Molecular assays have been in use or decades as diagnostics. For example, measurement o the level o activityo a single protein molecule, Factor VIII, has long been a molecular diagnostic or the underlying genetic deect

in hemophilia, while a test or the mutant bcr-abl gene associated with the Philadelphia chromosome that ischaracteristic o chronic myeloid leukemia is used as a molecular diagnostic or the disease.

Development o these molecular diagnostics and many others based on single-gene deects did not depend onmodern genomic technologies. The Factor VIII deciency in hemophilia was discovered by classic protein analysis,

while identication o the bcr-abl mutation was guided by the act that it is a DNA translocation which can beidentied through classic cytogenetic analysis. However, these classical approaches to molecular diagnosticsdevelopment are only truly useul and practical or diseases in which a single-gene deect results in an easily

observable phenomenon such as activity o a specic protein in blood or other bodily fuid or the appearance o agross chromosomal aberration.

Unortunately, most human diseases, as well as the human physiological response to therapy, result rom a varietyo dierent genes acting in concert. Dissecting the complex metabolic pathways involved and identiying the

responsible proteins and genes or even a single disease requires large expenditures and decades o research, withresults still oten elusive due to the complexities o human in vivo experimental manipulation. Genomics-basedmolecular diagnostics oer the possibility o correlating genetic proles with disease occurrence, disease outcome,

response to therapy, adverse events, and other actors, without the need to ully understand the underlyingbiological mechanisms the specic genes that are involved, the impact o the genes on physiology, and the way

they unction in concert. Genetic proles will also be instrumental in identiying known genes or gene variantsthat correlate with various disease outcomes, as well as in identiying genetic regions correlated with outcome

that can be investigated or previously unknown genes. Genetic proles will thus acilitate the development o newsingle gene or protein tests as well as new therapies that target the consequences o specic genetic alterations.

Because o the extraordinary potential o genomics-based molecular diagnostics to accelerate progress in

personalized medicine, this PCAST report ocuses primarily on the policy actions required to acilitate thedevelopment and introduction into practice o this important health care innovation. Moreover, ater analyzing

each o the policy areas described in the previous section, the PCAST Personalized Medicine Subcommitteeprioritized three o these areas technology/tools, regulation, and reimbursement as the ocus o its strategic

policy recommendations. PCAST based this prioritization on three actors. The rst actor was the magnitude othe obstacles that these areas present to the near-term development and introduction into practice o genomics-based molecular diagnostics. The second actor was the degree to which the obstacles presented, and the solutions

thereto, were specic to personalized medicine and not necessarily to health care overall. The third actor was thedegree to which the obstacles could be addressed by dened near-term policy actions.

In ocusing on genomics-based molecular diagnostics, PCAST does not mean to discount the importance o theparallel developments in genomics-linked therapeutics. At present, however, the pace o change is most rapid, and

the technological, regulatory, and reimbursement hurdles to progress are greatest, in the realm o diagnostics.

Technology and ToolsThe rst critical obstacle to realizing the potential o genomics-based molecular diagnostics concerns thechallenges encountered in validating the genetic/clinical correlations identied through discovery research.

Accelerating progress in validation requires the development o critical enabling technologies, tools, resources,and standardized methodological approaches, as well as increased investment in and prioritization o validation

studies. Because o the scope and high-risk nature o this work, and the act that the ultimate goal is thedevelopment o diagnostic tests introduced into commerce, a joint public/private sector approach appeared toPCAST as the most appropriate to address these challenges.


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RegulationThe second critical challenge concerns the regulatory system or laboratory diagnostics. Historically, laboratorydiagnostics have been evaluated or regulatory approval solely on their ability to measure accurately the parameter

o interest (i.e., analytic validity). The clinical meaning o the test result was either entirely obvious (e.g., apositive Hepatitis C test means that a patient has Hepatitis C) or was determined by the clinician in combination

with other actors (e.g. the combined use o cholesterol tests, blood pressure, stress tests, and amily history todetermine whether a patient should be treated to prevent cardiovascular disease). In contrast, the result o agenomics-based molecular diagnostic test may not be transparent, yet may still directly determine how a patient

is treated. Accordingly, the test must not only accurately measure the genetic prole (analytic validity), butthe prole must also be correlated with clinical outcome in a series o robust and reproducible clinical studies

(clinical validity). This is true whether the ultimate commercial diagnostic is a genomic prole or one or morespecic gene or protein tests derived rom the results provided by the prole. Thereore, genomics-based molecular

diagnostics need a regulatory regime that considers both analytical and clinical validity. Such a regime will requirediagnostic developers to adapt to a regulatory approval pathway or diagnostics that may look more like that orpharmaceuticals. The challenge is to implement such a new regulatory approach without placing unnecessary or

uncertain burdens on product development.

ReimbursementThe third critical challenge is insurance coverage and reimbursement, which must provide adequate compensation

or the cost and time required to establish both analytic and clinical validity. Traditionally, laboratory diagnosticshave been reimbursed based on commodity pricing o simple laboratory procedures. However, genomics-basedmolecular diagnostics not only involve more expensive laboratory and data analysis procedures, but also must

bear the development cost or establishing clinical validation; this cost is analogous to the clinical trial costsassociated with pharmaceutical product development. Thereore, a value-based coverage and reimbursement

approach or these products, similar to that used or high-value pharmaceuticals, must be developed or suchproducts may never reach patients. In addition, because reimbursement or high-value products must be driven

by true clinical benet or the covered population, criteria or demonstrating both clinical utility and validitymust be developed and standardized. These criteria can then be used to guide both product development andreimbursement decisions.

Despite the ocus o this report on the three challenges outlined above, the other policy areas considered by thesubcommittee are clearly still relevant over the long term to the successul development and introduction into

practice o genomics-based molecular diagnostics. Each o these areas is discussed briefy below.

Inormation TechnologyHealth care inormation technology tools, including electronic medical records, personal medical records, andclinical decision support systems will be essential enablers or the development and widespread use o genomics-

based molecular diagnostics. Fully interoperable, standardized electronic medical records allow data to be readilyaggregated and analyzed across multiple records. Not only will this allow physicians to have a ull picture o

a patients medical history, but it may also serve as an invaluable platorm or research into the correlation ogenomic markers with clinical phenomena. Clinical decision support tools integrated with medical records are

essential to allow physicians easy access to new patient-appropriate diagnostic tests as well as to automated

resources or the interpretation o test results. Many previous policy recommendations have addressed thedevelopment o these tools, and both the public and private sector continue to make extensive eorts to address

this need.

In April 2004, the President issued an Executive Order creating the Oce o the National Coordinator or Health

Inormation Technology (ONC) within HHS. The Executive Order charged ONC with providing leadership or thedevelopment and national implementation o an interoperable health inormation technology inrastructure andalso with achieving the goal o widespread adoption o interoperable electronic health records by 2014. The ONC

strategy is to collaborate with the private, nonprot and non-Federal public sectors and incentivize investment


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by those stakeholders through Federal laws, procurement contracts, conditions o doing business with the FederalGovernment, and reimbursement.

In September 2005, HHS Secretary Leavitt established the American Health Inormation Community (AHIC) withinONC as a Federal advisory committee to provide input and recommendations rom the private and nonprot sectorsregarding the development o interoperable electronic medical records with appropriate privacy and security

protections. AHIC has conducted extensive deliberations to develop recommendations regarding policy, technical,

business, and social issues across several domains and has identied several clinical unctions that should beprioritized or standards denition and electronic implementation. The ultimate goal is to acilitate the emergenceo a shared, interoperable, electronic Nationwide Health Inormation Network which all health care providers could

access. AHIC is expected to be transitioned into a sustainable public-private collaboration based in the privatesector by the end o 2008.

In addition to these Federal coordination eorts, the private sector is actively engaged in developing and

implementing both electronic medical records and electronic clinical decision support systems linked to suchrecords. Integrated health care systems such as the Veterans Health Administration and Kaiser Permanente as well

as major hospitals and regional medical networks have made considerable progress in implementing electronicmedical record systems. However, the overall rate o adoption o electronic medical records and decision support

tools remains low, in part because o the very low rate o adoption in the small group or independent physicianpractices that comprise the majority o practices in this country today. Recent direct-to-consumer electronic

medical record product oerings by large internet-based inormation companies may begin to provide alternativeroutes or direct patient access to the creation and use o such records.

PCAST endorses and strongly encourages continued support o the important coordination and standard-setting

eorts o ONC and AHIC, as well as the ongoing eorts in the private sector. Because these eorts are at anearly stage, it is dicult to determine i they will address all o the important obstacles. However, until the

current eorts are more ully implemented and their success can be assessed, PCAST concluded that it should notrecommend additional policy actions at this time.

Intellectual PropertyThe ability to obtain strong intellectual property protection through patents has been, and will continue to be,

essential or pharmaceutical and biotechnology companies to make the large, high-risk R&D investments required

to develop novel medical products, including genomics-based molecular diagnostics. Unortunately, several recentevents have threatened the stability o intellectual property protection in the biosciences.

Recent Supreme Court cases have made the nonobviousness standard more stringent, shed doubt on the potentialto patent diagnostic correlations, expanded the activities covered by the research and development exemption, and

made obtaining injunctive relie or patent inringement more dicult. The proposed Patent Reorm Act o 2007has opened a contentious debate among stakeholders rom dierent industries concerning the impact o several

elements o the Act, including the post-grant review and apportionment o damages provisions. These provisionscould reduce the condence o developers and investors in the strength o granted patents, which could be

especially detrimental or the development o innovative medical products. Conversely, the opportunity to presentcountervailing arguments and evidence outside o litigation provided by the post-grant review provisions couldreduce ears that specic molecular diagnostic products would inringe broad gene-related patents.

In August 2007, the U.S. Patent and Trademark Oce published rule changes that placed new limitations onthe number and nature o claims and also placed requirements on divisional and continuation applications that

will likely ront-load patent costs and orce ling decisions beore all the supporting data can be obtained.In November 2007, a Federal district court, in response to an industry lawsuit, temporarily enjoined theimplementation o these rule changes. In April 2008, the court granted a summary judgment in avor o the

industry challenge on the grounds that the proposed rules were substantive in nature and thereore the PatentOce had exceeded its rule-making authority.

The challenges posed by these major intellectual property law changes urgently require a comprehensive, cross-industry analysis. The issues are enormously complex and apply not only to genomics-based molecular diagnostics


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and other personalized medicine products such as targeted therapeutics and single-gene or protein tests, but to allinnovative biomedical products and products o other industries as well.

Thereore, PCAST strongly recommends that a separate PCAST subcommittee be convened to address these

patent law issues across all domains and issue a report devoted exclusively to these issues.To attempt toaddress these complex and broadly applicable issues as only one aspect o a report ocused specically on

personalized medicine would not do them justice and would obscure their overall importance.

PrivacyPCAST applauds the recent passage and signature into law o the Genetic Inormation Non-Discrimination Act o

2008 (GINA).23 GINA is expected to alleviate many o the privacy concerns that have made many patients unwillingto have genomics-based molecular diagnostic or other genetic tests perormed. However, even with the passage oGINA, certain privacy issues remain o concern to the public.

The rst issue is the act that detailed genetic inormation has the potential to uniquely identiy an individualeven i the data are not linked to obvious identiers such as name, address, or social security number. As a

practical matter, however, the use o genomic sequences to identiy individuals would require access to a databasethat connects data to individuals. The relevant policy issue is the establishment and maintenance o adequate

database security and controls on data use a problem that applies to all sensitive patient data, not just to

genomic sequences.

The second issue is that the potential or an unintended release o genetic inormation that violates patient

privacy is greater i the inormation is stored in large interoperable electronic databases that are widely availableto the research and clinical community as opposed to paper records held by individual sites. Technologies and

procedures or encryption, password protection, audit trails, and transaction-specic access codes are importanttools or establishing and maintaining the necessary data controls. Many security breaches, however, arise not

rom limitations o the technology but rom improper use or malicious evasion o data controls. Achieving datasecurity in a large organization is as much a management issue as a technical one; the challenges involved areconsiderable, and are beyond the scope o this study.

The third issue is that methods must be established to enable essential research on the correlation o geneticsignatures with disease while preserving individual privacy. To advance personalized medicine, it will be important

or researchers to be able to test stored patient specimens or new genetic characteristics that may be correlatedwith their clinical outcomes. Because the specic genetic tests to be perormed may not be known at the timethe sample is collected, it will be essential to have an inormed consent process that authorizes testing o de-

identied samples or genetic characteristics not anticipated at the time o collection. Such an inormed consentprocess is included in the PCAST recommendation with regard to biospecimen repositories in the Technology and

Tools section o this report.

Given the passage o GINA and the act that other privacy concerns are either addressed by policy

recommendations elsewhere in this report or are complex topics that warrant detailed analysis in their own right,no additional privacy-specic policy recommendations appear warranted at this time.

Physician and Patient EducationThe education o physicians on the proper interpretation and use o data provided by genomics-based molecular

diagnostic tests will be essential or the eective introduction o these diagnostic innovations into practice.Education will require not only eective clinical decision support tools, but also the inclusion o these topics

into medical school and continuing medical education curricula. However, because these new diagnostic tests areonly just beginning to be introduced and most o them are ocused on specialty practices such as oncology andHIV treatment, the medical education experts contacted by PCAST did not yet view this area as a high priority.

23 Public Law 110-233.


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Based on this input, PCAST determined that no specic policy actions on physician education were warranteduntil the number o genomics-based diagnostic tests driving personalized medicine had increased. Nevertheless,

current medical education practices devote little attention to new genetic and molecular technologies despite theirpotentially broad impact on medical practice. Nonspecialist physicians run a risk o partial disenranchisementshould the pace o translation o these discoveries continue to accelerate and should consumers play a more active

role in educating themselves on these topics.

Patients and the public also need careully positioned, realistic, and easily understood inormation about boththe potential and the limitations o personalized medicine in general, and about genomics-based moleculardiagnostics in particular. The patient advocacy community represents a strong and valuable player in this arena

and PCAST supports and encourages their eorts. The National Institutes o Health (NIH), as leader o the Federalbiomedical research establishment, is also very important to these education eorts as are several proessionalmedical associations. Because o the ongoing activities o these various groups, PCAST does not believe additional

broad policy actions to acilitate widespread patient education are necessary until such time as more tests arereaching the end o the development pipeline. Nevertheless, PCAST hopes that this report in its entirety helps lay

a oundation or a vital educational outreach eort to the public on the realistic promise and limitations o thesenew diagnostic tests and o personalized medicine overall.

EconomicsFinally, PCAST considered the economic perspective on personalized medicine. As with other areas o medicaltechnology, medium- to long-term progress will depend on the economic viability o individual personalizedmedicine products brought to market. Each o the priority issues considered in detail in this report the

research activities required to validate genomics-based diagnostics, the regulatory process, and coverage andreimbursement policy will have a strong impact on the cost o bringing new products to market and the

likely nancial return once marketing approval has been granted. In turn, these parameters will determine theattractiveness o personalized medicine to the investor community.

Economists have published a variety o theoretical economic analyses and models relevant to personalized

medicine, several o which were presented to PCAST. These studies were helpul in illuminating the actors thatwill aect economic viability or individual personalized medicine products and the overall cost impact on health

care. However, given personalized medicines early state o development and the corresponding lack o empiricaldata on R&D costs, product pricing, and the clinical and eco

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