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2 Personalized Medicine Promise and Challenges Facing a Nascent Industry Foley & Lardner LLP Nate Beaver Gary Koch Antoinette Konski Judy Waltz Foley & Lardner Personalized Medicine Initiative

3 Precision Medicine Gains National Attention Doctors have always recognized that every patient is unique, and doctors have always tried to tailor their treatments as best they can to individuals. You can match a blood transfusion to a blood type that was an important discovery. What if matching a cancer cure to our genetic code was just as easy, just as standard? What if figuring out the right dose of medicine was as simple as taking our temperature? - President Obama, January 30, 2015 Historical Perspectives on Personalized Medicine It s far more important to know what person the disease has than what disease the person has. - Hippocrates A good physician treats the disease; the great physician treats the patient who has the disease. - Dr. William Osler

4 Select Definitions of Personalized Medicine The use of new methods of molecular analysis to better manage a patient s disease or predisposition to disease. - Personalized Medicine Coalition Providing the right treatment to the right patient, at the right dose at the right time. - European Union The tailoring of medical treatment to the individual characteristics of each patient. - President s Council of Advisors on Science and Technology Health care that is informed by each person s unique clinical, genetic, and environmental information. - American Medical Association A form of medicine that uses information about a person s genes, proteins, and environment to prevent, diagnose, and treat disease. - National Cancer Institute, NIH Source: Paving the Way for Personalized Medicine: FDA s Role in a New Era of Medical Product Development (October 2013) (

5 Personalized Medicine Coalition 2015 Progress Report: Personalized Medicine at FDA 13 of the 45 novel new drugs approved in 2015 are personalized medicines as classified by the Personalized Medicine Coalition (i.e., those therapeutic products for which the label includes reference to specific biological markers, identified by diagnostic tools, that help guide decisions and/or procedures for their use in individual patients). 5 of the 14 oncology novel new drugs approved in 2015 are personalized medicines. Additional Importance of Personalized Medicine on Patient Treatments: Significant number of new personalized medicine indications for previously existing drugs that redefined their intended populations and provide patients with more effective personalized treatment options. Source: Resources/2015_Progress_Report_Personalized_Medicine_at_FDA

6 Examples of Previously Projected Potential Benefits of Adoption of Personalized Medicine 34% reduction in chemotherapy if women with breast cancer received a genetic test prior to treatment. 17,000 strokes could be prevented annually if genetic testing used to properly dose anti-coagulation therapy. $604 million annual healthcare cost savings if patients with metastatic colorectal cancer received genetic testing for the KRAS gene before starting treatment. Source: Personalized Medicine Coalition: Personalized Medicine by the Numbers ( pmc_personalized_medicine_by_the_numbers.pdf)

7 Precision Medicine Initiative: Background Announced during January 2015 State of the Union Address Initial Funding President Obama s 2016 Budget NIH - $130 million to develop cohort to develop understanding and set the foundation for new way of doing research NIH National Cancer Institute - $70 million to identify genomic drivers in cancer and more effective approaches to therapy FDA - $10 million to advance development of high quality, curated databases to support the regulatory structure needed to advance innovation in precision medicine Office of the National Coordinator for Health Information Technology - $5 million for development of interoperability standards to address privacy and enable secure exchange of data across systems

8 Precision Medicine Initiative: Overview Request from NIH Director in March 2015 to the Precision Medicine Initiative Working Group of the Advisory Committee to the Director - blueprint for transformational presidential initiative Framework outlined in Working Group Report accepted by NIH Director in September 2015 Individuals as active partners, not just patients or research subjects One million volunteers for patient cohort Mission Statement: To enable a new era of medicine through research, technology, and policies that empower patients, researchers, and providers to work together toward development of individualized care. Source:

9 Right Time for Precision Medicine Initiative Significant decrease in cost of data storage Tremendous decrease in cost of DNA sequencing Development and wide implementation of electronic health records allows for collection and maintenance of longitudinal health care records at low cost Adoption of personal mobile technology - telehealth and remote monitoring Increase in patient engagement - medical care and research Source: initiatives/pmi/pmi-working-group-report pdf

10 Precision Medicine Initiative: Cohort Assembly Willingness to share data, provide a biospecimen, and be re-contacted for future research Reflect diversity of United States population Source of participants - volunteers and collaboration with healthcare provider organizations Proactive participants sought - feedback and input to be provided during implementation stage Significant representation of cohort members on PMI- CP Governance and Oversight Committee Source: initiatives/pmi/pmi-working-group-report pdf

11 Cohort Assembly (cont d) Maintain trust of patients - central to ongoing collaborative study Standard consent protocol to ensure consistency in terms of enrollment of cohort Option to be provided to cohort participants to join supplementary and complimentary studies outside the PMI cohort Share information with patients - (a) own study results; (b) aggregated results; and (c) patient preferences regarding how much personal information they receive, with ability to change election throughout Source: initiatives/pmi/pmi-working-group-report pdf

12 Data Considerations Core set of high-value variables to be acquired from all patient participants during enrollment Data to be collected and stored centrally Core data from electronic health records, health insurance organizations, participant surveys, mhealth technologies, and biological investigations Data security paramount to maintain trust Clearly articulated response plans in event of breach Participant education regarding privacy issues and re-identification risk Source: initiatives/pmi/pmi-working-group-report pdf

13 Other Precision Medicine Initiative Issues Biobanking Central repository Blood highest priority specimen Genetic sequencing Policy Considerations Governance - will need to be able to provide nimble and innovative approaches given nature of cohort - size, sites, research uses and infrastructure needs Source: initiatives/pmi/pmi-working-group-report pdf

14 Goals of Precision Medicine Initiative Develop quantitative estimates of risk for a range of diseases by integrating environmental exposures, genetic factors, and gene-environment interactions Identifying the determinants of safety and efficacy for commonly used therapeutics Discover biomarkers that identify individuals with an increased risk of developing common diseases Using home and mobile health (mhealth) technologies to correlate body measurements and environmental exposures with health outcomes Source: initiatives/pmi/pmi-working-group-report pdf

15 Goals of Precision Medicine Initiative (cont d) Determining the clinical impact of loss of function mutations Developing new disease classifications and relationships Empowering participants with data to improve health Enrolling PMI cohort participants in clinical trials of targeted therapies Source: initiatives/pmi/pmi-working-group-report pdf

16 Recent Developments November 2015: White House Privacy and Trust Principles for the Precision Medicine Initiative December 2015: Launch of PrecisionFDA May 2016: Data Security Policy Principles and Framework for the Precision Medicine Initiative (Identify, Protect, Detect, Respond, and Recover) July 2016: Draft FDA Guidance on Next Generation Sequencing

17 Recent Grants June 2016: Grant for PMI Cohort Program Biobank Awardee: Mayo Clinic ($142 Million over 5 Years) July 2016: Grant for PMI Cohort Program Data and Research Support Center Awardees: Vanderbilt University, Verily, Broad Institute ($14 Million) July 2016: Grant for PMI Cohort Program Participant Technologies Center Awardees: Scripps Research Institute, Vibrent Health ($20 Million) July 2016: Grant for PMI Cohort Program Healthcare Provider Organizations Regional Medical Centers Awardees: Columbia University Medical Center, Northwestern University, University of Arizona, and University of Pittsburgh ($4 Million each) July 2016: Grant for PMI Cohort Program Federally Qualified Health Centers Pilot Awardees: Various sites in different states ($100,000 each)

18 Personalized Medicine: Regulatory Issues Drugs and devices regulated under the Federal Food, Drug and Cosmetic Act. Biologics regulated under the Public Health Service Act CDER therapeutic medicines CBER diagnostic devices, biologic therapeutics CDRH diagnostic and therapeutic devices Complex framework for co-development of therapeutic and companion diagnostic.

19 Personalized Medicine: Regulatory Issues Different regulatory pathways Regulatory requirements for devices, drugs and biologics are different. Laws not written with personalized medicine focus in 1938, 1962 or otherwise. FDA s attempt to coordinate: In 2009 FDA created a Personalized Medicine Staff within the Office of In Vitro Diagnostic Device Evaluation and Safety to coordinate.

20 Personalized Medicine: Regulatory Issues Regulatory Processes for co-review of diagnostic and therapeutics Often different companies have developed the therapeutic and diagnostic (companion). Likewise different centers at FDA involved Co-development requires significant coordination Between developers and FDA Centers

21 Personalized Medicine: Regulatory Issues In Guidance FDA has noted that if the device and its test results are essential for the drug s safety and effectiveness it will not approve the drug without also approving the companion diagnostic See In Vitro Companion Diagnostic Devices deviceregulationandguidance/guidancedocuments/ucm pdf

22 Personalized Medicine: Regulatory Issues Last week FDA also published Principles for Codevelopment of an In Vitro Companion Diagnostic Device with a Therapeutic Product. See document/ucm pdf. The guidance is intended to be a practical guide to assist therapeutic product sponsors and IVD sponsors in developing a therapeutic product and an accompanying IVD companion diagnostic, a process referred to as codevelopment. This guidance describes: general principles to guide codevelopment to support obtaining contemporaneous marketing authorization for a therapeutic product and its corresponding IVD companion diagnostic, certain regulatory requirements that sponsors should be aware of as they develop such products, considerations for planning and executing a therapeutic product clinical trial that also includes the investigation of an IVD companion diagnostic, and administrative issues in the submission process for the therapeutic product and IVD companion diagnostic.

23 Advancing the Science of Personalized Medicine Biomarker Discovery and Clinical Adoption Medical Diagnostics Prognostic and Diagnostic Markers Personalized Therapies Sample Analysis Sample Preparation Sequencing Technologies Site Specific Analysis Whole Genome or Next-Gen Sequencing

24 Advancing the Science of Personalized Medicine Biomarker Discovery and Clinical Adoption Population Genetics and Analysis Multiplex Analysis of Multiple Biomarkers, Clinical Chemistry, Familial Genetics, Environmental Factors Matching Patients to Clinical Trials Post-Approval Monitoring Integration with Consumer-Controlled Devices

25 Pre-2012 Patenting Strategies Isolated natural products, useful as biomarkers for diagnosis and therapy DNA, proteins, analytes, selected patient samples Correlations between biomarkers and clinical endpoints Disease state, therapeutic index, treatment options Methods for clinical trial design and implementation

26 The Supreme Court s Reinterpretation of Patent Eligible Subject Matter Governed by 35 U.S.C. 101 Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. Historical Permissive Interpretation anything under the sun Judicial exceptions: abstract ideas, laws of nature, natural products Patents should not pre-empt future research The New Normal Mayo v. Prometheus (diagnostic method claims) ACLU v. Myriad (natural products and diagnostic methods) CLS v. Alice (abstract ideas computer implemented technology and diagnosis)

27 Can It Be Patented? Two Part Test Does the invention claim a judicial exception? If no, then the invention passes 101 Is the invention merely directed to detecting the natural law or product? Is the claimed invention structurally or functionally different? Is it an application of the natural law? (Sequenom v. Ariosa and cffdna) If yes, then, does the claim recite something more than the judicial exception? What is the inventive concept? Is the claim preemptive? See examination-guidance-and-training-materials

28 Developing a Reimbursement Strategy: Do It Early! Impacts early product development funding; long term prospects FDA approval is not the same as coverage or reimbursement Coverage and reimbursement requirements differ by payer, including what evidence is required Determine specific payers to target (e.g., Medicare is not a good market for fertility/pregnancy products, but Medicaid may be) May influence design of clinical trials (e.g., comparative info amongst products; specific population) Least costly alternative (why is your product better than those already covered/reimbursed) Tiering preferred therapy must fail before a new one is covered May depend upon clinical setting determine who will be your point of sale (e.g., physician or hospital purchasing staff) Trend towards bundled payments or outcomes

29 Reimbursement Strategy, cont. Tools: Innovators Guide to Navigating Medicare (Ver. 3), available at Downloads/Innovators-Guide-Master pdf Includes discussion of how to get a code (CPT, HCPCS) Be prepared for changes: new CMS proposed fee schedule for 2017 would reduce rates for CareDx s AlloMap by 74%; Veracyte s Afirma GEC by 30%; and Genomic Health s Oncotype DxColon by 72% 60 days for comments; public meeting on 7/18/2016

30 Protecting Access to Medicare Act of 2014 (PAMA) Redesign of Lab Reimbursement Creates Section 1834A of the Social Security Act, 42 U.S.C. 1395m-1, Improving Policies for Clinical Diagnostic Laboratory Tests (passed 4/2014) Top points: Beginning 1/1/2016, and every 3 years thereafter (or annually for ADLTs), applicable laboratories must report for a data collection period each clinical diagnostic laboratory test that the lab furnishes during the period Payment on or after 1/1/2017 shall be equal to the weighted median determined for the test for the most recent collection period Payment for new lab tests that are not ADLTs cross-walking as described in 42 C.F.R to the most appropriate existing test ; if no appropriate existing test, then gapfilling looking at (1) charges for the test and routine discounts to charges; (2) resources required to perform the test; (3) payment amounts used by other payors; (4) charges, payment amounts, and resources that may be comparable or otherwise relevant; (5) other criteria the Secretary deems appropriate Payment for ADLTs during initial period of three quarters, the payment amount is based on list price; after that market rates apply (CMS may establish temporary HCPCS codes.) Information is confidential and shall not be disclosed except in certain specified limited situations. Payor shall not be identified on information reported. Name of applicable laboratory exempt from disclosure under 5 U.S.C. 552(b)(3) No administrative or judicial review of the establishment of payment rates

31 The PAMA Statute - Continued Private Payor: includes health insurance issuer and group health plan; Medicare Advantage Plan; Medicaid managed care organization Certification An officer of the laboratory shall certify the accuracy and completeness of the information reported. Proposed Rule says this should be the President, CEO, or CFO Civil Money Penalty failure to report or misrepresentation or omission of data = CMP of up to $10,000/day for each failure to report or each such misrepresentation or omission

32 PAMA CMS Final Rule (CMS-1621-F) 81 Fed. Reg (June 23, 2016) (AKA CMS-1621-F) Significant revisions from Proposed Rule: (as identified by Personalized Medicine Coalition) Extended timeline for implementation to Jan. 1, 2018 (one year); revised definition of advanced diagnostic laboratory test (now includes proteinonly tests rather than just DNA or RNA biomarkers); NPI rather than TIN used for reporting Initial Data Collection Period 1/1/2016 6/30/2016 Reporting periods: for most labs, every 3 years; for ADLTs reported annually Data collection period: Jan. 1, 2016 June 30, 2016; Reporting period: Jan. 1, 2017 Mar. 30, 2017 If no applicable information, CMS will use cross-walking or gap-filling to price the test

33 ADLTs Defined in Statute and in Final Rule: Clinical laboratory test covered under Medicare offered and furnished by a single laboratory, for use only by original developing laboratory or successor owner Meets one of the following: test is an analysis of multiple biomarkers of DNA, RNA or proteins combined with a unique algorithm to yield a single patient-specific results; test is cleared or approved by the FDA; test meets other similar criteria established by the Secretary (none yet set forth) Did not adopt proposed rule to define as a laboratory with a single CLIA certificate Cf., FDA s approach on LDT s

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