Data Transmission, Personalized Medicine, and Privacy

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Health care analytics make use of patient data to inform treatment decisions and is increasingly moving front and center in personalized medicine. For example, the President’s Precision Medicine Initiative (see post of January 26, 2016) has rolled out a program to collect health data from one million volunteers to inform and guide future research. Consumers too, outside the confines of the traditional health care system, are collecting and crunching their own data points with the help of smart phone apps that measure the numbers from steps taken in a day to blood glucose levels.

It is not inconceivable that this data will be shared domestically and globally, as informed analytics will drive research and development of new therapeutic interventions and preventive health care. The EU and the US recently reached a tentative agreement relating to the legality of cross-border data transfers. Under EU law, companies have to step through certain hoops to legally be able to transfer personal information, including health information, to the US. Until recently, one of the mechanisms to do this was for the US company to certify under the Safe Harbor agreement between the US and the EU. In October of last year, a high level EU court invalidated the Safe Harbor agreement due to deficient privacy and security protections, rising primarily out of the NSA surveillance revelations.

Technically since that time, companies relying on Safe Harbor have been violating EU law when transferring health information from the EU to the US. On February 2, the EU and the US reached a tentative agreement for a new Safe Harbor framework, now called “Privacy Shield.” For more information on the tentative agreement, see Foley & Lardner’s Legal News Alert: Tentative Agreement on New “Privacy Shield” Framework for Transatlantic Data Flows Reached.

Foley’s Legal News Alert is co-authored by James Kalyvas, Chanley Howell, Aaron Tantleff, Sophie Lignier, Steve Millendorf, and Michael Chung.

The President’s Precision Medicine Initiative – The First Annual Check-Up

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Watching President Obama’s recent 2016 State of the Union Address reminded me that one year has passed since the President announced a new “precision” or personalized medicine initiative to advance personalized, effective therapies for the American public. It was during his 2015 State of the Union Address that the President stated:[1]

“[T]onight, I’m launching a new Precision Medicine Initiative to bring us closer to curing diseases like cancer and diabetes, and to give all of us access to the personalized information we need to keep ourselves and our families healthier. We can do this.”
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3 Pressing Challenges for Personalized Medicine

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Personalized medicine can be described as the science of targeted therapies. Advances in diagnostic and molecular medicine have made it possible to more precisely identify alternative treatment options for patients based on their unique genetic or clinical profiles. According to an article published by the FDA in the spring of 2015 (FDA Continues to Lead in Precision Medicine), targeted, personalized therapies have been a priority for the agency since the 1990s when Herceptin (trastuzumab) was approved for treating breast cancer patients expressing high levels of the HER-2 biomarker. The FDA article also notes that 30-targeted therapies were approved since 2012 and in 2014 alone, eight of the 41 novel drugs approved by the Agency were targeted, including:

1. Lynparza (olaparib) for the treatment of advanced ovarian cancer.
2. Blincyto (blinatumomab) for the treatment of B-cell precursor acute lymphoblastic leukemia (ALL).
3. Harvoni (ledipasvir and sofosbuvir) to treat patients with chronic hepatitis C infection.
4. Viekira Pak (ombitasvir, paritaprevir, dasabuvir and ritonavir) for the treatment of chronic hepatitis C infection.
5. Cardelga (eliglustat) for the long-term treatment of Gaucher disease type 1.
6. Beleodaq (belinostat) for the treatment of peripheral T-cell lymphoma.
7. Zykadia (ceritinib) to treat patients with non-small cell lung cancer (NSCLC).
8. Vimizim (elosulfase alpha) for the treatment of Mucopolysaccharidosis Type IV (Morquio Syndrome).

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Navigating the Diagnostic Commercialization Process

ABC-Logo-CopyPerryDimas2-150x150Guest Post By: Perry Dimas, Senior Vice President and General Manager for Premier Source, part of AmerisourceBergen

The 2015 Business of Personalized Medicine Summit was an inspiring day with talented professionals. One key takeaway was that while diagnostics hold the promise of getting the right medicine to the right patient at the right time, much work remains to develop a standardized system of approving and covering diagnostic tests to ensure patient access.

As an industry, diagnostics are settling into a commercialization pathway similar to medicines, but we lack some of the foundational measures that make it possible. Shepherding a diagnostic test from pre-launch to commercialization can often and accurately be described as “building the plane while we fly it.” Premier Source is fortunate to support diagnostic manufacturers through the regulatory, coding, and coverage/reimbursement challenges that are clearly defined for medicines but not these informative tests. Why are these factors uniquely challenging to diagnostic manufacturers, and what will change to open up more opportunity?

Regulatory Approval:

Most diagnostic innovators establish a Laboratory Developed Test (LDT) business model and administer tests out of their own laboratories. In the diagnostics industry, validation of the test is currently regulated by CMS’s Clinical Laboratory Improvement Amendments (CLIA).

Importantly, the FDA has proposed framework for diagnostic oversight, but the structure and timing of these regulations have not yet been finalized. It’s imperative to understand the FDA’s process when it is announced and the impact it will have on commercialization of existing and new diagnostic tests. While it will end a period of confusion for many stakeholders, there will be a period of transition before a potential streamlining occurs and tests are better enabled to reach the highest potential of offering diagnoses and guidance to providers and patients.

Coding:

For most products and services offered in healthcare, such as procedures, medications, and diagnoses, a system for coding exists and is consistently used across providers and payers. For example, medications and dosages are assigned a J-code, so the payer quickly understands what it is reimbursing. Unfortunately, the same process does not exist for diagnostic testing; there is not currently a coding structure to identify what each test does. Lacking an appropriate code, many diagnostic companies use a miscellaneous CPT code. This raises red flags and makes the process for being reimbursed for a valuable healthcare tool a challenging process for the manufacturer.

An industry standard for coding would reduce questions among payers, streamline the billing process for providers and allow for overall industry tracking of use. The AMA has been working to apply more transparency and structure to diagnostic coding, but it is still a work in progress. Premier Source frequently assists manufacturers with coding hurdles to ensure they are reimbursed appropriately.

Coverage and Reimbursement:

While the industry continues to work to address the challenges presented by the lack of standardized coding, diagnostic manufacturers can take steps to see greater reimbursement success within this developing environment. Acquiring the right data to demonstrate clinical utility is especially crucial. The vast majority of the time, this data is accumulated post-launch, a key difference in the commercialization of diagnostic tests versus medications. Specifically, payers look for observational trial data, such as how a test, once ordered by a physician, impacts patient management and effects health outcomes. And, how exactly did it help?

There is a proven pathway that Premier Source has developed with payers to guide diagnostic manufacturers through this process. We help secure meetings with medical directors of governmental and commercial payers to make sure data collection is aligned with what the payer wants to receive. Proving clinical utility can help catapult diagnostic tests to widespread adoption within the payer community.

Currently in its infancy, the diagnostic space has many question marks. While admittedly no one has all of the answers, Premier Source and our many partners in the field are working to determine the best practices and options for diagnostic manufacturers to most effectively navigate the commercialization process. The conference may have ended, but the conversation needs to continue to drive the adoption of diagnostic tests as an informative and valuable component of personalized medicine.

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Perry Dimas is Senior Vice President and General Manager for Premier Source, the part of AmerisourceBergen that focuses exclusively on the unique commercialization needs of novel diagnostic providers and manufacturers, particularly those whose tests advance the utilization of personalized medicine. Premier Source leads a team of experts who partner with personalized-medicine diagnostic companies, providing reimbursement consulting and contracting services as well as back-end billing services. Mr. Dimas and his team work closely with Lash Group, the leader in patient support services for the pharmaceutical industry, to maximize operational efficiency and ensure diagnostic customers access best in class technology infrastructure and solutions to support physicians and patients.

Mr. Dimas is also founder of The Diagnostic Conference, which is aimed at bringing together the principal thought leaders and executives in personalized medicine from the leading diagnostic companies and pharmaceutical manufacturers, to discuss the current challenges and subsequent opportunities for launching a successful diagnostic test in the U.S. marketplace. Prior to joining Premier Source Diagnostics, Mr. Dimas led the reimbursement efforts for Precision Therapeutics and XDx. These two diagnostic companies are considered pioneers in the laboratory developed test business model. In this business model, the molecular diagnostic is performed in a CLIA certified laboratory and the company is at financial risk for all services. He was responsible for all billing, appeals, and payer relations activities for both companies and brings a wealth of commercial knowledge of how to successfully launch a diagnostic test. Mr. Dimas has more than 15 years of commercialization and reimbursement experience with novel diagnostics.

FDA Oversight of Diagnostic Medicine – A Trap for the Unwary

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Diagnostic medicine is experiencing new challenges at the USPTO and the U.S. Food and Drug Administration (FDA). Under a new FDA proposal, laboratory developed test providers, previously exempt from FDA oversight, must now consider if their diagnostic test may be subject to FDA oversight, either as a moderate risk (Class II) or high-risk (Class III) device. If so, the test provider may then need to seek FDA approval or clearance through a premarket approval application (PMA) or a 510(k) premarket notification submission. During the 510(k) process, a company asserts that its new test or device is substantially equivalent to an existing predicate device for the purpose of establishing safety and effectiveness. However, undiscerning statements of “substantial equivalence” that are not narrowly tailored to the safety and efficacy of the new device may seem inconsistent with the company’s prior statements before the USPTO regarding the patentability of the device. These apparent discrepancies can be exploited during patent litigation to undermine the enforceability or validity of the patent asserted. Thus, a test develop may inadvertently jeopardize patent assets in an attempt to secure expedient regulatory clearance for a new device. This dilemma is partly attributable to the often large lag between the patent procurement and market clearance of the device or test. Continue reading this entry