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3
Test Developers
Important Points Highlighted by the Individual Speakers
• Regulation of genomic diagnostic tests can be a critical factor
in the extent of use of those tests and in the competitiveness of
companies.
• Standards, quality control, regulatory guidelines, and technol-
ogy assessments all can facilitate the movement of a test from
bench to bedside.
• Any coverage and reimbursement reform should recognize the
value of advanced medical diagnostic tests, their impact on
health care, and the resources needed to develop and validate
them.
• Establishing the value of a test requires that its use be com-
pared to traditional practices.
Four speakers at the workshop addressed the development of genomic
diagnostic tests from the perspective of test developers. All pointed to the
need to develop better evidence regarding the value of a test, which in turn
can affect coverage and reimbursement. They also called for clear regula-
tory standards to guide test development.
17
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18 GENOME-BASED DIAGNOSTICS
REGULATORY CLARITY IN A COMPETITIVE MARKETPLACE
Quest Diagnostics is one of the world’s leading providers of diagnostic
testing, information, and services. The company serves half of U.S. physi-
cians and receives samples from half of U.S. hospitals every day. In addition
to providing clinical services using both laboratory developed and FDA
approved tests, Quest develops LDTs under CLIA requirements and com-
mercializes in vitro diagnostic kits under FDA oversight. Quest also pro-
vides genetic counseling services for physicians, works closely with major
pharmaceutical companies to facilitate the introduction of new therapeutics
and companion diagnostics, provides electronic health records for health
plans and patients, and even has a smart phone app that allows patients
to receive their own test results. “We deliver high-impact, high-value, low-
cost information to the health care system,” said Nicholas Conti of Quest.
Conti and his colleagues are responsible for evaluating new technolo-
gies that will become clinical diagnostic tests to be offered by Quest.
They are interested in any field of medicine and in all disease states, since
“genomic-based testing impacts all of them.”
Innovation and Competitiveness
Reducing costs and delivering services based on evidence of value are
vital to health care in the 21st century, said Conti. Tremendous innovations
are occurring not only in the technologies used to discover new biomarkers,
but also in their application to clinical practice. In an increasingly global
marketplace, delays or friction points involving regulation or reimburse-
ment can compromise a company’s competitive standing and ability to
create sustained high-paying jobs.
Improving Rather Than Adding Regulation
Overwrought regulation or limits to physician discretion could stifle
innovation and the practice of medicine. Increased regulatory oversight
and the application of evidence-based protocols are worthwhile goals, said
Conti, but the issues are complex and long-standing. The current system by
which LDTs are regulated by CMS under CLIA has yielded many diagnostic
innovations that have radically improved the practice of medicine. HIV
testing, genetic tests for mutations causing hypertrophic cardiomyopathy,
and screening tests for neurological conditions, for example, are all based
on LDTs.
The practice of medicine would be dramatically changed if all tests
were required to obtain FDA approval, according to Conti. For certain
medical specialties, the generation and scope of evidence vary greatly, par-
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19
TEST DEVELOPERS
ticularly where the adoption cycle is quick and the peer-reviewed literature
is critical. The testing pipeline in these disciplines would dry up, he said,
and many LDTs that are already incorporated into practice guidelines
would disappear. For example, with infectious diseases, mutations occur
at a rapid pace, which infectious disease specialists use to track and treat
disease. In such cases, if companies were required to go through an FDA
submission process, by the time approval is gained, the product would no
longer be useful.
The incentives for diagnostic companies to develop some of these tests
as FDA-approved kits are also lacking, with companies citing too small a
market and prohibitive study costs for many of the tests. If a good study
for a low-volume test can demonstrate concordance with the published
literature, developing that test and bringing it to market is not as costly an
endeavor, said Conti. There is a need to balance increased regulation with
its affects on medical practice and innovation. “That is really where the
value of CLIA comes in.”
The important question to ask is not whether there should be more
regulation, but rather is it better regulation? Can duplicative regulatory
efforts be eliminated? Can the existing system be improved rather than
constructing a new system? “That’s the discussion we need to have,” said
Conti.
Protecting Physician Discretion
Limiting the incentive to develop or access innovative tests could ham-
per advances in patient management, according to Conti. The medical sys-
tem in the United States is grounded on the concept that physicians are the
arbiters of medical care. In the interests of their patients, they will exercise
their medical discretion in ordering, interpreting, and delivering diagnostics,
therapies, and other forms of care. Reference laboratories such as Quest
provide physicians with access to tests for which published research indi-
cates that the test can improve the care of patients. Potential interference
with this discretion “should be considered with the greatest of caution.”
Solutions to the Problems
Conti offered several solutions to the problems currently facing the
development of genomic diagnostics. First, genomic test development needs
clear regulatory certainty. Federal regulation should not be duplicative, as
would be the case if FDA had to clear LDTs. Instead, legislation should build
on what works by modernizing CLIA. Agency decision making should be
transparent, with rulemaking by notice and comment rather than through
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20 GENOME-BASED DIAGNOSTICS
guidances. People who are qualified in both the public and private sectors
should come together to discuss problems and develop solutions.
Finally, stakeholders should be patient and allow some of the initiatives
currently under way to progress. Conti cited recent work by the American
Medical Association to develop CPT codes for multivariate tests (AMA,
2011), CMS’s modification to reimbursement procedures for CPT code
stacking (CMS, 2012), and the development of the National Institutes of
Health (NIH) Genetic Test Registry as examples (NIH, 2010).
IMPROVING THE EFFICIENCY OF TEST DEVELOPMENT
MammaPrint is a multigene index assay that uses the gene activity of
a tumor sample to identify the risk of recurrence for an individual breast
cancer patient, said Laura van ‘t Veer of the University of California, San
Francisco. She drew upon her experience in developing the MammaPrint
test to discuss increasing the efficiency of bringing a test from research
discovery to clinical use.
The movement of a genomic test from bench to bedside has two impor-
tant end points, van ‘t Veer said. One is the use of the test in clinical trials
and the second is the commercialization of the test. The path from discovery
to clinical trials involves discovery, confirmation of research, independent
validation, quality assurance, regulatory oversight, and the initiation of a
trial with a clinical trial group. To commercialize a test, additional steps are
needed which include technology assessment, the development of guideline
recommendations, a determination of cost-effectiveness, and agreement by
the health care system to reimburse the use of the test.
Standardization of validation protocols will facilitate the efficient devel-
opment of genomic-based tests, stated van ‘t Veer. She and her colleagues
early on began working with clinical trial groups to conduct independent
validation using external audits and a predefined statistical protocol in
the development of MammaPrint (Buyse et al., 2006). The purpose of the
initial validation was to demonstrate the robustness of the risk assessment
and to establish a background for the subsequent clinical trial. Many of
the data used in the independent validation were separately evaluated by
experts in informatics, clinical data, pathology, and statistics. Particularly
important are predefined acceptance criteria, which show that a test is
being validated and reviewed by external parties. “A lot of the literature
that is currently around on validation of genomic tests doesn’t include all
the independent steps, and independent review, as we’ve learned over the
years, is very crucial.”
A second opportunity for improved efficiency lies in quality control.
Quality assessment for clinical trials involves a number of technical fea-
tures, including precision, reproducibility, repeatability, accuracy, sensitiv-
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TEST DEVELOPERS
ity, and robustness. Software validation is also critical, van ‘t Veer observed,
before a test is used with patients.
Oversight of Genomic Tests
In order to ensure good quality control and regulatory oversight,
genomic tests used in clinical trials should be required to obtain an inves-
tigational device exemption (IDE) from FDA, said van ‘t Veer, and in
the case of companion diagnostics this should be included as part of the
Investigational New Drug (IND) application. Institutional review boards
(IRBs) also need guidance on how to review genomic tests. “There are large
differences between IRBs of different institutions in how they review these
tests. Some metrics—what they should look at—should be established.” In
cases of local hospital trials, where broader oversight is not available, enti-
ties should be established to review genomic tests for clinical trials. Mean-
while, FDA oversight of in vitro diagnostic tests “is working,” according
to van ‘t Veer. Postmarket surveillance and medical device reporting create
much more standardized reporting around the use of these tests, which is
important for patients.
Educational Needs for Decision Making
There is a great need for education about the clinical use and clini-
cal impact of genomic tests. Many require the use of new technology by
patients and physicians, making their assessment essential to facilitating
proper use and understanding. Even for tests that are currently available,
use is not 100 percent. Provision of more information over the Internet or
through some other means could help move the field forward, van ‘t Veer
said. For reimbursement agencies, cost-effectiveness studies and technol-
ogy assessments which review logistical processes in hospitals should be
included as part of their procedures for gaining information of clinical util-
ity. van ‘t Veer also stressed that guidelines committees and regulatory bod-
ies need to come together and harmonize their definitions of clinical utility,
which currently vary from one group to another and between situations.
OVERCOMING OBSTACLES TO TEST DEVELOPMENT
Diagnostic expenditures account for only about 2 percent of health
care costs in the United States, but are used to direct 70 percent of clinical
decision making (West, 2011), said Russell Enns of Cepheid while speaking
on behalf of Advamed Diagnostics. Molecular diagnostics in particular has
been the fastest-growing sector of the diagnostics industry and it continues
to grow at a faster pace than other areas of traditional laboratory medicine.
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22 GENOME-BASED DIAGNOSTICS
Enns discussed the three biggest obstacles that need to be overcome in the
development and implementation of these tests.
Establishing Safety and Effectiveness
Novel technologies present great challenges for FDA’s premarket review
paradigm, said Enns. What is needed is a modernized, risk-based regulatory
approach for all diagnostics that would support public health, encourage
innovation, improve the transparency of the FDA decision process, and
focus review resources on the products with the highest or most unknown
risk.
Enns called particular attention to class II devices, where it has become
more and more difficult to grandfather a device to pre-1976 standards.
However, Enns has cleared 34 class II 510(k) molecular diagnostic devices
through FDA. “My takeaway is that the FDA system does work,” he said.
“It has worked for me not only with infectious disease diagnostics, but also
for cancer and genetic tests. I would say that it’s been just as successful
using the system in breast cancer and bladder cancer.” However, the system
needs refinements if test developers are to remain strong in the United States
and continue to provide high-paying jobs for researchers, drug developers,
and state-of-the-art manufacturing personnel.
In the European Union, the IVD Medical Devices Directive allows most
products to be introduced into the market through the self-declaration of a
compliance process with standards issued by the International Organization
for Standardization. “This system has been in place for about 10 years and
has served Europe well,” said Enns. “Perhaps Congress can take a closer
look at the EU system to better assess global competition while maintain-
ing product safety and effectiveness standards.” However, Enns cautioned
that drug development standards should not be overlaid onto diagnostics
products.
Establishing the Value of Diagnostic Tests
Establishing the medical necessity or the value added by a diagnostic
test would help overcome what Enns termed “the largest obstacle to [the]
successful introduction of new molecular diagnostic tests and platforms”—
reimbursement coverage. Payment reform is needed to recognize the value
of advanced medical diagnostic tests, their impact on treatment and man-
agement decisions for patients, and the resources needed to develop and
validate tests. The current reimbursement rates for diagnostic tests are
based on an outdated, flawed fee schedule that has not even kept pace with
inflation, according to Enns. Inadequate payment affects innovation, as well
as patient access to new tests. “It’s much simpler to make major medical
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TEST DEVELOPERS
discoveries and advances in medical diagnostics than it is to obtain reason-
able and timely reimbursement in coverage decisions.” A legislative solution
to address payment reform may be needed to ensure the development of
“reliable and transparent procedures open to public review and debate by
all stakeholders,” said Enns.
Establishing Performance Standards
Reliable and accurate performance standards and practice guidelines
for new genomic tests need to be established, stressed Enns. Patients deserve
standardized, consistent test results regardless of where or when tests are
performed. “Patients need to be able to go to any cancer institute in this
country and [have] a blood sample drawn for an accurate and reliable test.”
Many organizations develop performance standards for such attributes as
analytical sensitivity and specificity, interference, precision, reproducibility,
and clinical sensitivity and specificity. Enns described in particular the Clini-
cal and Laboratory Standards Institute, where he has volunteered for more
than 25 years. Over the past two decades, the institute has developed 16
different molecular standards for laboratory medicine, many of which have
been officially recognized by FDA as performance standards.
Enns concluded by saying that the United States can keep doing what
it has been doing or it can keep up with changes in laboratory medicine by
modulating regulatory requirements and professional practice standards.
“Since the United States now represents less than 5 percent of the world’s
population, we can stick our proverbial heads in the sand and watch
the world pass us by. [But] there’s no need for that to happen. . . . Let’s
stay competitive, let’s continue to solve disease problems, and let’s further
improve the quality of life and the length of productive lives by working
together on solutions to these obstacles.”
PRINCIPLES FOR SUCCESS
Cancer kills more than a half-million people in the United States each
year (Siegel et al., 2012), yet it is often still treated with products of limited
clinical utility and a one-size-fits-all approach, said Steven Shak of Genomic
Health. As a result, “we punish the many to benefit the few.” For example,
the classic B-20 study of the National Surgical Adjuvant Breast and Bowel
Project, which looked at chemotherapy plus tamoxifen versus tamoxifen
alone in the treatment of patients with auxiliary lymph node–negative,
estrogen receptor–positive breast cancer, showed that only 4 out of every
100 women benefit from chemotherapy (Figure 3-1) (Fisher et al., 1997).
At the end of the 20th century, a new generation of technologies was
developed which was used to sequence the human genome. These tech-
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24 GENOME-BASED DIAGNOSTICS
Tam vs Tam + Chemo – All 651 Pts
Propor on Free of Distant Recurrence
1.0
0.9
0.8
0.7
0.6
Only 4 Out of 100 Women Benefit
0.5
0.4
0.3
0.2 N Events
All Pa ents
424 33
Tam + Chemo
0.1 p = 0.02
Tam 227 31
0.0
2 4 6 8 10 12
0
Years
FIGURE 3-1 Little significant benefit is seen from use of chemotherapy in addition
to tamoxifen treatment for patients with lymph node–negative, estrogen receptor–
positive breast cancer.
NOTE: Tam, tamoxifen; Chemo, chemotherapy.
Fugure 3-1
SOURCE: As adapted by Shak from Fisher et al., 1997.
niques have revealed the underlying complex biological systems involved in
cancer and suggested many new drug candidates. However, efforts to code-
velop drugs and diagnostics have not been very productive, Shak observed,
with just a few exceptions. The directed use of trastuzumab for metastatic
breast cancer patients that test positive for HER2 (Slamon et al., 2001) has
saved tens of thousands of lives, but other tests linked to biologic therapies
have not emerged from clinical evaluation, said Shak.
Oncotype DX
Genomic Health initiated an effort in 2000 to develop and commercial-
ize molecular diagnostic tests that would empower cancer patients and their
physicians to be able to select the right treatment based on the underlying
biology and on reliable evidence of clinical utility. “That was a tall goal,”
said Shak, but the company’s Oncotype DX breast cancer assay, which was
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TEST DEVELOPERS
developed as an LDT under the provisions of CLIA, has now been clinically
validated in 13 studies involving more than 4,000 patients and it has been
used in more than a quarter million patients since becoming available in
2004. The test is reimbursed in the United States by Medicare and all the
major payers, is provided for patients in more than 65 countries, and has
been incorporated in published treatment guidelines.
Shak described several key principles on which success in the biomarker
field is based. First, a test needs to deliver what patients, physicians, regula-
tors, and payers need and this has to be considered at the very beginning
prior to development. Most important, it should be “fit to purpose,” with
evidence relevant to that specific purpose. It should give consistent results
across multiple, well-designed studies. And the test must be shown to have
value beyond traditional measures to all stakeholders. To do that, the test
needs to be compared head-to-head with what has been used traditionally,
so that comparative effectiveness is built into the strategy from the begin-
ning. “The short version of this is that you need to bring the rigor of drug
development to the development of diagnostics, but also fit for purpose,”
said Shak.
Shak laid out a roadmap to establish clinical utility that consists of the
following steps:
• Definition of purpose
• Technical feasibility
• Development studies
• Analytical methods finalization
• Analytical methods finalization and validation
• Clinical validation studies, including comparative effectiveness
• Treatment decision studies
• Health economic analysis
Shak pointed out that diagnostics can have a major impact on treat-
ment decisions. Seven studies of the Oncotype DX recurrence score in 912
patients showed that treatment decisions changed 30 percent of the time
compared with what would have been done without the recurrence score.
This is one way of addressing the question asked by Hayes: Is a test being
used appropriately?
The second principle Shak listed is that technical innovation needs to
be brought to standardized implementation. This requires that all assay
methods and procedures be defined prior to clinical validation studies in
such areas as specimen eligibility, reagent qualification, instrument valida-
tion, controls and calibrators, and linearity, precision, and reproducibility.
CLIA is built on regulations and principles of laboratory medicine
“that have been in existence now for decades and really work,” said Shak.
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26 GENOME-BASED DIAGNOSTICS
He cited the CLIA-certified reference laboratory process accredited by the
College of American Pathologists (CAP) for the 21-gene recurrence score,
which uses more than 150 standard operating procedures, 94 forms, and
an information technology system that looks at every reagent and ensures
that the appropriate quality control is used. “An inspector can come into
the Genomic Health [laboratory]—and we’ve had 10 inspections—and say,
‘On March 7 we want you to look at the tenth test that you did that day
and then pull out the quality control metrics for every reagent that was used
in that particular case.’ We monitor that and can do that.”
The third and final principle Shak listed is that the development of
diagnostic tests requires collaborations, clinical research funding, and the
skills, processes, resources, and incentives to do it right. “Sometimes the
hardest thing isn’t the technology; it’s people.”
One particular obstacle Shak mentioned is the potential need to address
all of the payers individually, of which there may be 100 or more in the
United States and abroad. Innovative systems need to be developed by pay-
ers to gauge the value of the diagnostic in their own system. He described
a method implemented by Clalit, which is the largest payer in Israel, to
document the value of Oncotype Dx use. Clalit created a simple form that
physicians filled out in order to get access to the test, in which they indi-
cated what they would have done without it. “Since they’re the payer, they
could collect what was done. They could rapidly document for themselves
the impact of the test in their clinical practice.” Another innovative system
implemented by CareFirst and Highmark was to pilot a program which
provided greater reimbursement at a higher rate for the appropriate use of
Oncotype Dx. “We need to be innovative in the way that we think about
capturing data in clinical practice . . . and providing incentives around it,”
said Shak.
He also listed obstacles and potential solutions to the development of
diagnostic tests, some of which were also described by other speakers:
• There is a knowledge and experience gap among those working
in and assessing this new field which needs to be closed through
continued education.
• Current incentives have the effect of encouraging individual rather
than team science. Leadership, teamwork, and collaboration needs
to be incentivized and rewarded.
• Reimbursement is uncertain, which points to the continued need to
move to pricing based on value.
• Regulation is uncertain, which points to the need for regulations
that are fit to purpose and suitable for continued rapid introduc-
tions of new and improved tests.
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TEST DEVELOPERS
Shak concluded by observing that his company has been working in
recent years on next-generation sequencing technologies that have made it
possible to investigate not just candidate genes but the entire transcriptome.
“I never would have dreamed in my lifetime that it’s now possible to see
. . . over 50 million reads from a single sample. How do we analyze that
data? What are the bioinformatics? How do we apply and harness this
technology? The principles that we’re talking about here are what is needed
to make it possible to actually bring these advances in a responsible way
to patients.”
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