Precision Medicine Initiative More about Data than Genetics


President Obama may have raised more questions than answers Friday when he followed-up to a State of the Union remark and laid out a plan to add $215 million in funding for Precision Medicine in what he called “one of the biggest opportunities for breakthroughs in medicine that we have ever seen.”  One might reasonably conclude the President’s statement is hyperbolic since the magnitude of this investment would equal less than 0.01% of one year of U.S. health spend.  However, we would not underestimate the disruption to some existing practices or new markets that may be formed on the back of this initiative.

The irony of this most recent commentary could mean that the Precision Medicine initiative of 2015, similar to the HITECH Act of 2009, could end up being far less costly yet more impactful than this administration’s signature ACA legislation and do more for its healthcare legacy.

Defining “Precision Medicine”    President Obama characterized it as “access to treatments that deliver the right treatment at the right time.”  What does that mean?  describes it with more clarity as “matching diagnosis and treatment strategy to each individual’s unique molecular makeup.”  Many will rightly associate Precision Medicine with Personalized Medicine and for purposes of this discussion it is a distinction without a substantive difference.  The vernacular switch to “precision” from “personalized” was likely initiated by a 2011 National Academy of Sciences report  which defines Precision Medicine as “the use of genomic, epigenomic, exposure, and other data to define individual patterns of disease, potentially leading to better individual treatment.”

Taking patient-centered care to a new level.  The shift toward patient-centered care and consumerism in healthcare are prevalent themes included on these blog pages.  While we can point to a tsunami of new tools focused on transparency, navigation and advocacy for the consumer, the reality is the science of medical practice remains highly imperfect today.  The personal experience and judgment of the physician remains paramount in practice.  The availability of empirical evidence from one million patients as part of the President’s Precision Medicine Initiative may bridge wide knowledge gaps and upend current best practices of physicians and pharmacy benefit managers (PBMs) in a way that puts additional knowledge in the hands of the patient and may result in better patient outcomes.

Today’s State of the Art Remains Largely One Size Fits All.   While tremendous breakthroughs especially in cancer treatment are creating momentum for evidence-based and personalized or precision medicine, the healthcare system is still largely one size fits all.  Nothing drives this point home more than the recent news on step therapy for Hepatitis C drugs.  PBMs made headlines with the Hepatitis C drug they would require patients to try first.  By trading price for volume with manufacturers, PBMs negotiate better discounts and can pass savings along to patients.  We are very strong proponents of this market approach to drug price negotiation and do not believe the U.S. Federal government or states should negotiate for us or otherwise restrict access, as is the case in many other countries.  While we call this one size fits all, it is in the context of one PBM.  A consumer in the U.S. does have the right to switch to a different PBM, or different product from the same PBM which does not require a patient to fail on a preferred drug before trying a different (more expensive) therapy.  The point we make here is simply today’s state of the art is far from where we believe the future lies.

White House Plan More Data Than Genome.  Major media outlets are focusing on the genome aspects of the President’s plan.  However, our read of the details posted on suggest this initiative is more about data than genome, per se.  The plan is “to build the infrastructure we need to accelerate discovery in [precision medicine],” according to Jo Handelsman, Associate Director for Science at the White House Office of Science and Technology Policy.  According to these details, the reference to infrastructure includes a heavy focus on data and analytics. Let’s take a look at where the $215m is expected to go based on the President’s proposed 2016 budget to be released in full this week (our highlighting added):

  • $130 million to NIH for development of a voluntary national research cohort of a million or more volunteers to… set the foundation for a new way of doing research through engaged participants and open, responsible data sharing.
  • $70 million to the National Cancer Institute (NCI), part of NIH, to scale up efforts to identify genomic drivers in cancer and apply that knowledge in the development of more effective approaches to cancer treatment.
  • $10 million to FDA to acquire additional expertise and advance the development of high quality, curated databases to support the regulatory structure needed to advance innovation in precision medicine and protect public health.
  • $5 million to ONC to support the development of interoperability standards and requirements that address privacy and enable secure exchange of data across systems.

Is Healthcare Ready?   Airbnb, Uber and other disruptive technologies didn’t provide much warning or ask permission of the world’s hotels, taxi companies or municipalities.  They put transparency and access in the hands of consumers who, like wildfire, disrupted existing markets and grew new ones.  “Ask forgiveness, not permission” doesn’t always work in a more regulated industry like healthcare.  However, taxis and hotels are also highly regulated industries.  We think it would be a mistake to underestimate patient demand the potential speed of change.  We believe the frustration with high cost and often ineffective treatments, often with painful side effects, especially near end-of-life, has already created high demand for better information and decision support in the hands of physicians, patients and their families.  The challenge for the status quo will be to find a way to facilitate and profit from changes that may be highly inflationary as it relates to the unit cost of some drugs.

It is the availability of “substitute” products for high cholesterol, high blood pressure, diabetes and other common chronic diseases that give PBMs and other payers the upper hand in negotiating discounts.  High marginal profits earned by manufacturers leave plenty of room to discount price in exchange for volume.  In the case of Hepatitis C, while the drugs are not perfect substitutes, we also don’t have a perfect way to know in advance which drugs will best serve an individual patient.

The lack of Precision Medicine allows a PBM to require patients to try one first and switch to the other if it fails.  That choice allows for price negotiation with the manufacturer.  Precision Medicine introduces a double-edge sword for the patient and payer.  While on one hand it will increase the likelihood of getting the “right treatment at the right time” for the patient and avoid unnecessary trial and error; on the other hand it will eliminate the perceived substitutability of some products, potentially making it more difficult to negotiate discounts from manufacturers.  While on the one hand the potential for FDA approval of biosimilars in the U.S. may expand the opportunity set of substitute products, on the other hand Precision Medicine – finding the one best product for you – may come at a cost we are not yet prepared to face.

Let us know what you think.

Charles Boorady
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