Despite the great promise of personalized medicine and molecular diagnostics, “it’s hard to find a business model that works in real life,” according to Stephen Little, Ph.D., vp for personalized healthcare at Qiagen. “For tests to be useful, they must be validated and information must be actionable. Gaining validation is quite expensive, and markets aren’t that large.” With the current reimbursement model, many companies can’t afford the needed studies.
To overcome that hurdle, Qiagen is working with the pharmaceutical industry. In developing a companion diagnostic for AstraZeneca anticancer agent Iressa™ (an EGFR inhibitor), “we get the EGFR testing market, and AstraZeneca gets the value of the treatment market, so we meet the requirements of market development in a very controlled way,” Dr. Little said.
“Another area of activity we’ve seen, especially last year, is the integration of molecular diagnostics into a larger suite of services to capture value from that, such as Nestle Health Science’s (www.nestlehealthscience.com) acquisition of Prometheus Laboratories last May,” Rosamond added. “That acquisition moved Nestle into gastrointestinal diagnostics and complemented its nutritional solutions business.”
“Economics, whether for investors or payers, determine the markets likely to be pursued. Few look at the long-term cost of disease,” Stewart said. Therefore, companies must balance the cost of the therapeutic against the cost of a diagnostic. “As technology improves, the economic equation changes.”
As Dr. Little added, “It’s never been about the cost of doing the test, but the cost of obtaining information from it.” He suggested that the next big opportunities lie in oncology and “maybe, neurological disease.” The key, he said, is to target diseases in which early detection can make a clinical difference.