Does the Marketplace Undervalue Cancer Biomarkers?

Given the known disparities in research and development and reimbursement dollars spent on diagnostics compared to therapeutics, the diagnostics industry can feel like an unloved stepchild, compared to the pharmaceutical industry. But what contributes to this undervaluation and how significant it is in the marketplace are the subjects of ongoing expert discussion. Cancer biomarker tests are indeed undervalued, asserts Daniel Hayes, M.D., from the University of Michigan, Ann Arbor, and colleagues in a recent commentary piece published in Science Translational Medicine that critically looks at how to break the vicious cycle of undervaluation that perpetuates future undervaluation. “Unfortunately, stakeholders have not fully recognized the potential value of tumor-biomarker tests; thus, the research, regulatory, clinical-use, and reimbursement standards are not as well defined or as rigorous as those applied to therapeutics,” argues Hayes. “These conditions have generated little enthusiasm (or funding) for development of the high levels of evidence needed to support the clinical utility of tumor-biomarker tests, resulting in a vicious cycle of undervaluation of tumor-biomarker tests in both the professional and patient communities.” The vicious cycle perpetuates itself with too few tumor-biomarker tests establishing clinical utility or guideline recognition, thus leading to a lack of adoption and reimbursement that feeds, again, a lack of future funding to establish clinical utility or guideline recognition in other emerging diagnostic tests. A Success Story? Interestingly, an examination of Myriad Genetics (Salt Lake City), what has been perceived as a diagnostic success story, partially illustrates this view. On the one hand, BRACAnalysis has been embraced by national organizations for women meeting specific criteria. Critics, though, are quick to call the $3,000-plus cost “outrageous” and have blamed Myriad’s previous monopoly on BRCA testing for its price tag. Yet, revenues for BRACAnalysis continue to rise, gaining 42 percent in part because of the Angelina Jolie effect, to a first quarter total of $149 million. But now that the Supreme Court has struck down the legality of gene patents, naysayers have been predicting the worst for Myriad, which so far has been unfounded. “While we acknowledge the stock is a ‘show me’ story and could be subject to further negative headlines (including the launch of a test by LabCorp and publication of variant data by competing labs), we continue to believe market share loss will be at a slower pace and not the magnitude implied in the shares,” writes Amanda Murphy, an analyst at William Blair & Co., in an October research note. “Moreover, Myriad has developed a competency in sequencing-based diagnostics and has a meaningful commercial infrastructure that should enable the company to remain a player in the space.” Analysts acknowledge though that Myriad does face an increasingly competitive market environment and the potential for price competition. Downward pricing pressures have been felt with announcements of new entrants to the BRCA testing market, including the reported $2,500 price tag for Quest’s version of a comprehensive BRCA test and the $2,280 price for Ambry Genetics’ test. Is this pricing pressure the result of an end of a monopoly, increasing price consciousness throughout the health care system, an undervaluing of biomarkers, or possibly some combination? Despite Myriad’s continued increases, albeit possibly slowing, in revenue and promising validation study results for the company’s myPlan Lung Cancer test, Murphy says that the market does not fully appreciate the company. “Our view is that Myriad’s pipeline, competency in sequencing-based diagnostics, commercial infrastructure, and private database are being undervalued by the market,” she says. Takeaway: Stakeholders will have to come together to create some systemwide reforms in order to break the cycle of undervaluation of cancer biomarkers. Side Box: Will Added Comprehensiveness Increase Perceived Test Value? The U.S. Supreme Court’s decision that genes can’t be patented has fostered a flurry of new breast cancer test development, including one that can examine all known breast cancer genes in a single assay. While it is too early to tell if the addition of more markers will increase the perceived value of the test, emerging evidence is demonstrating the success of such comprehensive panels at identifying variants. Results from the BROCA test, developed by Tomas Walsh, Ph.D., and colleagues at the University of Washington, Seattle, were presented at the American Society of Human Genetics annual meeting (Boston; Oct. 22-26). The researchers utilized BROCA, a targeted capture sequencing approach, to detect all single base substitutions, insertions, and deletions, and copy number variants in all 26 genes known to be tied to breast cancer in breast cancer patients with a known “severe” familial history (at least three cases of breast and/or ovarian cancer), but who had normal BRCA clinical test results (BRACAnalysis; Myriad). In 206 out of the 800 families (26 percent), mutations were resolved using BROCA, with the families found to be harboring 166 different damaging germline mutations in 21 different genes. Commercially undetected mutations in BRCA1 or BRCA2 were detected in 39 percent of the resolved families (80 of 206). An additional 27 percent of resolved families (77 of 206) carried other well-characterized mutations in other breast cancer genes (CHEK2, PALB2, and TP53), while 20 percent (41 of 206) had breast cancer gene mutations that have been published but have been less fully characterized (ATM, BARD1, BRIP1, CDH1, ABRAXAS, NBN, RAD51C, RAD51D, STK11, and XRCC2).