Should a Molecular Test Be Treated As A Drug?

Promethus Lab's ability to patent a molecular test is at issue at the supreme court.   Mayo Clinic produced a it's own version of Nestle's Prometheus's test for auto immune diseases and wished to offer it outside its lab.  A district court sided with Mayo and invalidated the patents. Prometheus appealed to the U.S. Court of Appeals for the Federal Circuit, and that court ruled that what Prometheus patented was a "transformation" and thus could be patented.The Supreme Court will hear this case.

Fellow personalized testing company Myriad Genetic's amicus brief provides some insight into the possible industry impact of this case.  Key to the industry argument, diagnostics should be treated as drugs are.  Molecular tests are expensive to make, they involve a lot of trial and error and risk of failure, thus they should have patent protection so that the people who made the discovery of a connection can be compensated.

 Much like in the pharmaceutical industry,
personalized medicine research and development are
extremely costly and offer a very low rate of success.
The amount of time and effort required is
enormous. Additional clinical trials are required to
demonstrate the clinical utility of the discovered
correlation. Many trials are essentially equivalent to
pharmaceutical trials in both design and scope,
sometimes involving following patients for years to
determine long-term survival. Costs for research
tools such as reagents and laboratory equipment
(especially high-throughput platform equipment such
as microarray chips) can also be substantial,
especially since many of these reagents and platforms
are themselves patented products. For example,
researchers at Genomic Health reportedly spent well
over 100 million dollars and 7 years, including
numerous clinical studies involving hundreds of
patients, in bringing OncoType DX® to market.3

 In other words, if the court allows Mayo to win, they may be providing competition on this specific test, but who will be the company that will discover the next marker-drug connection?   Further the Myriad Genetics amicus disputes the contention that Prometheus is attempting to patent a natural law.


For example, while this Court has repeatedly
explained that “Einstein could not patent his
celebrated law that E = mc2; nor could Newton have
patented the law of gravity,”  the Court has explicitly upheld
a patent claiming a 
specific and practical application of the law of gravity.
Eibel Process Co. v. Minn. & Ont. Paper Co.,

The Federal Circut Court in 2010 rejected the claim that the process
Prometheus was seeking to patent was so abstract as to be non-patentable.
“[T]he claims
recite specific treatment steps, not just the
correlations themselves. And the steps involve a
particular application of the natural correlations: the
treatment of a specific disease by administering
specific drugs and measuring specific metabolite

This will be a court case to watch as it would have implications for pricing and development of molecular tests. 

anti - TNF Drugs Leading Battle Against Arthritis

Tumor necrosis factor, or TNF, related to cell death that leads to inflammation, is a main cause of arthritis pain.   According to the report, products such as Remicade, Enbrel or Humira that can block TNF have been effective in treatment and are leading in terms of revenue for the treatment of rheumatoid arthritis.  Abbott’s Humira leads the group of TNF products.  But as the report’s author suggests, the success of these products with rheumatologists and patients also means that it has become a competitive marketplace.

“Humira will likely become the world’s  biggest-selling drug  by 2016, after the fall of Lipitor in 2011,” said Melissa Elder, who authored our recent report on this topic.    “However, new products on the horizon and other factors may challenge this dominance over the next five years.”

Entrants to this area include Bristol-Myers Squibb, with its newest introduction of Orencia, UCB with Cimzia and many others. So far the existing products have fended off those challenges.  Some of the key other factors that may challenge anti-TNF dominance include new small molecule therapies attempting to vie for  first-line utilization; launch of biosimilars; and physicians gaining comfort with IL-6 therapies. One or all of these could potentially derail the anti-TNF dominance. The strongest near-term competitor is Pfizer’s tofacitinib, a JAK1-3 inhibitor. Tofacitinib is a small molecule therapy and can be manufactured  more cheaply than biologic therapies.  However, there are some safety concerns with the product.  On-going Phase III clinical trials will help to sort out the concerns and provide potential indications.

The report notes that the prescription arthritis market is not without its challenges for all drug makers.   Reimbursement for high-price biologic medicines will be challenging over the next few years as payors seek to manage cost through purchasing arrangements and cost-sharing with their insured population, which could be a limiter to price growth, according to the report.

Kalorama Information’s report, The World Market for Prescription Arthritis Treatments, has more information on this pharmaceutical market category including segment market estimates, trends in the industry and detailed company profiles.  The report can be found at Kalorama Information’s website at: http://www.kaloramainformation.com/Prescription-Arthritis-Treatments-6665486/ 

Getting Information into an EMR: Solutions Vary

The installation of an EMR system creates an obstacle for healthcare entities: How to transform all the paper forms and physician-patient conversation into electronic health records.  There are certainly laptop-weilding tech-savvy physicians out there, and iPads are popular with the profession.  But for most, it's not practical to have a computer, no matter how small, play a role in the patient office visit.  Physicians converting to EMR are figuring out ways to get information that was collected in paper form into digital records so that it can be utilized and begin to meet meaningful use requirements.

-For some, dedicating a staff member, an office worker or medical assistant into the role has been the best way to ensure that electronic records are quality-assured and that they met the standards of the organization.

-Many physicians, group practices or hospitals have taken to hiring scribes in order to convert paper records and forms completed by the patient into digital records.   There are numerous companies offering this service.  A fee of $20 an hour is not unusual for these services. 


-For others, digital pens are a solution.  The heatlhcare worker or the patient will enter information into the digital pen as they fill out necessary forms.  One such pen product by Shareable Ink actually learns the users handwriting over time.

Patients Avoiding Medical Care Due To Costs

One of the stats we are tracking constantly as we publish Kalorama Information forecasts is doctor visits. Trends in doctor visits is an indicator of how the healthcare system is functioning, but especially diagnostics where an increase or decrease in doctor visits will be associated with test volumes.  Doctor visits have been in a downward trend since the beginning of the recession, reaching a point where some suggest that when patients do visit, they are sicker.  According to Amednews,  US patients are increasingly reducing doctor visits due to cost, and this could be leading to sicker patients. 

In the latest Commonwealth Fund study, when broken down by insurance status, 76% of the uninsured had problems with access because of cost.  Patients in industrialized countries have health care bills, but U.S. patients with complex medical needs were more likely to have trouble paying them. "Sicker adults" were defined as those who rated their health as fair or poor; received care for a serious chronic illness, injury or disability within the past year; underwent surgery within the past two years; or had been hospitalized within the past two years.

 Other sources suggest that the decline may be permanent.

"I don't think we'll see the same utilization patterns again," said Michael Thompson, a New York-based principal for PwC's Global Human Resources Division, which surveys clients on health issues. "Health care is not free anymore. That has an impact on how people are engaging the system."

We've looked at these issues in our report on 'Out of Pocket Healthcare.' 

New Tests Need for Tropical Diseases as they reach US and Europe

Point of care test makers should produce tests now for diseases affecting the developing world, before they reach developed nations.  The finding was published in Kalorama Information's recent report, Point of Care Diagnostics for Emerging Infectious Disease Threats (Dengue Fever, HIV, HPV, STDs, Chagas, TB, and Other IDs): Market Analysis and Technical Considerations.

According to World Health Organization statistics, globalization has made the world a smaller place in a very short time, with numerous reports of the spread of imported diseases such a lyme, Chagas and malaria to regions where they were not usually present. Chagas Disease, Dengue, Malaria and TB are among the diseases the World Health Organization lists as ‘emerging’ for North America.  The same diseases are emerging in Western Europe (though chagas cases are extremely rare in that region.)  Global travel and trade, along with climate change, are expanding the habitats of the mosquitoes that carry many of the vector-borne Our lead diagnostic analyst, Shara Rosen says:

“Sitting comfortably in the easy chairs of N. America and Europe, there is a false complacency that most of the diseases featured in this report are a problem of developing countries.  The situation in developed countries is probably less urgent for the tropical diseases.  But it is equally important to have better rapid tests for HIV, tuberculosis and sexually transmissible diseases worldwide."

The report predicts strong demand for rapid and efficient tests for countries in the developing world, financed from large foundations, but also suggests that healthcare providers in developed countries can also benefit.    
The full report details the companies that are making tests now and breaks down the testing market in terms of diseases.

The report can be found at http://www.kaloramainformation.com/Point-Care-Diagnostics-6429399/

Done Right, Retail Clinics Can Work for Wal Mart...Or Other Outlets

In-store medical clinics represent a viable business for retailers who locate and manage them correctly.   Kalorama has completed 3 studies on the nascent industry over the past five years and estimates retail store sales at $733.4 million.  We’ve always felt our forecasts could be dramatically changed if a major retailer jumped in.  

Recent news suggests that may happen.  WalMart sent out a request for information document to strategic partners that was obtained by media sources indicated that WalMart planned to offer primary care services to its customers and sought a partner to help do that.  Further statements indicate the retailer intends to take advantage of healthcare reform and the possibility of millions of newly insured.  According to Kalorama, the retailer could benefit from tying new clinics into the store rather than keeping it as an independent entity outside the main traffic zone.  Some of the old Wal Mart locations were near the entrance to the stores.

This is clear.  The clinics can’t be seen the same as a travel agency, optometrist or Subway sandwich shop.  Our research has found that retail clinics worked best when connected to pharmacies, when supported by the management of the store and when their success or failure was measured on indirect as well as direct revenue.   We note  the success of retail clinics in pharmacies versus other locations.  The two strongest retail clinic chains mirror the two strongest drug store chains, CVS and Walgreens. CVS’s Minute Clinic grew from 541 stores in 2009 to over 560 in 2011. With fewer stores but faster growth, Walgreens has embraced the concept; its Take Care Health has gone from 250 to approximately 330 in two years’ time.  

Kalorama’s study indicated that mass outlets like WalMart or Costco could gain at least $800 per day from indirect revenues – extra purchases made by customers who came to the store to receive primary care services.  This is most likely what's on the retailer's mind as they consider more clinics.

To Sell Medical Beds, Companies Looking Outside the US and Europe

Makers of the beds used in hospitals, nursing homes and patient’s homes  will see their best growth from markets outside the U.S. and Europe, according to our latest healthcare market research report.  According to the healthcare market research publisher, the 5.3 billion dollar market for medical beds will see small growth over the next five years in traditionally strong markets but growth can be expected in other countries.

Medical bed makers selling to Europe have already encountered lower sales due to cost restraints, and changes to the US healthcare system are likely to have the same effect.   At the same time, we expect sales of medical beds in the rest of world to more than double by 2016.

 
This change the way bed manufacturers look at their marketing efforts and where they locate distributors and sales personnel..  As a percentage of the total market, the report forecasts that sales outside the US and Europe will grow from 13% to 18% of all medical bed sales between now and 2016.  Africa, Middle East are among the regions that Kalorama sees companies targeting more in the future.   India presently has one-fifth of the world average number of hospital beds per million population and an estimated 455,000 additional beds will be required by 2012, an investment estimated at over $30 billion.  


We note that the "rest of world" market, as it is labeled in our report, still represents the smaller portion of total sales and bed manufacturers will still need to adapt to competitive bidding and other changes in the major markets.   Innovation and production cost reduction are likely at most firms.