October 2009: Volume 35, Number 10

Recent growth in the field of personalized medicine is changing how diagnostic and pharmaceutical companies interact, according to a new report released by PricewaterhouseCoopers, “Diagnostics 2009: Moving towards personalized medicine.” But the report’s findings indicate that companies are hesitant to work together on companion diagnostics.

Specifically highlighted in the report is the fact that there is no clear trend describing the number of deals made between pharmaceutical and diagnostic companies to develop companion diagnostics. Big Pharma remains a dominant collaborator with the diagnostics industry, with top 20 companies accounting for six out of seven pharmaceutical partners in 2008, yet companion diagnostic partnerships are not an established industry practice.

The development of companion diagnostics is seen as risky and time consuming by most large diagnostic companies, especially when compared to the revenue generated from their traditional target of clinical laboratories. Even niche companies find the development of a companion diagnostic increasingly unattractive, due to intellectual property concerns, pricing and reimbursement coverage, and the amount of testing required before marketing authorizations can be obtained. Diagnostic companies have found it more cost-effective to develop companion diagnostics without a partnership, allowing the value of the diagnostic to be kept within the company.

Not surprisingly, nearly half of all companion diagnostic partnerships in recent years were focused on cancer. In addition to the importance of genetics in cancer progression, and the amount of research currently focused in this area, the high price of cancer therapies is driving the demand for diagnostics that can accurately guide treatment. In 2008, all partnerships announced were focused on cancer diagnostics.

A full copy of the report is available online.