Personalized Medicine Regulation Needs More Than Band-Aids

[Editor’s Note: This post originally appeared as a guest column at Xconomy.]

Last week, New York State assemblyman J. Gary Pretlow introduced the descriptively named “act to amend the insurance law, in relation to requiring coverage for genetic testing in accident and health insurance polices.”

While not accompanied by a press release, or widely covered by media outlets, the bill merits close attention. While the substance of the bill is striking, its greater import lies in what it reveals about the United States’ current framework for personalized medicine regulation and in what the bill portends for the future of personalized medicine innovation and investment in this country.

The Basics and Breadth of the Pretlow Proposal. Despite its broadly worded title, New York bill #A02325 has a specific goal: to require insurance companies to “provide coverage for genetic testing” for any individual who, “in the opinion of an attending physician, [is at] significant risk of contracting cancer.”

Though not discussed in the text of the bill of itself, the bill’s accompanying memorandum clarifies an intent to specifically require insurance companies to reimburse the cost of genetic tests for individuals deemed to be at significant risk of developing breast cancer (more on this below). With the new legislation, at risk patients “will be able to seek genetic screening and counseling that will be paid for by insurance.”

Whether the bill would require coverage for genetic tests aimed at any type of cancer (as the bill’s text implies), or only for breast cancer (as the explanatory memorandum indicates), its scope is significant. In addition to requiring insurance companies to provide coverage for these genetic tests, it would also require insurers to cover “any subsequent treatment resulting from the results of such test” (emphasis added).

Remember: It’s Only a Bill. Before we go any further, it is important to clarify that this is an introductory legislative proposal. Assemblyman Pretlow has attempted, unsuccessfully, to introduce similar insurance mandates in the past and his current attempt has only been read once and referred to the assembly’s Committee on Insurance. It is not the law of the State of New York. It is not even up for a vote.

Whatever the factors that prompted the bill’s introduction, it would seem to stand little chance of passing in its current form. A primary substantive objection is the exceedingly vague scope of the bill as presently drafted. Assemblyman Pretlow’s proposal does not specify the nature of the genetic tests for which insurance coverage would be required. For example, would it cover multiplex or whole-genome sequencing to identify all identified genetic markers of cancer susceptibility, or only more narrowly tailored susceptibility tests (e.g., Myriad Genetics’ BRACAnalysis)? Similarly, the bill fails to circumscribe the extent of “subsequent treatments” which must be covered by insurers. Would coverage extend to genetic counseling and/or other preventative measures, such as an elective mastectomy in the case of breast cancer, or would it be broad enough to encompass subsequent (and far more costly) therapeutic treatments in the event a cancer materializes?

These and other questions demand significant clarification. Meanwhile, preliminary reaction from the insurance industry has been strongly negative, suggesting that the likelihood of Assemblyman Pretlow’s proposal passing is slim, at least in its current form. But because of what it reveals about the state of personalized medicine regulation in this country, and what that implies about the future of personalized medicine globally, it is a bill that is noteworthy by virtue of its mere proposal.

A Local Solution; A National Problem. In 2008, the now-defunct Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS) published a comprehensive review of the “U.S. System of Oversight of Genetic Testing” (pdf). The 276-page report, which remains the most comprehensive analysis of its kind to-date, identified “significant gaps in the U.S. system of oversight of genetic testing that can lead to harms,” including incomplete, inconsistent and overlapping regulations at the state and federal level.

Nearly three years later, little has changed. As we wrote earlier this month, even as the number of genetic tests and other personalized medicine technologies and treatments proliferates, and despite significant talk about overhauling numerous aspects of this regulatory framework – from the NIH’s proposed Genetic Testing Registry to the FDA’s proposed oversight of Laboratory Developed Tests, among numerous other proposals yet to be implemented – the regulation of genetic tests, and of personalized medicine more broadly, continues to remain a messy, patchwork affair.

While regulators and regulated companies struggle to make sense of the current landscape, genetic testing has garnered increasingly high-profile media and political attention in several areas, including the viability of direct-to-consumer (DTC) genetic testing and the patentability of the DNA sequences and methods underlying certain genetic tests. As these issues remain unresolved – the Myriad litigation, for example, is now nearly two years old, and a resolution unlikely to arrive soon – the pressure on lawmakers to act continues to grow.

For example, one the key allegations raised by the Myriad plaintiffs in their initial complaint (pdf) was that Myriad Genetics’ patents on two key breast cancer genes (BRCA1 and BRCA2) mean that “many women at risk [of breast cancer] cannot even be tested because they are uninsured and/or cannot afford the test offered by Myriad.” It is hardly a stretch to view Assemblyman Pretlow’s proposal as a direct, legislative response to perhaps the most politically salient issue posed by the Myriad litigation.

A National Problem; A Global Shift? Taken purely from the perspective of women at risk of hereditary breast cancer who happen to live in New York state, Assemblyman Pretlow’s proposal to require insurance coverage of applicable genetic tests is a positive development. But viewed through a broader lens, the Pretlow proposal is symptomatic of a troubling and ongoing trend: the use of legislative band-aids (e.g., insurance coverage mandates) in an attempt to mitigate the effects of deeper and more serious problems in our personalized medicine regulatory framework.

While significant for a subset of individuals, a bill which would create separate insurance coverage criteria for a subset of genetic tests and follow-on services in a single state would further complicate the existing personalized medicine landscape for national insurers, healthcare providers, genetic test developers and patient advocacy groups. Far from addressing the problems identified by SACGHS three years ago, it would make them worse.

Continued legal and regulatory development in this direction could be tragic for personalized medicine – both the industry and the patients it seeks to serve – in the United States over the long run.

Last week, the global consulting firm PwC published its Medical Technology Innovation Scorecard. The full report (pdf) evaluates the capacity and capability of nine key countries, including the U.S., for medical technology innovation. One of PwC’s key findings was that “the medical technology innovation ecosystem, long centered in the United States, is moving offshore.”

According to PwC there are a number of reasons why this is happening, including the increasingly labyrinthine United States regulatory system:

The citizens of countries with more efficient and less uncertain, capricious and complex regulatory approval processes will gain earlier access to innovative medical technology, and providers in those countries will benefit from more experience in using new devices…Countries with long, complex, arbitrary, nontransparent, costly approval pathways will discourage entrepreneurs and investors, causing them to launch new products elsewhere.

The PwC report made a splash when it was released last week, in part because it attempted to quantify what SACGHS and so many other advisory groups, executives and investors both before and since have noticed: bringing medical and healthcare innovation to market in the United States is an increasingly time-consuming, expensive and frustrating process.

As Luke Timmerman of Xconomy notes, although the United States may not be moving in the right direction, its fall from the top of the heap is hardly inevitable. Timmerman suggests that a few strategic “policy moves could be enough to keep the U.S. in the lead of med-tech innovation for a long time.” That’s probably correct, but it’s important that those moves are timely made.

It is becoming increasingly clear that the regulatory, reimbursement and intellectual property structures that both support and constrain personalized medicine innovation and commercialization in this country are all in need of a strategic and comprehensive overhaul.

The PwC report is a reminder that this overhaul must come relatively soon if it is to head off a significant and long-term shift in the geographic center of gravity for personalized medicine innovation and investment. And the Pretlow proposal, no matter how well-meaning, is a reminder of the “uncertain, capricious and complex” legal and regulatory framework that will continue to frustrate personalized medicine innovation in the meantime.