Recent FDA Guidance Benefits IVD Companies in Companion Diagnostics

Recent FDA Guidance Benefits IVD Companies in Companion Diagnostics

On July 31, the U.S. Food and Drug Administration (FDA) issued its finalized guidance on companion diagnostics and an oversight framework for lab-developed tests (LDTs), which have so far escaped the regulatory scrutiny visited on in vitro diagnostic (IVD) tests. The greatest impact of the FDA’s recent release will fall in companion diagnostics (also known as pharmacodiagnostics) or tests that inform clinicians of the efficacy or benefit of a pharmaceutical based on the genetics of an individual. In vitro diagnostic companies stand to benefit from the decisions that will standardize companion device co-development with pharmaceuticals and establish rough equivalency in the regulatory requirements for IVD products (“device”-like) and lab-developed tests (LDTs).

Companion diagnostics are typically used in oncology or cancer treatment. Within the recently moribund global molecular diagnostics market, companion diagnostics outpaced every other molecular test segment in terms of market growth. The majority of the companion diagnostics market is held by LDTs developed in reference or commercial laboratories and able to compete in the market without the clinical trials and product registration required for companion diagnostic (or “companion device”) products sold by IVD companies.

The draft framework released July 31 seeks to even the playing field between LDTs and companion diagnostic products. The traditional risk-based approach used for medical devices (including IVD) will be expanded to LDTs and similarly stratified by Classes I (lowest risk) through III (highest risk). Few LDTs will escape FDA oversight, largely only Class I-equivalent tests and LDTs for rare diseases that have no alternative tests available. Class I tests and rare disease tests are traditionally treated under the Centers for Medicare & Medicaid Services’ (CMS) CLIA program. For moderate- and high-risk LDTs (Class II and above), premarket review, registration, listing and adverse event reporting will be required beginning six months to four years after finalized guidance is released.

The oversight framework for LDTs will take years to implement and affect the competitive balance between the IVD industry and laboratories. Labs’ compliance will not be possible until finalized guidance is released, perhaps in another one to two years (the other part of FDA’s July 31 release included finalized guidance for a draft originally released n 2011).

The other part of the FDA’s recent announcement, finalized guidance on companion diagnostics, is viewed as beneficial to both regulators and industry stakeholders by encouraging close, collaborative partnerships between pharmaceutical and diagnostics companies during the approval process. Alexander Gaffney with Regulatory Affairs Professionals Society (RAPS) explained the benefits as follows:

For regulators, the use of the diagnostic tests makes it easier to determine which patients will benefit, and also decreases the chance of a drug being used off-label in untested populations or populations unlikely to benefit. For drugmakers, the use of companion diagnostics theoretically makes it easier to obtain approval by allowing regulators to see who stands to benefit from a drug, and why.

The value of partnerships, or at least, coordination between pharmaceutical and IVD companies during the development and approval of a therapeutic product is evident in the FDA’s guidance, and has also been demonstrated in recent approvals. According to the finalized guidance, with some exceptions, a novel therapeutic product (typically a drug) “for which an IVD companion diagnostic device is essential for the safe and effective use of the product, the IVD companion diagnostic device should be developed and approved or cleared contemporaneously so that it will be available for use when the therapeutic product is approved.” Pharmaceutical companies will be incentivized to share the costs of companion device development with their IVD partners as the regulatory acceptance of the drug, and ultimate success of the companion device on the market, depend upon the successful development of the diagnostic.

The FDA’s recently released guidance more or less codifies the close relationship between pharmaceutical and companion device development already sought and cultivated in various pharmaceutical-IVD agreements. Coupled with a tightened grip on LDTs competing in the U.S. companion diagnostics market, the FDA’s preferential treatment of “contemporaneously” developed pharmaceuticals and companion IVDs is expected to benefit non-LDT pharmacodiagnostic leaders such as Roche (and confirm Roche’s bullish outlook on the U.S. IVD market).