March 31, 2009

Diagnostics PolicyIssues Update

Khatereh CallejaAssociate Vice President

Technology and Regulatory Affairs

Presentation Outline

• Current Environment/Role for Diagnostics

• General Legislative Landscape

• Key Regulatory Issues

• Other Policy Issues (Personalized Medicine, Companion Diagnostics)

Diagnostics Are Well-Positioned in the Current Environment

• Innovation - Diagnostics are evolving to enable more sensitive and specific detection of disease at earlier stages than ever before

• Low Cost – Diagnostics account for less than 2% of all Medicare spending, but influence up to 70% of all health care decisions

• Underutilized - Standard of care diagnostics are underused 51% of the time, according to the Rand Corp.

• Jobs and Economic Recovery (Stimulus)– Aid to States, Comparative Effectiveness

Research, Health IT– Stimulus package is now law but more is expected

• Other Key issues for this year– Energy/Global Warming, Health Reform, Financial

services/financial market reform/housing

• Tasks Related to a New Administration– Approve Cabinet nominations and other key

personnel – President’s budget outline released—awaiting

more detailed info

Legislative Landscape:111th Congress Early Priorities

Diagnostics Legislation—A Look Back

• Longstanding effort to reform payment system for diagnostics– Advanced Laboratory Diagnostics Act (ALDA)

• Introduced in 109th and 110th Congresses• Demo to evaluate a new Medicare payment

system for molecular diagnostics

• Repeal of Lab Competitive Bidding Demo—in July 2008 Medicare bill

• Genomics and Personalized Medicine Act– Obama/Burr-Cosponsors in Senate

• Laboratory Test Improvement Act

• Senate is leading the way‐ June mark-up likely—floor action anticipated

before August recess

• White House is increasingly focused on health care reform

• Key goals in Health Reform‐ Improve quality and efficiency; reduce cost (waste)‐ Diagnostics can play a key role—potential

opportunity‐ Unlock the potential of personalized medicine

Health Reform andPotential Role for Diagnostics

• Improve existing processes for establishing payment rates for new tests (gap-fill, crosswalk)

• Pursue improved, new pathway for establishing payment

• Current discussions taking place with stakeholders

• Administrative (non-legislative) reform also being sought

Health Reform—Potential Concepts for Diagnostic Payment Reform

• Comparative effectiveness research– Diagnostics within the scope: concerns about

evidence expectations– Potential use of diagnostics in research about

other products

• Diagnostics as a “pay-for”?– Achieving universal coverage will be

expensive– Defense: possible cuts to Medicare’s clinical

lab fee schedule?

Health Reform—Other Issues to Watch

Comprehensive Initiatives• Diagnostics Regulatory Reform

−AdvaMed Risk-Based Approach to Regulation of Diagnostics−Class I/II IVD Exemptions

•Molecular Diagnostics/PGx−Companion development guidance(rather than “codevelopment”)−FDA-Industry Companion Diagnostics Drug Roundtable

Issue-Specific •CLIA Waiver Process Improvement for POC Tests

•Pre-IDE Process Improvement

Diagnostic Regulatory Prioritiesat a Glance

AdvaMed’s Risk-Based Approach for Regulation of All Diagnostics

• Modernized approach to diagnostics regulation

• Supports timely patient access to all safe and effective diagnostics

• Based in FDA triage decision model and 1997 FDA Modernization Act requirement for “least burdensome”

• Includes consideration of class I/II IVDs for exemption (MDUFMA qualitatative goal)

AdvaMed’s Risk-Based Approach for Regulation of All Diagnostics

• Re-align intensity of regulatory oversight commensurate with patient risk

• Focus FDA resources on high risk products

• Exempt low risk diagnostic tests from premarket submission—Class I/II IVD Candidates for potential exemption to be submitted to FDA this year

• Apply risk-based approach to all diagnostic tests, regardless of where they are produced

AdvaMed’s Risk-Based Approach for Regulation of All Diagnostics

• Adds objective, transparent, and standardized criteria/process(es) for stratifying pre-market regulatory data requirements

• Considers clinical risk and availability of mitigations

Risk associated w.

-Clinical use of test

-Novelty of analyte

-Novelty of technology

-Training of operator

Reduction/Mitigation associated w.

-Scientific evidence

-General and special controls

-Laboratory process controls

-User experience

Balancing Act—Potential Considerations

Applying the Risk-Based Approach

• Use tier triage decision model

• Consider novelty of analyte, novelty of technology, clinical use of test, and training/ experience of operator

• Consider risk mitigation factors

• Assignment of a tier

Other Key MDUFMA-RelatedActivities

• Pre-IDE Process Improvement

Development of Industry Best Practicesproposal for incorporation into guidance:

– Meeting documentation/record– Time frame for action– Consistency in use of guidance documents– Information/context necessary for specific

questions– Communication of rationale for change– Process for resolving

comments/disagreements

Other Key MDUFMA-RelatedActivities

• CLIA Waiver Process Improvement for POC Tests– Clarification via guidance on various issues

• mimic intended use population, waiver operators/not trained tech, recommend to run 510(k) and CLIA studies separately, etc.

– Ongoing discussion re. qualitative cut off studies and other areas in CLIA waiver guidance

– Differences in regulatory authority/interpretation of CLIA regulations

Molecular Diagnostics and Companion Drug-Diagnostics

• FDA working to publish revised drug-diagnostic co-development guidance—to clarify regulatory requirement

• FDA focus on key role of companion diagnostic development (rather than codevelopment)

• Recognition that one size of evidence will not fit all

Personalized Medicine Clearly A Priority

• CDRH Matrix-Diagnostics and Personalized Medicine Network

• FDA OIVD—Expanding Staff to support Personalized Medicine

• New Senior Genomics Advisor in Office of Chief Scientist

Challenges, but Many Opportunities

• Regulatory and reimbursement should encourage innovation

• Current environment--Overall focus on promotion of personalized medicine and health care reform

• Clear opportunities for diagnostics