There has been a lot of activity of late in the area of Stratified Medicine (SM)[1]. Almost every major Pharma and Biotech company has initiatives in this area.  Recently, there have been high profile launches of innovative therapies such as Pfizer’s lung cancer drug called Xalkori and Roche’s Zelboraf for melanoma. In addition, there are approximately forty SM products in late stage registration trials that will enter the market in the near term. However, behind all this activity, there have been subtle changes in how some Pharma/Biotech companies are viewing SM and adapting to the changes resulting from it. The mindset within industry circles is quickly switching from “SM will shrink my market and is a threat to my business” to “SM is a strategic asset for us to gain competitive advantage.” The industry is moving from ad-hoc and decentralized approaches of SM to coordinated, centralized and process-driven approaches in planning and operational activities in SM across various geographies.

From the late 1990s to 2010, the industry was largely in the “exploratory” phase of SM during which innovative therapies such as Herceptin and Gleevec were launched. Decision-making was conducted in an ad-hoc manner without much strategic or operational planning and there was lack of visibility and guidelines on how to approach SM. Furthermore, SM opportunities (threats) appeared so infrequently that Pharma/Biotech companies could afford to be somewhat unfocused in how they managed these efforts. Moreover, lack of strategy and vision from senior leadership resulted in decision-making in the hands of R&D and Therapeutic areas with little coordination and communication between different groups. This led to subsequent challenges during clinical trials and go-to-market launch activities resulting in missed opportunities, launch delays and under performance. In addition, the key question of “control over distribution channels, customer access and messaging” was never addressed, i.e., how much control and influence should the therapy provider have on new SM channels?

This decade we are entering into an “operationalization” or “standardization” phase of SM which is being led by a handful of Pharma/Biotech companies. During this phase, we are seeing case studies, regulatory guidelines and teams with experience, plus upfront planning and strategic vision at Corporate, R&D, Translational Medicine, business unit as well as product levels. Additionally, some innovative companies have addressed the critical question of control of channels and messaging to a point where they have decided to acquire SM companies. Furthermore, SM opportunities (threats) are becoming far more frequent, which drives opportunity and the need for the corporate center to ensure that the organization is developing scalable shared resources and learning from cumulative experience. Lastly, while most of the industry still is seeing SM through the lens of diagnostics, we believe that over time, the industry will take a “technology agnostic” view of SM and apply other patient stratification tools and approaches such as patient monitoring, medical/surgical devices, data management solutions and clinical decision support systems.

Bottom line:  Stratified Medicine is increasingly being viewed strategically in the Pharma/Biotech organizations.

All these changes are opening up new challenges for the industry. The discussion is moving beyond biomarker development during R&D to formulating a corporate vision/strategic direction and operationalizing SM throughout the organization. While most decisions on SM are still being made within R&D and therapy areas, we are seeing the corporate function increasingly providing guidelines and frameworks to facilitate operating decisions in order to successfully implement SM approaches. This means that the C-Suite as well as senior executives are now driving the approach to SM and therefore are being confronted with the following questions:

1. How do I develop a vision and strategic direction for my organization in relation to SM? How do I communicate this vision and strategy both internally and externally plus develop consensus? Is my corporate culture an asset or an impediment in implementing this vision and strategy throughout my organization? How does SM improve or weaken my competitive position?
2. Is my current therapeutic portfolio aligned with the demands of SM? Do I have enough SM therapeutics in my portfolio? If not, do I need to add new therapies to my portfolio? What are my competitors doing?
3. Are my R&D and Drug Discovery groups fully utilizing SM approaches? Are they getting adequate guidelines on when and how to use SM approaches? Is “partnership with diagnostics companies” the right approach? Are there other approaches that give us more control so that we are not dependent on emerging companies for the development of mission-critical SM tools?
4. How are my go-to-market channels and sales force impacted by SM? How do sales force training and messaging change? How much control and influence do I need to exert on the channels with patient identification tools such as companion diagnostics? What new stakeholders do I need to touch (e.g. pathology/radiology groups, HealthIT groups)? What new products and services do I need in the SM channel beyond companion diagnostics (medical devices, remote monitoring systems, clinical decision support systems) for patient stratification and monitoring? Do I need to own and control a Global Stratified Medicine Channel?
5. How does my reimbursement strategy change with SM? How do I influence pricing of SM and patient identification tools so that the sales of my therapies are maximized?
6. How is my clinical trial process impacted with SM approaches? How do we manage the need for multiple phase II correlative trials? What new partners do I need (e.g. Diagnostics Laboratories) to successfully conduct clinical trials with SM approaches?  How do I manage patient samples across geographies?
7. What infrastructure do I need for effective patient sample management and bio-banking for me to be able to perform clinical studies across geographies?
8. Is my existing manufacturing infrastructure and QC process adequate? Do I need new manufacturing capabilities?
9. Should there be a dedicated group within my organization for SM? How should this group be organized and report to other groups? Are the drug and the companion diagnostic a single solution, or separate products? Can this be a stand-alone business and profit center? What is its business model? What incentives need to be put in place to make SM successful for my company?

We believe that answers to these questions are complex and need to take into account unique attributes of each company. While the industry is on its way to adopting SM approaches, we believe that the above questions have not been adequately answered by the majority of players. For some Pharma/Biotech, SM represents a fundamental shift in business model while to others SM may not have much of an impact at least in the short term. In either case, there is a need across the industry to take a hard look at their business, their portfolio, and their internal organization and its readiness to adapt to the realities of the market and answer these important questions. This deeper look can range from setting corporate vision and strategy all the way down to implementation and operational changes needed to adapt to the changes.  The stakes are high in this new game as the structure of the industry as well as the next generation of leaders will be determined by the moves organizations make today to prepare for the new realities and challenges of SM.

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[1] Stratified Medicine is the management and treatment of a group of patients with shared biological characteristics by using a set of tools (e.g., companion diagnostics) to select the best therapy in order to achieve the best possible medicinal outcome for that group.  Other similar terms used interchangeably: Personalized Medicine and Precision Medicine.

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Tags: Personalized medicine, Stratified medicine

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