Diagnostic Test Technology
Will Change Medical Treatment
April 2009
STANFORD GRADUATE SCHOOL OF BUSINESS—Of the $2.2 trillion the United State expended on health care in 2008, diagnostic tests accounted for just 2 percent of total dollars spent. Yet, the results of such tests drive 70 percent of treatment decisions.
"Diagnostics is currently the poor stepchild of the health care industry," said Randy Scott, executive chairman of Genomic Health, and one of the keynote speakers at the 2009 Stanford Healthcare Summit sponsored by the Business School’s Health Care Club on April 23. "But we’re reaching an inflexion point—just like we did in the technology industry—that has the potential to disrupt everything."
The focus of the summit was "personalized medicine," or the idea that information about an individual's genotype can be used to tailor medical care to his or her specific needs. "Diagnostic tests are the foundation on which personalized medicine is built," said Mary Hall Gregg, vice president at Quest Diagnostics, the other keynote speaker at the summit. "Tests that analyze diseases at the molecular level are already driving better patient outcomes for HIV, breast, and ovarian cancer," she said.
Take early-stage breast cancer. More than 115,000 women are diagnosed with this every year. A full 85 percent can be successfully treated with a combination of surgery and hormonal therapy, and will experience no reoccurrence of the disease. However, in the remaining 15 percent of women, the cancer should be treated much more aggressively to minimize the risk that it will metastasize.
Until Genomic Health developed its Oncotype DX test, which examines a breast cancer patient’s tumor tissue at a molecular level, physicians had no way of knowing the probability of whether an individual woman would respond to chemotherapy, or the risk of reoccurrence. As a result, most physicians chose to treat the cancer aggressively and recommended chemotherapy for all patients.
"But that means that 85 percent of the women who underwent chemotherapy didn’t benefit from it at all," said Scott. What's more, chemotherapy is only effective for 4 percent of the remaining 15 percent of cancer patients. "We were giving chemotherapy to everyone hoping to benefit just 4 percent of patients," he said. "We were spending huge amounts of money on treatments that were simply not beneficial for most women."
And the toll that unnecessary chemotherapy took on women's lives was even larger than the financial one. Scott told of a commercial pilot who, due to Federal Aviation Administration (FAA) rules, would have been unable to fly if she had embarked upon a course of chemotherapy. "Understandably, she wanted to know the probability that it would actually be beneficial," said Scott. Currently, 50 percent of women diagnosed with early breast cancer in the United States are choosing to undergo Oncotype DX testing.
Scott stressed that before the medical community can hope to successfully fight diseases such as cancer, cystic fibrosis, and diabetes, "we have to understand the problem. But we've been caught up in a drug-centric world where we’re attempting to treat things we don't fully comprehend," said Scott. Genomic Health was founded in 2000 to improve the quality of cancer treatment decisions through researching, developing, and commercializing genomic-based clinical laboratory services.
To illustrate the potential of molecular testing, Gregg told the audience that the human genome contains three billion DNA base pairs, and the information they contain is equivalent to that found in 20,000 books of 200 pages each. "With the kinds of molecular diagnostics being developed today, we'll be able to find a single typo in those four million pages."
Spun off as an independent company from Corning Inc. in 1996, Quest Diagnostics today performs testing for more than half a million patients daily and provides services to roughly half of U.S. physicians and hospitals. Approximately $1.3 billion of its total $7.2 billion in revenue comes from Quest's molecular diagnostic testing services—a line of business that is growing at 10 percent annually compared to other Quest Diagnostics businesses, which are experiencing 5 percent to 6 percent annual growth rates. "We’re seeing very rapid expansion of our business in this area," said Gregg.
Personalized medicine will also benefit pharmaceutical firms that are scrambling to come up with effective new drugs with minimal adverse effects. "Just imagine if a company develops an experimental drug that successfully cures diabetes, but only in 25 percent of patients," said Gregg. "That would never get to market today." However, if there were a molecular diagnostic test that identified the 25 percent of patients for whom the drug would work, "the pharmaceutical company could tailor the trial accordingly, and get a very beneficial drug to market," she said. "This is why drug companies are so excited about personalized medicine."
Both Gregg and Scott are enthusiastic about the power of using information technology to network and analyze the massive amounts of clinical information that already exists. By creating a common pool of clinical knowledge, health care providers, researchers, physicians, and pharmaceutical companies would all benefit. "But we need continuing advancements in technology so tests can be more broadly applied to clinical practices," said Gregg. "We also need physicians to feel more comfortable using these tests, and health care payors to agree to reimbursements."
Scott said that sequencing the genome and simply creating massive amounts of genetic information alone won't drive personalized medicine. "The value of genetic information is marginal by itself," he said. "What we need is the power to network all the information we have from HMOs and geneticists and pharmaceutical companies to come up with clinically actionable information that directly impacts clinical outcomes." This, in turn, will enable a new era of analysis, and "will be hugely disruptive to the entire health care industry," he said. "Not everyone will be happy about this. But over the next 20 to 30 years we’re going to see a huge shift in how we think about treating disease."
—Alice LaPlante