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Genetic Testing Heads to the Pharmacy

Several recent deals could make tests more common.
February 10, 2010

Even though nearly 2,000 genetic tests are available today, most Americans have never taken one. (Save, perhaps, for newborn screening.) That may soon change, as the nation’s largest businesses responsible for managing prescription benefits, Medco and CVS Caremark, delve into the DNA testing business. Taken together, the two companies cover more than 100 million Americans.

In the industry’s jargon, Medco and CVS Caremark are known as pharmacy-benefit managers, acting as middlemen between insurers or employers and their customers or employees to negotiate cheaper drug prices, and to develop tools to improve the prescription process. These companies largely took over the prescription drug industry 15 years ago, and they may now do the same for genetic testing.

Earlier this month, Medco announced that it had acquired DNA Direct, a genetic testing startup based in San Francisco. The announcement follows a similar deal by CVS Caremark in December, when it increased its ownership share in Generation Health, a New Jersey-based startup created to analyze the effectiveness of genetic tests. “There is consumer demand right now,” says Robert Epstein, Medco’s chief medical officer. “People want to know–I’ve just been diagnosed with cancer, what tests do I need?”

While the majority of existing genetic tests screen for rare, single-gene disorders, a number are available for more common conditions–substantially increased risk for certain cancers, blood clots, or cardiac abnormalities, as well as genetically determined differences in an individual’s response to specific drugs. But use of the tests has not caught on, for a variety of reasons. Physicians don’t understand them, patients aren’t aware of them, and it’s not yet clear how effective they are at both improving a patient’s long-term outcome and decreasing health costs.

Medco is targeting all of those gaps. The company has already made some strides in pharmacogenomics–using genetic testing to personalize prescription drugs. Medco’s pharmacists call physicians and patients to offer the appropriate genetic test for a prescribed drug and then help interpret the results. “Physicians understand the concept of pharmacogenomics, but they don’t really feel comfortable interpreting the results,” says Pat Deverka, a physician and researcher at the Institute for Pharmacogenomics and Individualized Therapy at the University of North Carolina, in Chapel Hill. A recent survey by Medco found that while almost all physicians polled recognized that genetic profiles may influence a reaction to a drug, only 10 percent believed they were adequately informed about pharmacogenetic testing.

That problem is likely to grow. “There are still a relatively small number of drugs where pharmacogenomics actually plays a role, but this could drastically expand over the next five years,” says Scott Weiss, a physician at Harvard Medical School and interim director of the Partner’s Healthcare Center for Personalized Genetic Medicine. “Antidepressants, asthma meds, anti-arrhythmia drugs, lipid-lowering drugs–some of the biggest sellers in terms of drug use nationally could potentially have pharmacogenetic implications.”

Medco is also funding studies to evaluate the cost-effectiveness of specific pharmacogenomics tests, including those for the blood thinner warfarin and the breast cancer drug tamoxifen. The company will announce results of a study conducted in collaboration with the Mayo Clinic at the American College of Cardiology conference next month.

By acquiring DNA Direct, Medco greatly expanded its ability to offer genetic tests and the decision-making tools needed to put them into practice. “We were concentrated on a dozen pharmacogenomic tests,” says Epstein. DNA Direct, on the other hand, “has expertise in 1,000 to 2,000 tests.”

Founded in 2005, DNA Direct began as a direct-to-consumer genetic testing company. The company has gradually expanded its offerings, developing decision-making software to help physicians and patients decide when genetic testing is appropriate and what to do with the results. It has also created a network of genetic counselors to answer questions, as well as partnerships with insurers to determine which tests should be covered for which patients.

Medco plans to launch a new set of tools based on DNA Direct’s existing infrastructure and present them to clients this summer. “Patients are going to see the principles of personalized medicine presented to them rather dramatically,” says Edward Abrahams, executive director of the Personalized Medicine Coalition, a Washington, DC-based advocacy organization comprised of payors, providers, industry, academia and patient advocacy groups.

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