Do companion diagnostics make economic sense for drug developers?

Drug developers are grappling with the impact of personalized medicine on their portfolios. The combination of molecular diagnostics with targeted biologic therapies has been hailed as a recent innovation with few historical analogs to guide behavior. However, if the definition of companion diagnostics is broadened to include any drug whose FDA approved label requires diagnostic testing before prescription then over 50 drugs across multiple therapeutic areas arise. Most importantly for current drug developers, these drugs represent a wide variety of market situations and with sufficient historical data to evaluate different commercialization strategies for the combination. Included in these examples are drugs which were not initially launched with companion diagnostics but were required to implement companion diagnostics after they were on the market for a period of time. The historical case studies demonstrate that companion diagnostics are neither a universal panacea nor an unmitigated disaster for drug developers but require an understanding of specific situations to determine the utility of companion diagnostics. Numerous case studies highlight how companion diagnostics have been a boon to drug developers including Iressa, statins, Soriatane, Arthrotec, Promacta, Nplate, Letairis, and Tracleer. Other examples provide lessons on how to avoid pitfalls such as Accutane, Ticlid, Tegretol, Ziagen, Actigall and Clozaril. By carefully evaluating these case studies, drug developers can gain insight on the appropriate companion diagnostic strategy to implement for their specific situation and develop the elements of a successful companion diagnostic strategy.