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 / Winter 2012 / Issue 69(originally published by Booz & Company)


A Strategist’s Guide to Personalized Medicine

The Essentials of PMx Practice

The experience of biopharmaceuticals suggests that seven processes and practices are required for proficiency in personalized medicine. Together, these could become the basis of a distinctive capability for a company in this field.

1. Biomarker discovery and identification. The first step is to identify a biological trait that indicates the presence or progression of a disease. Next, develop a test that can detect the presence or quantity of these biomarkers. That test becomes the diagnostic. Costs need not be excessive because many relevant biomarkers have been discovered and classified by academic and independent research labs and are available in public databases. The art lies in establishing biomarkers’ clinical utility by separating the disease signal from biochemical noise.

2. Assay development. Create in vitro tests that scale beyond the laboratory setting to clinical or commercial use. Develop assays on all major technology platforms and across multiple analyte and sample types, such as tissues, bodily fluids, and DNA/RNA and other proteins. Map the patient’s journey from diagnosis to treatment, and use Dx tests to develop efficient patient–disease stratification.

3. Cross-functional (Rx and Dx) regulatory and clinical expertise. Drugs that are aimed at patient subsets and paired with companion diagnostics make new demands of regulators, so applicants must come prepared. Start by building optimal indications — explanations of the diseases the drug is licensed to treat — and labels, which are the FDA-compliant texts that specify how the drug should be used. Introduce these materials early to key opinion leaders in the relevant field of medicine.

4. Pricing, reimbursement, and billing systems. Develop a sophisticated knowledge of health economics modeling, and cultivate policy experts. Base your projections on the idea that patients who gain no benefit from a drug will not take it; this will cut costs throughout the healthcare system. The right drug to the right patient at the right time is a powerful value proposition.

5. Partnership selection and management. Biopharmaceutical companies are accustomed to outsourcing research, development, and clinical trials. But PMx is different. It involves partnership capabilities that many companies do not possess. A partnership for a companion diagnostic test, for example, has regulatory, quality control, legal, marketing, and sales aspects, involving both the test and the drug. It is critical to define in advance how much value the drug contributes versus how much the enabling diagnostic contributes, and to build a win-win model for the Dx and Rx participants.

6. Marketing. A pull-based strategy requires a knowledge-intensive effort aimed at key opinion leaders and decision makers. You will also need to reach out to national and regional payors.

7. Sales. Retrain your sales force to be conversant in complex science, including genomics, proteomics, and bioinformatics. Revenues from each drug will be spread over fewer patients and total prescriptions, so each staff member will need to manage a larger number of products.

—A.K. and N.P.M.

Reprint No. 00131

Author Profiles:

  • Avi Kulkarni is a partner with Booz & Company based in San Francisco and a member of the firm’s global health practice. His areas of expertise include personalized medicine, life sciences R&D, and the pharmaceutical and diagnostics industries.
  • Nelia Padilla McGreevy is a principal with Booz & Company based in Boston. She specializes in personalized medicine and pharmaceutical regulations.
  • Also contributing to this article was strategy+business contributing editor Lawrence M. Fisher.


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  1. Marcus Ehrhardt, Robert Hutchens, and Susan Higgins, “Five Steps toward a Revitalized Pharmaceutical Supply Chain,” s+b, Spring 2012: Companies embracing personalized medicine will need to build these operational capabilities.
  2. Gil Irwin, Art Kleiner, and Joyjit Saha Choudhury, “When Disruptive Integration Comes to Health Care,” s+b, Mar. 3, 2010: The Innovator’s Prescription coauthor Jason Hwang talks about the next wave of healthcare business models.
  3. Alex Kandybin and Vessela Genova, “Big Pharma’s Uncertain Future,” s+b, Spring 2012: As the era of the blockbuster drug comes to an end, the industry must cope with new unknowns.
  4. For more thought leadership on this topic, see the s+b website at:
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