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Diagnostics Are a Driver, Not a Cost: Head of Merck Serono Pharma Links Erbitux Peak Sales With KRAS Diffusion Investment



Peter Keeling

Peter Keeling of Diaceutics highlights the financial return on investment possible when pharma invests in companion diagnostic testing, with a focus on Merck Serono’s Erbitux.

Belén Garijo, head of the Merck Serono’s pharma unit [2013], hits the nail on the head when she highlights the interdependency between a targeted therapy opportunity (in this case Erbitux) and the investment required in creating an efficient testing market (in this case KRAS and EGFR testing).

She says, “Depending on the country, testing can cause treatment delays ranging from a few days to a week and a half, making it a priority for Merck to provide support for faster testing and lab procedures.”  See the full article, Merck KGaA eyes KRAS-gene focus to boost Erbitux sales, here.

To put this in some financial context, our own financial research has indicated a range of between $60 to $80 in additional therapy sales from every $1 spent on improving the companion testing environment. If that was the return from an advertising or education campaign there would be no question about the investment. However, we continue to see therapy commercial teams perceive investment in improving the efficiency of a diagnostic market only as a cost rather than a driver. Consequently, for every 100 units of resource 98 are most often put into the therapy education and marketing and two into the companion testing market. We at Diaceutics believe this ratio should be more like 80:20.

Despite the many, many citations of a positive financial influence diagnostics can have on therapy markets and the goals of getting the right patient to the right therapy, the predominant dollar focus on the therapy in the personalized medicine market is culturally embedded. It is perhaps no coincidence that Belén Garijo worked at Abbott in the past and presumably understands the technology convergence taking place in front of our eyes.

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