Targeted therapies depend on companion diagnostics (CDx) to identify the right patients. When those diagnostics are not yet approved when a therapy enters the market, covered by payers or accessible in the labs where patients are treated, the therapy’s potential is curtailed before it can be fully realized. Closing that gap requires a different model, one built around the coordinated development and simultaneous launch of diagnostics and therapies, with the pharmaceutical program at its center.
What an Undertested Patient Costs a Pharma Program
A CDx does more than confirm a biomarker. It is the mechanism through which a targeted therapy finds its patients. When CDx adoption lags, the downstream consequences for the pharmaceutical program are direct.
Eligible patients who are not tested cannot be offered the therapy. Clinicians who lack confidence in testing pathways — because reimbursement is uncertain, or because turnaround times push results past the window of a treatment decision — default to standard options. Payers evaluating a new targeted therapy cannot fully assess its clinical utility when the diagnostic required to apply it is not widely available. Launch performance suffers, access is uneven and the gap between what a therapy can do and what it actually delivers persists.
A large claims-based cohort study found that biomarker testing rates remained suboptimal in patients with advanced cancer, despite established guidelines and growing insurance coverage. For pharmaceutical companies, each undertested patient represents a missed treatment decision where a patient who may be eligible for a targeted therapy is never identified as such. At scale, across patient populations and geographies, that gap carries real commercial and clinical weight.
The bottleneck is structural and it is addressable through decisions made during drug development rather than after.
Co-Development as Commercial Strategy
The traditional approach placed CDx downstream of the drug. Therapeutic candidates advanced through clinical trials, regulatory submissions were filed and diagnostic validation followed. This sequencing created compounding risks: regulatory timelines that diverged, clinical utility data siloed across separate development tracks and reimbursement pathways that became much harder to establish when the diagnostic and the drug arrived at payers on different schedules.
Pharma-diagnostics co-development reorders this. When diagnostic and pharmaceutical pipelines move in tandem from early clinical phases, biomarker definitions are established before trial enrollment, patient selection becomes more precise and regulatory submissions can be coordinated. The practical outcome is coordinated approval of the drug and the CDx, supporting a more launch-ready diagnostic ecosystem and reducing the time required to establish testing availability following approval.
For pharmaceutical companies, the evidence case for this model is straightforward. Biomarker-driven trials with a CDx partner engaged from the start produce more efficient enrollment. Regulatory timelines are better protected when a diagnostics partner can adapt to program changes and manage feedback across the Food & Drug Administration (FDA), European Medicines Agency (EMA) and other major markets. And the clinical utility data generated through co-development, tied directly to a specific treatment decision, is exactly what payers need to establish coverage quickly.
An experienced diagnostics partner engaged as a genuine development collaborator, rather than a downstream vendor, is essential to making this work. The problems that arise when regulatory paths become complex cannot be solved by vendors responding after the fact. A co-development relationship built on integration from early clinical phases is what keeps the overall program on track.
For pharmaceutical companies building precision medicine pipelines, co-development is a strategic commitment. It determines whether a targeted therapy arrives at launch with its full commercial infrastructure in place or if it spends its early years in the market closing gaps that should have been designed out earlier.
Approved Together, Covered Together
Simultaneous approval also transforms the reimbursement conversation, which is at its core a conversation about market access.
Payers and health technology assessment bodies evaluate diagnostic tests on clinical utility: whether a test improves patient outcomes. When a CDx is co-approved alongside a therapy, that utility is tied directly to a specific treatment decision. The evidentiary connection is cleaner, the coverage case is stronger and the path to routine reimbursement is shorter.
When diagnostics trail drug approvals, reimbursement and access pathways often remain in development. Testing practices vary across institutions and adoption can be uneven even in well-resourced health systems. During this period, differences in laboratory availability, institutional workflows and coverage policies may delay or limit biomarker testing, reducing the number of patients identified for newly approved targeted therapies.
Pharma teams that treat biomarker-driven trial design, reimbursement submissions and market access planning as coordinated activities rather than sequential ones avoid this problem. Payer evidence built into the clinical program from early stages produces a more durable reimbursement outcome. Market access built on a co-approved CDx is structurally more stable than market access built on a diagnostic that arrives later and has to work backwards through coverage evaluation cycles.
Reaching the Patients Most Precision Therapies Are Designed For
Regulatory approval and reimbursement coverage are necessary conditions for a precision therapy to reach its full patient population. They are not sufficient ones.
The majority of oncology patients in most countries are treated in community hospitals and regional centers, not academic medical institutions. These settings often lack in-house NGS capacity, rely on external reference laboratories and face turnaround times that can push results past the window in which they meaningfully influence a treatment decision. Some sites, in practice, do not test at all.
For pharmaceutical companies, this matters on two fronts. Commercially, patients who are not tested cannot be matched to a targeted therapy. Operationally, community-based sites are a major part of clinical trial networks. This means testing delays affect enrolment timelines, patient identification and the quality of data flowing into regulatory submissions.
Turnaround time has important implications for biomarker-driven drug development. Rapid genomic profiling enables earlier identification of eligible patients for clinical trials, reducing enrollment delays and minimizing the loss of potentially eligible participants while molecular results are pending.
CDx platforms that are automated, reproducible and designed for non-specialist users reduce the local validation burden and support consistent result interpretation across laboratory environments. An In vitro diagnostic (IVD) designation from a regulatory body such as the FDA or EMA gives clinicians and payers a shared evidentiary reference point, supporting the coverage discussions that determine whether testing becomes routine in community settings rather than remaining concentrated in academic centers. These characteristics determine whether a targeted therapy reaches the patients its development program was built around. And they need to be specified as part of the CDx program, not retrofitted after the diagnostic is already in market.
Designing for Global Launch
For pharmaceutical companies with multi-market development programs, the access challenge extends further. Centralized testing models built around high-throughput academic laboratories function well where they are established, but they do not translate uniformly across international markets. Different markets carry different regulatory requirements, distinct reimbursement frameworks and laboratory networks that are not designed to support centralized send-out models at scale.
Distributed CDx platforms, which are designed for adaptation to local regulatory requirements and implementation across regional laboratory networks, align with the way oncology care is actually organized in most parts of the world. Training and implementation support that accounts for on-the-ground infrastructure, rather than assuming academic-center conditions, determines whether a precision therapy achieves consistent global uptake or performs well in a handful of well-resourced markets while falling short of its potential elsewhere.
For pharmaceutical teams building global launch strategies, the diagnostic infrastructure needed to support distributed care settings has to be specified and built as part of the development program. By the time a drug approaches regulatory submission, its global commercial reach has largely been shaped by choices made considerably earlier.
Early Decisions Determine Late Outcomes
Precision oncology will continue to generate new targeted therapies. The scientific productivity of the field is not in question. The challenge is converting that productivity into consistent patient access and doing so at the speed the clinical opportunity demands, in the settings where most patients receive care.
The decisions that determine whether a precision therapy reaches its full patient population are made early in drug development: biomarker strategies aligned to clinically feasible workflows, CDx programs designed with the end-to-end testing pathway in mind and a diagnostics partner engaged as a development collaborator before the challenges that require a collaborator have arrived.
Discovery creates the opportunity. Coordinated delivery, built into the pharmaceutical program, from the start, is what converts it into patient benefit.
Read the full article — it's free
Register with Pharma Focus America to unlock expert insights, research articles and in-depth industry analysis.
