What Does It Take to Build a Business Around a Single Patient?
Emerging “N-of-1” Models and the Regulatory Road Ahead

What is “n-of-1”?

The term covers two different ideas. A classic “n-of-1 trial” is a research design in which one patient cycles through a drug and a placebo to generate generalizable data for the broader patient population. The newer use of the term, and the one driving commercial interest, refers to a therapy designed for one person, or a handful of people, either with an ultra-rare disease or with diseases for which each patient’s particular case may be different and require distinct treatment in order to be successful (such as cancer). Its purpose is ultimately to treat that patient, even though the treatment is investigational.

A well-known example is milasen, an antisense oligonucleotide (ASO) developed for a child with CLN7 Batten disease. Other modalities are also being explored, including gene therapy, cell therapy, personalized cancer vaccines, and genome editing.

The business models around this science vary. Nonprofits and consortia have generally led the way until now, working on a charitable or pre-competitive basis. Increasingly, for-profit entrants are seeking to build platforms for efficient, repeatable generation of individualized investigational treatments. Diagnostics-driven companies are also seeking to leverage genetic testing and computation to individualize treatment decisions at scale. The common thread for these emerging businesses is that they seek to meet the unique needs of individual patients, not the population, through models that look more like services than traditional drug and diagnostic product distribution.

Why this is becoming more common

Healthcare has long been organized around the macro. Drugs and diagnostics have traditionally been developed for large populations, with standards of care and protocols built for diseases rather than individuals. That approach works well on average, but sometimes small differences between patients can decide whether a treatment succeeds. In serious conditions like cancer, that difference can be life or death.

Technological developments are now making individualization possible, as well as practical. For example, genetic testing, and in particular rapid genome sequencing, can now identify the molecular cause of disease in a single patient. And the computational power now available, including artificial intelligence (AI), can help interpret those results and design an individualized response at a speed and efficiency not previously contemplated.

The new legal, regulatory, and ethical framework taking shape

Just as new capabilities in this area have the potential to be transformative for human health, they also require entirely new thinking about existing, and potentially new, regulatory frameworks.

To date, the U.S. Food and Drug Administration (FDA) has not built a bespoke, comprehensive pathway for individualized therapies, although it has made some of the basics clear. The foundation is the existing framework for investigational new drugs, which can be administered for treatment use under FDA oversight via the expanded access process.

Beginning in 2021, FDA issued a series of guidance documents for sponsor-investigators developing individualized ASO products for severely debilitating or life-threatening genetic diseases. These address administrative and procedural recommendations, nonclinical testing, chemistry, manufacturing, and controls (CMC), and investigational new drug application (IND) submissions. More recently, FDA has issued guidance on related topics, including platform technology designation and the “plausible mechanism” framework applicable for individualized therapies that target specific genetic conditions with known biological cause.

But these documents come with significant limits. For example, they do not address development of an individualized ASO by a commercial enterprise. Companies planning to scale must therefore think past them.

Standards regarding the practice of medicine also have not yet caught up to the rapid technological innovation here. What is typically a bright line between licensed healthcare professional and drug/device manufacturer or software developer in traditional healthcare becomes muddled in the n-of-1 scenario. Companies working in this space and through this approach need to carefully consider where the line regarding the “practice of medicine” is with respect to their operations and when and how licensed healthcare professionals should be involved.

Key considerations

In short, the science is advancing faster than the law, and the gap is where legal risk and business opportunity both sit.

Some of the key issues that n-of-1 companies should consider include the following:

• Blurring of the research/treatment distinction. An individualized therapy is given to benefit the patient, but it is also experimental, and the data it generates matter to the field. As a result, there is a need to navigate a blend of institutional review board (IRB), informed consent, expanded access, and pre-approval “promotion” requirements and expectations, with key questions about who the sponsor is and the role of the clinician in decision-making.
• Reliance on cutting-edge diagnostics. These models depend heavily on genetic and other advanced testing, and many questions attach to situations where the available testing is available on “research use only” (RUO) basis, with no option for a laboratory developed test (LDT) validated under the Clinical Laboratory Improvement Amendments (CLIA) or use of an FDA-authorized product.
• Charging. FDA rules and ethical considerations associated with charging for an investigational product must be navigated. Many states also restrict markups on laboratory tests and indirect or “client” billing, which bears on how patient, laboratory, and company relationships are structured.
• Manufacturing quality. Complying with FDA requirements for manufacturing quality is not optional, even for a batch intended for one patient. Although early phase investigational products are subject to scaled expectations, there is still limited capability for compliant small-batch production, and its cost can be a barrier.
• Corporate practice of medicine. Companies that blend technology and clinical decision-making need to ask where technology ends and medicine begins and when a physician must be involved. Many states restrict non-physician ownership or control of medical practice, which is why some companies use a “friendly PC” structure while others work through patients’ existing physicians.
• Potential coverage and reimbursement. Federal health care program (FHCP) coverage does not exist today, but a model built on the assumption that it will eventually arrive should be designed now with kickback, self-referral, and billing rules in mind.

Conclusion

The promise here is real. Patients with ultra-rare or individualized diseases, who were once considered untreatable, may now have investigational options. And FDA’s current posture is more open to these programs than at any earlier point.

That said, companies that succeed will likely be those that treat regulatory and legal strategy as a core part of the business model. Companies should also take the ethics seriously. Independent monitoring, informed consent, realistic communication of potential risks and benefits, and an appropriate approach to charging should all be part of the foundation.

Although the regulatory roadmap is not yet fully clear, companies that seek to apply existing guardrails appropriately and anticipate likely new expectations should be well-positioned for whatever requirements eventually emerge.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.