When the words “precision medicine” make it into a State of the Union address, one could argue it’s the best of times for anyone in the genetic testing business.

But more than two years have passed since the US Supreme Court found that a naturally occurring DNA segment is not patent eligible.

 That ruling changed the landscape for Myriad Genetics, which since its founding in 1991 has cemented its place as the provider of tests for 

 mutations, alerting women to their risk of breast or ovarian cancer.

Today, Myriad competes in its core business with other test makers; these include both conventional laboratories and companies that sell genetic tests directly to the public. These “direct to consumer” tests are sold without insurance coverage at very low prices—for example, Color Genomics’ test costs $249,

 compared with Myriad’s reported pricing of $2700 to $4000, depending on whether the test screens for 

 mutations only or for multiple hereditary cancers (prices reported by the company).

It’s not clear whether the FDA will allow direct- to-consumer sales to continue. While the prospect of regulation looms for molecular diagnostic testing, it’s not there yet. The industry lacks the level of certainty seen in drug development, where a regulator’s seal of approval can be hard won but typically means payment will follow.

In genetic testing, challenges abound with reimbursement, with different payers seeking different levels of evidence. Myriad has been able to consolidate its reimbursement processes with a single Medicare administrative contractor, the Molecular Diagnostics Services (MolDX) Program of Palmetto GBA.

But change in the industry is coming, too, thanks to legislation passed in 2014 that will eventually call for the Centers for Medicare & Medicaid Services (CMS) to move to a market- driven reimbursement system.

The past year has been both challenging and eventful for Myriad Genetics. It received a local coverage determination from Palmetto GBA for its Prolaris prostate cancer test, although Medicare reimbursement took longer than anticipated.

 The company is transitioning its business from its historic reliance on BRCA testing to broader hereditary cancer screening, as well as new areas that include mental health and rheumatoid arthritis via its 2014 acquisition of Crescendo Bioscience.

Companion diagnostics is another growth area, and in December 2014 the company reached a high water mark when FDA approved BRACAnalysis CDx as the companion diagnostic for Lynparza (olaparib) in patients with ovarian cancer.

 And as of June, Myriad Genetics has its first new president and CEO since its founding.

	Q: What are your thoughts on the Obama administration’s Precision Medicine Initiative?

	Q: Much has been written about the challenges with reimbursement, particularly with CMS. How is the process going these days?

Mark C. Capone joined the company in 2002 and had served as president of Myriad Genetic Laboratories since March 2010. Evidence-Based Oncology spoke with Capone about the challenges and opportunities in molecular diagnostics, and what’s ahead at Myriad Genetics. Below are edited excerpts from the interview.

We were delighted to hear President Obama talk about the promise of personalized medicine. We have shared that perspective for over two decades, and we believe that these technologies not only have the opportunity to transform the lives of our patients, but also to fundamentally change the trajectory of healthcare costs in this country. Access to personalized medicine can come down to whether insurers will pay for testing.

It’s fair to say that reimbursement in personalized medicine is still in its infancy, and there are still some shifting sands around the criteria required for reimbursement. We have seen progress from the CMS perspective with all of the decisions around coverage being consolidated with [Palmetto GBA’s] MolDX program. Having a single contractor with a consistent process by which medical diagnostic products are evaluated is useful for those of us that develop these products. We need some forward visibility as to how they will be evaluated so that we can put together our clinical development programs.

	Q: Is there an emerging set of best practices to obtain approval for reimbursement? Are we getting closer to a defined process, similar to what exists at FDA?

The MolDX program has been open to feedback from industry about different ways to approach reimbursement. We have been quite active in providing feedback, and in working with MolDX to identify appropriate ways to provide clinical data for their technical assessment programs. MolDX has also put in place consultation services for companies that are developing products prior to those clinical development programs being initiated, to provide further insight into what types of programs would be useful.

It’s emerging slowly. There are some guidelines that have been published by MolDX on levels of evidence that would be required to obtain reimbursement.

You also have some other technical assessment committees that are beginning to establish evidence- sharing levels as well. I think we’re slowly beginning to see those emerge, but I would say that at this point the process is not nearly as defined as you might have at an agency like the FDA.

	Q: What about commercial payers? Is there consistency from payer to payer?

	Q: Are these disparities between payers getting wider or narrower?

There are still some uncertainties, and the best way to deal with that uncertainty is to have very early conversations with payers about what level of evidence they will require for a specific test.

I would still characterize it as significant inconsistency between payers. In Medicare, with all of that decision making now consolidated within the MolDX program, at least you don’t have an inconsistency between Medicare contractors; so I think that’s a positive step forward. Among the private payers, there is still quite a wide disparity as to levels of evidence that may be required.

Because the education levels are increasing among payers in general, I do see some progress toward consistency, but I think that pace is relatively slow at this point.

How are providers doing with molecular diagnostic testing? Are tests being used correctly? It’s imperative for a laboratory to [provide] extensive education to healthcare providers about the appropriate patients to test, how to interpret tests, and how to modify medical management after the patient receives the results.

We have seen examples where that type of education by Myriad, which invests very heavily in education, makes a big difference with providers. By way of example, we had a poster published that showed for hereditary cancer testing over 93% of the tests we received were for patients who met [National Comprehensive Cancer Network or NCCN] criteria, and another 6% of the patients had an underlying cancer consistent with the general criteria for that particular hereditary cancer.8

That leaves only 1% of the patients [receiving the test] that didn’t seem to have any ties to the NCCN guidelines.8 By comparison, another lab that published similar data found that 30% of the tests were being ordered inappropriately. That’s a lab that has little educational efforts with providers. I think it’s a very clear distinction between laboratories that invest in education and those that don’t.

	Q: What about direct-to-consumer tests that are sold without involvement of insurance coverage? How does Myriad respond to these tests?

When physicians are properly educated, when you have quality control procedures in your lab like we do at Myriad, you can be sure the tests that are being run are consistent with guidelines.

I think it’s a critical part of the education process that physicians understand the difference between the various tests that are available. There are a number of companies that are characterized as [offering] “recreational genomics,” and there are companies like Myriad that are very focused on the highest quality clinical tests in order to ensure the appropriate decision making by both the patient and the physician. We try to ensure that our education efforts allow the patient and the physician to understand those differences.

For example, we invest very heavily in the quality of sequencing we provide. We employ a number of different technologies to ensure that the sequence is accurate.

Second, we also invest an enormous amount to ensure the interpretation of that sequence is accurate as well. There’s evidence that public databases that were designed for research purposes are fraught with errors, and if you were to use those databases to interpret test results, you run the risk of getting a false result to patients. Third, we provide an appropriate level of service, so that a patient and a physician know when testing is appropriate and know how to use that test for medical management. When you look at what it takes to ensure that quality of end-to-end service…it really requires a pretty significant cost structure to ensure that kind of accuracy.

What’s important to a payer is that the implications of a false test result are very significant. A false positive means that a patient is potentially going to pursue prophylactic surgery and unnecessarily remove healthy organs. A false negative means the patient is not going to undergo the surveillance required to ultimately prevent cancer.

Either one of those false test results can cost a payer hundreds of thousands of dollars, so it’s worth it to make sure the most accurate test is being used up front to avoid that patient impact and cost implication downstream.

Have payers refused to cover a surgical procedure based on a result from a direct-to-consumer test? I would not know if there are specific examples because we don’t see that information. However, providers are beginning to appreciate that these tests are not regulated by the FDA. So, claims that are being made by these tests have not undergone rigorous review by an agency such as the FDA.

You are aware of the extensive conversations surrounding regulation of laboratory-developed tests, but at this point they remain outside FDA regulation. Both payers and providers are aware some of these claims may not be substantiated by significant additional data. Will the rise of direct-to-consumer tests make regulation happen more quickly?

I do know the FDA has stated before that when it comes to BRCA or hereditary cancer tests, in which the patient is making very significant medical management decisions—those are the examples of the tests they are most concerned about. Those are the ones they would classify as high risk. To the extent that high-risk tests proliferate in the marketplace without having those claims reviewed by the agency, I think it does increase the urgency with which the FDA will pursue regulation.

			President Obama’s precision medicine initiative: fact sheet. White House website. https://www.whitehouse.gov/the-press-office/ 2015/01/30/fact-sheet-president-obama-s-precision-medicine- initiative. Published January 30, 2015. Accessed July 14, 2015.

			Association for Molecular Pathology v. Myriad Genetics, Inc. SCOTUSblog website. http://www.scotusblog.com/case-files/cases/association- for-molecular-pathology-v-myriad-genetics-inc/. Published June 13, 2013. Accessed July 13, 2015.

			Chen C. Color Genomics sells $249 breast cancer gene test to the masses. Bloomberg website. http://www.bloomberg.com/news/ articles/2015-04-21/color-genomics-brings-245-breast-cancer-risktest- kit-to-masses. Published April 21, 2015. Accessed July 10, 2015.

			CLFS Reform. American Clinical Laboratory Association website. http://www.acla.com/clfs-reform/. Accessed July 14, 2015.

			Myriad Genetics posts in-line Q3 earnings, guides lower. Zacks website. http://www.zacks.com/stock/news/173953/myriad-genetics- posts-inline-q3-earnings-guides-lower. Published May 6, 2015. Accessed July 10, 2015.

			Myriad Genetics to acquire Crescendo Bioscience [press release]. Salt Lake City, UT: Globe Newswire; http://investor.myriad.com/ releasedetail.cfm?releaseid=823235. Published February 4, 2014. Accessed July 9, 2015.

			Myriad receives FDA approval of BRACAnalysis CDx as companion diagnostic for Lynparza (olaparib) in ovarian cancer patients [press release]. Salt Lake City, UT: Globe Newswire; http://investor.myriad. com/releasedetail.cfm?releaseid=888523. December 19, 2014. Accessed July 9, 2015.

			Smith S. Assessment of laboratory-based quality control processes to ensure appropriate utilization of genetic testing for hereditary cancer risk. Presented at: American College of Medical Genetics Annual Meeting, Nashville, Tennessee; March 27, 2014. Poster 165.

Mary K. Caffrey is a writer and editor for the 

Articles

Mark C. Capone discusses the challenges
and opportunities in molecular diagnostics,
and what's ahead at Myriad Genetics.

Myriad CEO Discusses Reimbursement Hurdles in Molecular Testing

The discount drug program intended for safety-net hospitals and special AIDS clinics has mushroomed even more than earlier reports have suggested, with oncology drugs fueling much of the growth, according to a new report commissioned by community oncology providers.

An examination of Medicare Part B hospital outpatient spending shows that 340B institutions accounted for 58% of all spending on drug payments in 2013, with oncology drugs making up 40% of the Medicare fee-for-service costs. The study, by Aaron Vandervelde of the Berkeley Research Group of Washington, DC, was sponsored by the Community Oncology Alliance (COA), which has sounded the alarm about unrestrained 340B growth in recent years.

Figures from 2010 through 2013 reveal explosive growth in cancer drug spending in the 340B sector: Medicare Part B reimbursement rose 123% for oncology drugs in this period, compared with 31% for non-340B hospitals and a 5% decrease for community oncology practices. Medicaid expansion may only exacerbate these trends if there are no changes to the program, according to the report.

Cancer drugs have become “the pot of gold at the end of the rainbow,” for 340B hospitals, said Ted Okon, executive director of COA. Okon said the report underscores two key problems: it’s too easy for hospitals to qualify for the program, and hospitals have powerful financial incentives to buy up oncology practices, so these financial strategies can proliferate at sites beyond the hospital walls.

		Total Hospital Outpatient Part B Drug Reimbursement

		Vandervelde A. 340B Growth and the Impact on the Oncology Marketplace. Community Oncology Alliance website. http://goo.gl/ZffY2a. Published September 15, 2015. Copyright Berkeley Research Group. Reprinted with permission.

The original purpose of 340B was noble: Hospitals caring for patients who may be uninsured or underinsured can buy drugs at discounts of 20% to 50% but charge full price to those able to pay, or to their insurer, which can include Medicare or Medicaid. But if this practice extends to oncology practices owned by the hospital, the ability to buy discounted drugs and charge insurers a higher price does many things at once: First, it forces independent oncology practices to compete with hospital-owned providers when they lack access to similar discounts; many are compelled to either join with the hospital or go out of business.

Second, Okon explained, the ever-increasing pool of providers buying “discounted” drugs means those rebates have to be built into the overall price, which has contributed to trends in oncology costs seen today.

“Already, 340B expansion has had unintended consequences,” Okon said. “Anyone who doesn’t think all these rebates are not fueling drug prices is not paying attention.”

While a July report by the Government Accounting Office (GAO) found that the 340B program had created perverse incentives for hospitals to prescribe more drugs and more expensive drugs, its finding that 40% of hospitals were enrolled did not fully capture the scope of recent growth. By looking at actual spending on prescriptions and comparing 340B and non-340B hospitals, Okon said, the report shows that “the big growth is on the hospital side, not the grantee side”; the latter group includes federally qualified health centers, Ryan White HIV/AIDS Centers, and other specialized clinics.

What’s more, spending on cancer drugs appears to be a business strategy among the 340B hospitals; left unchecked, this will only encourage more program growth, with consequences for all payers, Medicare and Medicaid, and patients who will face a combination of higher copayments and fewer care options in their communities. The report stated, “Oncology drug reimbursement has increased by 86% at continuously enrolled 340B hospitals and 58% at non-340B hospitals. Although some of this growth is a function of changing demographics and advancements in chemotherapy (which typically come with an increased cost), the disparity in growth rates between 340B and non-340B hospitals speaks to the disproportionate role that 340B hospitals play in the acquisition of community oncology practices.”

		Percent of 2013 Outpatient Part B Drug Reimbursement to 340B Hospital Type

“This is, in large part,” the report concluded, “a function of the sizeable profits that 340B hospitals realize on Medicare and commercial reimbursement of oncology drugs.”

		The 340B program grows each year. In 2010, there were 89 new hospitals enrolled classified as “Disproportionate Share,” or DSH, along with 342 non-DSH. A hospital’s DSH status is calculated based on whether patients qualify for Medicare Part A, Medicaid or Supplemental Security Income. The number of new enrollees rose each until 2014 brought 324 new DSH enrollees and 1222 non-DSH.

		The report found that new enrollees—those arriving in 2010 or later&mdash;accounted for 23% of Medicare Part B outpatient drug spending in 2013.

		Medicare spending in 2013 on oncology drugs in 340B hospitals outpaced that of non-340B hospitals, $3.064 billion to $2.672 billion, even though overall hospital revenues are higher among the non-340B hospitals, $1.968 trillion versus $1.411 trillion for 340B, respectively.

		The gap in spending per-beneficiary in Medicare Part B FFS for oncology drugs between 340B hospitals and community oncology practices is large and growing: In 2010, 340B hospitals spent $1722 per patient per day, while community practices spent $1226. In 2013, the per-patient, per-day figure had grown to $1920 for 340B hospitals but barely budged for community practices, to $1266, at a time when the cost of cancer drugs is soaring.

The report confirms the overall conclusions of the GAO findings. The agency said, “While it is not unlawful for hospitals to benefit financially from the drug discount program,” the report said, such practices are “not consistent with the legislative intent of the 340B program.” It noted that taxpayers generally and patients individually suffer harm, since Medicare Part B beneficiaries are responsible for 20% copayment, which will rise along with drug prices. That report also questioned whether all healthcare provided in 340B hospitals is appropriate, and states, “Absent a change in financial incentives, potentially inappropriate spending on drugs may continue.” The report comes as the Health Resources and Services (HRSA) takes comment on a proposed guidance that would increase oversight and double the number of conditions needed to qualify for 340B status. Some hospital groups have questions whether the rules will simply make oncology care more bureaucratic and inconvenient for patients, and whether limits on access will result. “The 340B program is very administratively complex and costly to administer now,” Beth Feldpush, senior vice president of advocacy and policy for America’s Essential Hospitals said when the guidance was issued. “For our members that rely on the savings, I could see where if HRSA narrowed the program so much, a hospital could say the costs to run this program may outweigh (the benefit of) participation in it.” Comment on the guidance continues through October 27, 2015.

The discount drug program intended for
safety-net hospitals and special AIDS
clinics has mushroomed even more than
earlier reports have suggested, with oncology
drugs fueling much of the growth, according
to a new report commissioned by community
oncology providers.

Cancer Drugs Drive Costs Beyond Forecasts in 340B Discount Program

There was a time when a cancer diagnosis brought a single-minded focus on fighting the disease, with less thought to quality of life afterward. But the sheer number of survivors— nearly 15 million in the United States, or 4% of the population&mdash;has brought greater attention to ensuring that cancer treatment does not cause other harms, since cancer patients are not only living but also living longer. The National Cancer Institute reports 41% of cancer survivors live 10 years or more, and 15% live 20 years or more.

After secondary malignancies, cardiovascular(CV) issues are the leading cause of late morbidity and death among cancer survivors.

 The need for oncologists and cardiologists to be more proactive in developing strategies to work together to prevent heart problems for cancer patients—and later, survivors&mdash;was the force behind the half-day Cardio-oncology Intensive, which featured more than 60 presenters and panelists across 6 hours at the American College of Cardiology’s 64th Scientific Session & Expo, held March 14-16 in San Diego, California.

The need for collaboration was summed up by Jean-Bernard Durand, MD, medical director of Cardiomyopathy Services at The University of Texas MD Anderson Cancer Center in Houston, who told attendees that to be “fully engaged” every cardiologist should attend at least one cancer meeting a year. Bertrand was a co-author on a 2012 profile of a group of cancer survivors who took part in a Cardiovascular Prevention in Cancer Survivors clinic, which found that the mean vascular age was 8.4 years older than the mean chronological age.

 Some risk factors those patients faced are well-known: three-quarters had received anthracycline chemotherapy, while half had received radiation.

Much can be done, however, in areas of prevention and diagnostics. Some presenters focused on more precise assessment of a patient’s CV condition before proceeding with chemotherapy, on the use of molecular diagnostics in cancer treatment, which have reduced reliance on anthracycline chemotherapy, and on better assessment of a patients CV and lipid profile before cancer therapy begins. Too often, presenters said, patients should have been taking cardioprotective therapies anyway for hypertension or diabetes.

Erica L. Mayer, MD, MPH, a breast oncologist from Dana-Farber Cancer Institute, said many years ago, treating a very young woman with anthracycline for triple--negative breast cancer was a fairly straightforward decision. “It likely had substantial benefit,” and probably saved the woman’s life, she said.

If the woman develops a second cancer, however, her options are much more limited, said Mayer. Today, weighing the risk-benefit ratio of cancer treatment with cancer survival offers many more choices, especially in an age of precision medicine. Mayer said that like many other oncologists, she uses the diagnostic test Oncotype Dx to determine which patients would not benefit from certain more toxic therapies; overall, the use of anthracyclines has declined.

When tests offer prognostic and predictive information that the cancer will not respond to chemotherapy, she said, endocrine-based therapy is used instead.

Mayer said, however, that oncologists would benefit from more understanding of how biomarkers are changing the diagnostic process on the cardiology side, so that they would make more referrals instead of simply ordering an echocardiogram. It’s time, she said, for the oncologist to partner with the cardiologist, “hopefully someone with knowledge of oncology, on how to best co-manage the care.”

During a discussion of cardioprotective strategies, exercise physiologist Lee Jones, PhD, director of the Cardio-Oncology research Program at Memorial Sloan Kettering Cancer Center in New York City, emphasized the importance of getting an initial assessment of a patient before treatment starts. When he is asked, “How much should I exercise during chemo?” the answer in highly personal, because it depends upon the patient’s activity level and condition before treatment began.

It’s not well understood, Jones said, that patients need exercise at different levels of intensity, and some low-intensity exercise is important and beneficial.

In discussing patient cases, presenters noted how often cancer patients arrived with underlying untreated diabetes or hypertension that had to be addressed. Not only do therapies like beta blockers provide treatment for cardiovascular issues, but they may improve survival, according to research cited by some presenters.

Susan Dent, MD, a medical oncologist at The Ottawa Hospital Cancer Centre in Canada, said there is a great need to expand the evidence base on cardioprotective medications in cancer care. “There’s no consensus on what is the best approach,” she said.

			Office of Cancer Survivorship. Statistics.National Cancer Institute website. http://cancercontrol.cancer.gov/ocs/statistics/statistics. html. Updated May 30, 2014. Accessed March 17, 2015.

			Daher IN, Daigle TR, Bhatia N, Durand JB. The prevention of cardiovascular disease in cancer survivors. 

The sheer number of survivors- nearly 15 million in the United States, or 4% of the population-has brought greater attention to ensuring that cancer treatment does not cause other harms, since cancer patients are not only living but also living longer.

Mary K. Caffrey, from AJMC.com

Articles

Myriad CEO Discusses Reimbursement Hurdles in Molecular Testing

Cancer Drugs Drive Costs Beyond Forecasts in 340B Discount Program

Cardio-Oncology Care Emerges as a Specialized Need