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Manufacturers: Are You Familiar With Payers’ Genetic Testing Coverage Procedures?

By Carolyn Zele

As researchers continue to identify specific genetic markers within different diseases, more and more treatments targeting those markers are launching. In fact, more than 77,000 genetic tests currently are available. They can identify, for example, what type of breast cancer or non-small cell lung cancer a patient has. Some can determine a person’s risk for developing a disease, and others can predict the probability of a response to a drug. With so many tests available, it can be hard for payers to determine what to cover, resulting in a lot of coverage inconsistency. They are looking for what kind of value that a test can bring, not only toward a patient’s care but also in healthcare spending. Generally speaking, payers assume that they will have a member for up to two years before the person changes jobs and switches insurance, so they’re also looking for an imminent impact.

Payers’ ultimate goal is to keep costs down, so if a test can, for example, help keep a patient out of the hospital, then it’s likely to be covered.

However, a big misconception that companies have is that if the FDA requires a test for a drug, and the test also is required in a payer’s drug policy to confirm the diagnosis before any treatment is provided, that then means that the test is covered. However, that’s not always the case. The payer may have an above-brand policy that sits above all of the treatment paradigms and covers genetic testing. For a newly launched drug, the drug policy may have been created that requires a certain test for coverage. The test may be in the genetic testing policy with all diagnoses it applies to, but the newest use may not be included because the policy hasn’t been updated yet. At most payers, it’s not the same individual writing both the drug and the testing policies. It could take as long as a year for a commercial insurer to add a new indication to its genetic testing policy.

When it comes to the body of evidence needed for insurer coverage of genetic tests, clinical utility evolves over time. For example, when Herceptin (trastuzumab) was first approved in 1998 to treat HER2-positive metastatic breast cancer, it was approved jointly with HercepTest in order to identify patients who may be appropriate candidates for treatment with the drug. Since then, numerous other tests that can determine a person’s HER2 status have become available, and they have broad payer coverage. But newer tests may face some obstacles between the time when they first come onto the market to when they meet clinical utility standards for coverage.

So what can manufacturers do to make sure that payers are covering not only a treatment but also the genetic test needed to detect the appropriate patient? They can start by becoming familiar with how payers cover tests within their therapeutic area, and then coordinate with payers to make sure they have the information needed to gain coverage for their product.

Additionally, pharma companies should make sure that any companion diagnostics are added to payers’ genetic testing policies as soon as possible. While policies that cover a drug to the FDA-approved label must cover a companion diagnostic, an exception request may be needed.

Given the increasing number of drugs whose FDA-approved labels require the use of a particular test—along with widespread inconsistencies in coverage—manufacturers without a solid handle on payers’ approaches to genetic testing coverage could find themselves scrambling to achieve parity coverage with their competitors.

0 Comments Commercial Strategy |
Carolyn Zele

Carolyn Zele

Carolyn Zele has been a solution consultant with MMIT for the last five years helping pharmaceutical manufacturers simplify market access and prepare for launch success. Prior to MMIT, Carolyn spent numerous years in the payer/PBM space managing formulary teams and technology across both regulated and non-regulated lines of business.

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