Myriad CEO Discusses Reimbursement Hurdles in Molecular Testing

Mary K. Caffrey, from AJMC.com
Published: Saturday, Nov 14, 2015
Mark C. Capone

Mark C. Capone

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.1 And in some ways, it is.

But more than two years have passed since the US Supreme Court found that a naturally occurring DNA segment is not patent eligible.2 That ruling changed the landscape for Myriad Genetics, which since its founding in 1991 has cemented its place as the provider of tests for BRCA1 and BRCA2 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 $249,3 compared with Myriad’s reported pricing of $2700 to $4000, depending on whether the test screens for BRCA 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.4

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.5 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.6

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

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.

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

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.

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

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.

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