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Myriad May See Positive Revenue Impact from Classification of BRCA Testing as 'Preventive' Service

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Myriad Genetics' BRACAnalysis test is considered a preventive service under the Affordable Care Act, the molecular diagnostics firm announced this week.

In a document answering "frequently asked questions" released this week, the US Department of Health and Human Services, the Department of Labor, and the Department of Treasury explained that asymptomatic women who meet the qualifying family history criteria for breast and ovarian cancer can receive BRCA testing at no cost sharing under non-grandfathered private insurance plans. Myriad is the sole commercial provider for BRCA testing in the US for gauging risk of hereditary breast and ovarian cancer. This classification will likely broaden access to Myriad's BRCA tests, and may even mitigate the impact from recent Medicare reimbursement cuts the company is facing for such testing.

Under a provision in the ACA, non-grandfathered private insurance plans are required to cover, with no patient cost sharing, healthcare services that have an "A" or "B" rated recommendation from the United States Preventative Services Task Force. The USPSTF in 2005 recommended against routine referral for genetic counseling and BRCA testing unless women have a family history of BRCA1 or BRCA2 gene mutations (a D-rated recommendation). However, the task force also issued the B-rated recommendation that women with a family history associated with an increased risk of deleterious mutations in the BRCA1 and BRCA2 genes be referred for genetic counseling and evaluation for BRCA testing.

In a statement issued this week, Myriad noted that the USPSTF's recommendation included "some ambiguous language" and "it was unclear to health plans whether the recommendations included only genetic counseling or the actual test itself." In the latest FAQ document, the federal agencies essentially explain that non-grandfathered plans must cover BRCA testing, as well as genetic counseling, as a preventative service under the ACA for women who meet the criteria for having a strong family history of breast and ovarian cancer.

Myriad cited data collected by the Kaiser Family Foundation Employer Health Benefits Survey that showed that 48 percent of Americans with employer-provided health insurance were enrolled in grandfathered insurance plans last year, down from 56 percent in 2011. The same survey also found that high deductible plans increased from 8 percent in 2009 to 19 percent in 2012. "These plans can lead patients to delay important preventive care given the high out-of-pocket costs for healthcare services until deductibles are met," Myriad said in a statement. "Going forward, women who are members of non-grandfathered insurance plans, who are determined to be high risk by their healthcare providers, will have no out-of-pocket costs including copays, deductibles, and coinsurance when ordering BRACAnalysis and the BRACAnalysis Large Rearrangement Test as a preventive service."

This clarification about the status of BRCA counseling and testing as a preventative service for women with a family history of breast and ovarian cancer will likely broaden access among those with certain types of private insurance. The news comes as Medicare contractor Noridian released pricing for the BRACAnalysis test and BART. For the integrated BRCA test (including BART), the Centers for Medicare & Medicaid Services will now reimburse $3,382, down 16.5 percent from the previous reimbursement rate of $4,040. When separately considered, Noridian will reimburse $2,785 (down from $3,340) just for the BRACAnalysis test, and will pay $587 (compared to $700) for the large rearrangement test.

The Medicare price cuts received mixed reactions from Wall Street analysts. William Quirk, analyst for investment firm Piper Jaffray, wrote in a note that while the price cuts from Noridian were deeper than the flat-to-10 percent reductions he expected, the impact to Myriad is somewhat blunted by the fact that only 10 percent of the company's revenues come from the Medicare population. This, according to Quirk, represents around a $9 million potential reduction to the company's 2013 revenue estimates by Piper Jaffray.

BRACAnalysis is the top selling product in Myriad's molecular diagnostics portfolio. According to the company's latest financial report, for the quarter ended Dec. 31, BRACAnalysis brought in $110 million, representing 74 percent of the firm's total revenues. BART testing brought in $15.8 million, representing nearly 11 percent of the company's total revenues. The National Comprehensive Cancer Network issued guidance last year recommending that all women eligible for the BRACAnalysis test should also receive testing with BART (PGx Reporter 8/15/2012).

Meanwhile, the USPSTF is in the process of updating its recommendations for BRCA susceptibility testing for hereditary breast and ovarian cancer, and has been gathering data on how accurate physicians' risk assessment methods are for selecting which patients should receive BRCA mutation testing; and what the benefits and adverse effects are of genetic counseling patients ahead of testing.

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