Louis Jacques, the always outspoken director of the Centers for Medicare & Medicaid Services' Coverage and Analysis Group (CAG) earlier this month left the government payor for the consulting firm ADVI, where as of March 1, he is serving as chief clinical officer.
During his decade-long experience directing CAG and the Division of Items and Devices, Jacques implemented a number of innovative programs aimed at streamlining and clarifying the agency's evidence review process for assessing whether medical interventions were "medically necessary" for the Medicare population. He spearheaded the Coverage with Evidence Development program, a pathway through which companies can receive conditional coverage for a product while gathering the necessary evidence on the technology; co-created the parallel review pilot that allows sponsors to submit evidence simultaneously to CMS and the US Food and Drug Administration for regulatory review and reimbursement coverage; and co-authored more than 60 national coverage determinations on various drugs, devices, and preventative services, including molecular testing.
Now, in deciding to cross over to the industry side, Jacques hopes to be able to foster earlier, more informative interactions between payors and his healthcare services clients. During his time at CMS, Jacques said the thing that frustrated him the most was that by the time a company came before the agency to discuss coverage, they had already invested many years and millions of dollars to do a trial that didn't address the Medicare population. "It hadn't occurred to anyone to engage with CMS or other payors," he said.
In an interview with PGx Reporter, Jacques discussed his reasons for leaving CMS and what he hopes to achieve at ADVI, the gap between industry and payors in how they view clinical utility for molecular diagnostics, and the value of various programs aimed at gathering the evidence that such tests actually impact patient outcomes.
Below is an edited transcript of the interview.
Why did you leave CMS?
I had been doing essentially the same thing for 10 years. Before I was the [Coverage and Analysis] Group director, I was director of one of the divisions within the coverage group. It just seemed like a natural time to leave. When we all got furloughed – our entire group, aside from our commissioned officers were furloughed in October – it seemed like I had what it turned out to be about three weeks, so I thought, I might as well start exploring that. Over the years, I've found after conversations with representatives of companies that I was often left with the feeling of, "Gee, I wish they had talked to us two, three years, even four years ago. We might have been able to give them some advice back then that would have put them in a better situation now.' So, [with ADVI] it's essentially just a chance to interact earlier in the life cycle [of a product]. It just seemed like a good combination of reasons to leave.
In having conversations now with companies much earlier in the process, talking about their products, do you feel you have a better sense of the differences between how these companies are looking at the evidence base for their products versus how CMS evaluates it?
I think I was aware of those differences before. I think it's not CMS, but other payors as well, and increasingly members of the physician community who are asking for more evidence on how a patient's life is practically affected by the use of a diagnostic test, whereas the diagnostic community is only now seeing that more systematically. I don't think there have been any surprises. I have had a lot of conversations with large and small members of the diagnostics community, especially molecular diagnostics, for roughly four years. So, I had a good idea of where they were coming from.
UnitedHealthcare's Lee Newcomer has talked about how there needs to be more of a standardized system for determining whether or not a test should be reimbursed by payors. Hypothetically, he put forth the example that a test could either show 10 percent improvement in patient outcomes over the standard of care, or reduce the cost of care by 10 percent, in order to be reimbursed. Would something like that work? Is that the type of specific guidance that's needed [to foster understanding between payor and industry about clinical utility]?
I think there are some nuances where a private payor would have an interest in looking at cost. CMS as a matter of policy, with very few exceptions … has not considered cost in the making of a coverage determination. But at the same time, there are other aspects in Lee's comments in terms of having a framework that would help the entire community of interested parties, whether they are public payors, private payors, physicians, labs, or the developers of lab platforms, if people could agree on the grand vision and the grand strategy. It's clear that the historical paradigm, of stacking codes and things like that … really didn't work very well. So, if people could achieve a shared vision of how to move forward, that would certainly be good.
In other countries – and maybe this is possible because they have single payor systems – drug developers are working with the French National Cancer Institute and Cancer Research UK, for example, to try to implement multi-panel testing, creating standardized frameworks for when cancer patients should be tested and for what markers. Could we ever implement programs like that … given the differences between our reimbursement system and these other systems?
That would certainly be a challenge. There are so many differences between the European model and the US model that make me wonder if it would actually be accomplishable or not. There are certainly lessons that could be learned.
At least one lesson to draw from the way the Europeans are doing it, is that they've agreed at some level that multipanel genetic testing for certain cancer indications is necessary and valuable. We haven't even done that in a standardized way here. How can we at least get to that point? What groups and resources do we have available to us that could lead us in that direction?
I don't know that that would necessarily have to be led by one group. Although obviously on the payment side, Medicare is a huge player in this. It's going to depend on what sort of genetic or molecular testing one is talking about. If we're talking about, for example, cancer testing in populations that tend to be older, I would expect CMS to play a significant role there. But if one is talking about genetic screening, especially in a younger population, to try to address risk factors in teenagers [rather] than waiting till they are 65 years old, obviously that population of patients would be closer to the private payors. Because the payment systems are so different, it is a little bit of a challenge to say how would we do X in the US.
Fundamentally, you need to go back to the clinical evidence. What is the available evidence to support a panel-based [testing] strategy as opposed to a different algorithmic test by test strategy? What is the evidence that at the end of the day the patient is treated in a way that is more likely to achieve therapeutic success versus have we just done a whole lot of testing, when we really should have been more precise? Those choices ultimately need to be driven by evidence. The European experience, to the extent that there is evidence there that will transfer to a different regulatory and payment system, I think it could be informative. For me, it's really a wait and see.
MolDx is a program though which CMS is actually trying to bring some clarity to the evidence review process for molecular tests. What do you think of it? It seems the labs [and other groups] really don't like it. What advice are you giving to your clients?
Fundamentally, I think MolDx is a good pilot. Like any pilot, one hopes to learn some lessons about how to move forward. The paradigm that MolDx essentially replaced, which if you go back far enough was just stacking codes, was a paradigm that clearly was ill suited to support the growth of molecular diagnostics. If payors fundamentally don't know what they are paying for, it then becomes a challenge to figure out what evidence is relevant to that decision. And a more granularly transparent system ultimately leads to greater enthusiasm on the part of purchasers.
It's like, if you had to go to the grocery store, and instead of having a packaged, finished product that's labeled so you know what it is, it only had the ingredients in it in a brown bag. So, if you wanted to buy bread, or cookies, or cake, but all you had was a brown bag and all it said was that it had 140 grams of flour, there's a bit of sugar, there's a bit of this and a bit of that, you might be reluctant to buy from that store because you really had no idea whether what you were buying actually suited your needs. … I think it's important for a payor to know not just that they bought a test for X, but specifically which test for X they are buying. That creates an opportunity for developers of tests to actually establish a brand value for their test, and essentially say, 'Look, based on the evidence, my test actually performs better and is more useful for physicians and ultimately for patients than other tests that might claim to do the same thing.'
There is an article published in the March 12 issue of the Journal of the American Medical Association, entitled "Clinical Interpretation and Implications of Whole-Genome Sequencing" with an accompanying editorial by William Feero, [called "Clinical Application of Whole-Genome Sequencing: Proceed with Care."] One of the things that's clear when you look at things like that, is that genomic testing taken broadly is kind of like a high school … When you look at 9th graders to 12th graders, there are obviously differences in maturity, acceptance of responsibility. There are all sorts of differences. And in general, while one might say the seniors are farther along than the freshmen, we all recognize that some seniors continue to have challenges and some freshmen are particularly precocious or just have a better idea of how life works.
When one looks at molecular diagnostics broadly, there are some [tests] that are arguably precocious and have staked out a good value proposition for payors and there are others where there may be a lot of potential but you really don't know how they're going to do when they get to college. And there are others that you just sort of scratch your head and wonder. It's going to take a while to sort all that out. MolDx is one step toward trying to get more clarity in that space.
There are some in the lab industry who feel that the payment system favors branded tests, or so-called boutique tests [ie. multi-analyte algorithm assays]. What do you say to those labs, and where do these types of [boutique] tests fall in your high school scenario?
Well there are some nuances there. Some of those branded tests have in fact been reviewed by the FDA. And I think FDA review to the extent that it establishes analytical and clinical validity puts those particular tests in a different position with payors. For tests that have not been reviewed by the FDA, often the available evidence is limited and has been generated by parties who have a personal interest in a particular product. That, for obvious reasons, makes it more difficult for payors to get really enthusiastic in that space.
So, if one were to look at that again as representing some of the heterogeneity in a high school class, you have members of the class who took the ACT or the SAT a little bit early, they're already doing advance placement courses or things like that. You're sort of getting a better sense of how they might do with college level work. On the other hand, there might be others in the class who may ultimately be as successful or even more successful in college. It's just they haven't necessarily cleared certain hurdles. There are some colleges that will accept you without standardized testing, so things aren't always necessarily predictable. But the high school analogy still kind of holds true in that space.
Moving on to Coverage with Evidence Development (CED), that's a mechanism through which companies could get some reimbursement while they do the studies that could yield the types of evidence that could eventually give them coverage. So, why has the CED program lagged in terms of including more molecular tests? I've heard that this may be due to CMS' reluctance, and I've also heard that the reluctance is on the part of industry to engage in CED. How can this program be better implemented to bring more clarity to the molecular diagnostics space?
There are a couple of things on this point, and some of them are truly boring. Obviously we did the [CED on] pharmacogenomics for warfarin responsiveness prediction a few years ago. And we have had several Medicare Evidence Development & Coverage Advisory Committee [meetings] on molecular diagnostics but haven't done any more National Coverage Determinations or CEDs. There's a practical reason for that. Approximately five or six years ago, the coverage group was almost 60 people. With successive [full-time equivalent] freezes, hiring freezes, FTE rebasings, and the recent sequester, the coverage groups are down somewhere a little bit below 30 people. Where we used to do 10 to 15 national coverage determinations in a year, in the last couple of years we have been down to five or six. The ones that have been done have reflected administration priorities around prevention.
To the extent that the national CED paradigm has been linked to the national coverage determination process, the significant decrease in the number of national coverage determinations goes hand in hand with a decreased opportunity for national coverage with evidence development. I do think that in the warfarin decision, we laid out a paradigm that if we were going to do these things nationally, this is how we would look at it. So, if we were looking at CYP2C9 and VKORC1 paradigms, what we said essentially is this: While there are tests that identify patients who are likely to have changes in their metabolism of warfarin, if one looks at the labeling for warfarin – and I spent a lot of time looking at the labeling for warfarin back then – it essentially says to initiate at a low dose and titrate carefully and slowly if the patient has a risky genetic profile and if the patient is old with multiple comorbidities and is taking one of approximately 130 medications known to interact with warfarin.
When you look at the typical Medicare beneficiary population, which is an older population taking multiple medications with multiple comorbidities, some of whom are very frail, regardless of their genetic test results, these patients by and large should be initiated [on warfarin] at a low dose and titrated slowly. So, what in fact is the additional benefit or impact of doing a molecular test if you have to treat the patient in the same way as if they had a positive test?
[With that decision] we laid out a roadmap or a paradigm that said, "If we were going to do every one of these things nationally, this is the paradigm that we'd be applying." The reality is that we haven't had the resources to keep doing more and more national coverage decisions. So, what the agency has tried to do is continue to make statements in this space through the MEDCAC, [which] has continued to endorse the use of the ACE criteria, has continued to advocate for evidence on clinical utility. So, on the CMS side, it has simply been a practical issue. It was never a loss of interest in molecular diagnostics. We were being pulled in a lot of different directions based on other priorities.
On the industry side – and this is broader than diagnostics – there are some folks who simply are reluctant to embrace CED. I wonder if part of that is because CED has historically been part of the national coverage determination process. Industry, in general, doesn't love being part of an NCD, either, unless there is a historic non-coverage in place. I wonder how much of the reluctance, to the extent that there is any, isn't confounded by a reluctance about engaging in the national coverage determination process.
It would certainly be interesting to create a paradigm where for certain products, whether they are tests or anything else, CED could be presumed … without the need to go through a national coverage determination. For products that have particular characteristics, whether these are characteristics in their FDA labeling or … if a company desires some sort of accelerated approval or deferral of pre-market requirements into the post-market space, would CMS be willing to engage in a CED paradigm that might be developed for these volunteer products? These are all interesting things and whoever becomes my successor at CMS, I'm sure, will be asked these questions.
One of the innovative areas you've had a hand in is the parallel CMS/FDA review process, and you've discussed how there is some reluctance there, too. Industry players seem to ask for a more streamlined evidence submission process where they could satisfy FDA and CMS criteria with one study, for example. But when offered the chance to have parallel review of a product by FDA and CMS, few companies take it up. You said once at a meeting on this topic: "The only conclusion I've drawn from that is it's kind of like when you tell your mother that you're at the library but you tell your father you really went to Cancun on spring break. You don't really want them talking to each other." So, how is the parallel review pilot going? After Exact Sciences' experience [taking Cologuard through parallel review], do you think more test developers will take that pathway or will they still try to keep mom and dad apart?
That pilot isn't completed yet. The meeting on Cologuard [by the FDA Medical Devices Advisory Committee's Molecular and Clinical Genetics Panel] is scheduled for March 26. My impression was that the pilot was working well for Exact Sciences, for FDA, and for CMS, and that people were seeing the real advantages of having the parties together to have conversations, as opposed to less efficiently trying to engage in entirely distinct lines of conversation … I can't claim to speak for Exact Sciences, but my overall impressions from the interactions I had was that people were seeing the pilot as a positive thing and were seeing added value from it, as opposed to seeing it as a multiplication of risks or burden.
So, what do you hope to achieve at ADVI?
My core interest is trying to help companies avoid having those conversations with CMS where the only argument they can make is based on a decision they made three or four years ago, when they designed their clinical trials … If device sponsors have the opportunity to interact [with CMS] while they are still planning their pivotal trials, there's an opportunity potentially to make very small changes early on, that can be easily made early on, that can help them be in a much better place three years down the road.
It really was frustrating … not to convey any anger, but sometimes it just felt sad to talk to a company that had already invested many millions of dollars and many years on a clinical trial, and it hadn't occurred to anyone to engage with CMS or other payors. They either had exclusion criteria that meant that the device hadn't been tested in patients who were older and female, like the typical Medicare beneficiary, or the outcomes of interest were technical outcomes that didn't really reflect how a technology would impact patients. The opportunity to have those conversations earlier on in the life cycle … that's the really interesting part for me.
I spent the last three years at CMS doing a lot with the FDA … And I really think there is tremendous opportunity, if people want to take it, for early engagement. And to the extent I can be a part of that on the outside, that's what interests me the most.
It always strikes me when I go to conferences where a discussion on molecular diagnostics reimbursement is on the roster and CMS representatives are there, how well those sessions are attended. It's always a packed house. But at those meetings, CMS officials always end up being the most unpopular people in the room. So, now that you're out of CMS, are you getting invited to more parties?
[Laughs] What's interesting is that while I was at CMS, I obviously had to accept speaking engagements for the coming year, because for all I knew I was going to be staying there. So, when I was getting ready to leave, I emailed all these meeting sponsors and said, "I'm leaving CMS. Because you invited me as a CMS employee, I want to give you the opportunity to disinvite me." With almost no exceptions … everyone said, "No, we still want you to come." So, whether I am popular or not, you'd have to ask someone else.