NEW YORK (GenomeWeb News) – Myriad Genetics today announced that the Medicare administrator for Utah intends to add the Prolaris prostate cancer test to its next draft Non-covered Service LCD (local coverage decision).
The Medicare administrator, Noridian, will solicit public and provider comment on the test before making a final decision. During the public comment period, Myriad will review the draft LCD with Nordian "to underscore" the role of Prolaris as a molecular staging tool to guide treatment of prostate cancer, Myriad said, adding that it will provide additional clarity on the current use of the test for medical management of patients with the disease.
"There is a strong and unmet immediate medical need for a personalized prognostic medical management tool like the Prolaris test to assess the aggressive nature of patients' prostate cancer," Michael Brawer, vice president of Urological Medical Affairs for Myriad Genetic Laboratories, said in a statement. "We are committed to working closely with Noridian, as well as other payors, as we believe every man diagnosed with prostate cancer, and his physician, should have access to this clinically critical information."
In a research note, Goldman Sachs analyst Isaac Ro called Noridian's decision "benign" and will be "ultimately positive for Prolaris. …While this decision came as a slight surprise, Noridian has initially issued non-coverage status to a vast majority of molecular tests in the past only to reverse position and grant coverage following the comment period.
"We believe today's announcement merely highlights the lengthy nature of the reimbursement process and continued need for [Myriad] to spend on the development and commercialization of its pipeline," he said.
Likewise, Mizuho Securities analyst Peter Lawson said in a note, "We believe a negative initial decision is typical for high complexity tests, and merely reflects Noridian's need of more detailed information. We see a de-minimus impact near-term, and the decision could be readily reversed with further details."
Ro added that Myriad officials highlighted Nordian's wish to see data supporting analytical validity, clinical validity, and clinical utility during the reimbursement process for new tests.
"We believe the first two items have been well established while the third will be the focus during the comment period," Ro said. "We expect current physician users of Prolaris to submit comments supporting the clinical utility of this test. To a lesser extent, we also expect [Myriad] to point to a recently completed Phase 4 trial … and how results from this study will help to influence physician use of Prolaris.
He maintained a Buy rating on Myriad.
In Monday morning trade on the Nasdaq shares of Myriad were down a fraction of one percent at $27.27.