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Avalere Predicts Genomic Medicine Interventions will be Subject of CMS National Coverage Decisions

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Originally published Jan. 23.

By Turna Ray

Molecular diagnostics for cancer and personalized oncology treatments will likely be a growing focus for national coverage determinations issued by the Centers for Medicare & Medicaid Services, analysis from Avalere Health suggests.

In a recent report, "Medicare’s 2012 NCD List: Will CMS Focus on Oncology and Molecular Diagnostics?," the advisory services firm concluded that out of a list of 80 potential coverage topics, 25 percent were related to oncology, and nearly half of those, or around 10 drugs or tests, were related to genomics. An NCD is a nationwide assessment by CMS of whether the agency will pay for a medical product or service.

Avalere gathered clues on CMS' potential NCD interests from the government payor's stated past Medicare priorities; NCD priorities identified by key stakeholders; the Agency for Healthcare Research & Quality's technology assessments and comparative effectiveness reviews; topics to be reviewed by the US Preventive Services Task Force; Blue Cross Blue Shield technology evaluations in progress; and recent Medicare local coverage decisions restricting coverage of certain tests, as well as other sources.

The genomically guided oncology drugs and tests that appeared most frequently across all these sources included screenings for prostate and lung cancer; treatments for localized prostate cancer; therapies in the management of non-small cell lung cancer; and pharmacogenomic testing for breast and colon cancers.

"This evaluation represents Avalere’s analysis of items and services on which Medicare may consider and is based on only a subset of factors that may be considered by CMS in its decision to initiate an NCD," Avalere states in its report. "CMS has the discretion to open an NCD on any Medicare Part A or B item or service at any time and the public has the ability to request an NCD on any Medicare Part A or B item or service. However, this analysis demonstrates that the incoming wave of innovation in oncology may receive increased scrutiny by CMS."

Another reason CMS might be more willing to issue NCDs on genomically guided medical interventions has to do with the growing adoption of such drugs and tests in the oncology setting, as well as the hefty price tag attached to these innovative treatments. Avalere estimates that 46 percent of 241 currently available genetic tests are being used to treat cancer, and points out in the report that many new oncology therapies with per-patient price tags of $100,000 or more have recently come to market.

Last year, the US Food and Drug Administration approved two new personalized cancer treatments and companion molecular diagnostics for identifying best responders to those drugs. Pfizer's non-small cell lung cancer drug Xalkori for patients with ALK mutations costs $115,200 per year, and the ALK mutation test costs under $250 per patient. Meanwhile, a six-month course of Roche/Plexxikon's melanoma treatment Zelboraf, for patients with BRAF mutations, costs $56,400, plus the cost of the BRAF mutation test, which ranges between $120 and $150 per test. Based on how robustly and for how long patients respond to the drug, they can be on Zelboraf for longer than six months.

In 2008, CMS issued a list of 20 potential NCD topics. The list included pharmacogenomic testing and gene expression profiling tests as possible subjects for NCDs. "Although CMS intended to issue quarterly updates to the list after it was first introduced, no updates have been made since 2008," the Avalere report states.

More NCDs focused on genomic medicine would be in line with a request that CMS issued in the fall for stakeholders to weigh in on the 2008 list. CMS is planning to revise its list of potential NCD topics after reviewing public comments, which were due in November.

As the Avalere report points out, CMS has taken some type of action on seven out of 20 topics issued in that 2008 list, either by issuing an NCD or evaluating the clinical utility evidence on the medical interventions through a technology assessment or by convening its Medicare Coverage and Evidence Development Advisory Committee.

In 2010, CMS convened a MEDCAC meeting to evaluate whether five genetic tests are clinically useful for the Medicare population. Of the five tests — CYP2D6 for breast cancer patients who are candidates for tamoxifen; UGT1A1 for colon cancer patients who are candidates for irinotecan; HER2/neu for breast cancer patients who are candidates for trastuzumab; BCR-ABL for CML patients who are candidates for imatinib (Gleevec); and KRAS for metastatic colorectal cancer patients who are candidates for cetuximab (Erbitux) or panitumumab (Vectibix) — the panel imparted strong confidence that the latter three were clinically useful in certain cancer populations (PGx Reporter 2/3/2010).

However, CMS has yet to take any action on the proposed subject of gene-expression profiling tests.

Avalere's report arrives during a tumultuous time for reimbursement of molecular diagnostics, upon which the administration of personalized medicine is wholly dependent. Last year, CMS issued new criteria for tracking usage, assessing utility, and setting pricing of molecular diagnostics in territories overseen by California-based Medicare contractor Palmetto GBA (PGx Reporter 11/16/2011). Labs and other test developers have expressed concern that the CMS policy may result in coverage denials for the majority of molecular tests.

However, at the same time, along with its NCD priorities, CMS is also looking to revamp its coverage-with-evidence-development program — a process through which the agency reimburses new medical interventions with the condition that sponsors will collect data showing their products and services are improving outcomes for the Medicare population. The agency believes that the CED process could provide a path for more molecular diagnostics to gather the necessary clinical utility evidence needed for reimbursement (PGx Reporter 11/16/2011).

"The CMS/Palmetto policy is a de facto national policy, as the majority of molecular diagnostics labs are based in California. However, CMS National will continue to have the NCD process to review emerging evidence for new tests or re-interpret previously available evidence for tests already in use," Reginald Williams, a director at Avaere, told PGx Reporter. "If local policies cause several inconsistent or conflicting LCDs, CMS national may step in and use the NCD process to clarify the appropriate use of molecular tests."

For example, two years ago, after CMS found insufficient evidence demonstrating that pharmacogenetically guided warfarin dosing improves health outcomes for Medicare beneficiaries, the agency decided not to cover such testing for Medicare recipients, except when it is performed as part of a prospective, randomized-controlled trial. Under this scheme, CMS is paying for warfarin genetic testing performed as part of PGx studies being conducted by Iverson Genetics and by Brian Gage, an internist and health service researcher at Washington University School of Medicine, St. Louis (PGx Reporter 7/28/2010).


Have topics you'd like to see covered in Pharmacogenomics Reporter? Contact the editor at tray [at] genomeweb [.] com.

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