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Will Insurers Cover $700 for Myriad's Large Rearrangement Test Plus $3K for BRACAnalysis?

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This article has been updated to correct that Ellen Matloff is a plaintiff in AMP v. USPTO.

After the National Comprehensive Cancer Network issued treatment guidelines earlier this year recommending that all women eligible for Myriad Genetics' BRACAnalysis test be further analyzed for large gene rearrangements not detected by the original test, the company is hoping that more insurers will cover the cost of this separate diagnostic, called the BRACAnalysis Large Rearrangement Test, or BART.

During a call held this week to discuss the company's fiscal 2012 earnings, Myriad officials announced that in light of favorable NCCN guidelines, the firm has begun conversations with managed care organizations to expand coverage of gene mutation testing for hereditary breast and ovarian cancer to include the BART test in addition to its Comprehensive BRACAnalysis test.

In its latest guidance on the subject, NCCN states: "It is important to mention that certain large genomic rearrangements are not detectable by a primary sequencing assay, thereby necessitating supplementary testing, in some cases. For example, there are tests that detect rare, large cancer-associated rearrangements of DNA in the BRCA1 and BRCA2 genes that are otherwise not detected by direct sequencing of the BRCA1/2 genes."

Myriad's $3,340 Comprehensive BRACAnalysis test includes complete sequencing of the BRCA 1 and BRCA 2 genes and detects five common large rearrangements in the BRCA 1 gene. Not included in the Comprehensive BRACAnalysis test is BART, launched in 2006, which gauges additional large rearrangements in the BRCA 1 and BRCA 2 genes.

According to Mark Capone, president of Myriad Genetic Laboratories, the company's reimbursement discussions with insurers for BART have been encouraging so far. "We have received some very positive feedback from insurers," he said during the earnings call.

With the promise of expanded coverage for BART, Myriad will now scuttle a program under which it was offering some patients at high risk for breast and ovarian cancer the large rearrangement test for free, and will tag the diagnostic with a $700 list price. According to Myriad CEO Peter Meldrum, that list price will serve as the starting point for reimbursement discussions with insurers.

However, patient advocates who believe that Myriad is already charging too much for its Comprehensive BRACAnalysis test have criticized the company for selling BART as a separate test. For Ellen Matloff, director of cancer genetic counseling at the Yale Cancer Center, the fact that Myriad is marketing a "comprehensive" BRACAnalysis test that doesn't gauge key rearrangements amounts to false advertising.

Matloff acknowledged that NCCN support for BART testing should spur more coverage for the test, but she took issue with Myriad's business ethics. "Not including an essential part of the test in what they call Comprehensive BRACAnalysis [is] absolutely unacceptable," she said. "Now that the NCCN guidelines have backed up what all of us have said — that every patient who is a candidate for BRACAnalysis should also have BART — I think what the right thing to do would have been to combine this into one test."

Well before NCCN recommended BART, healthcare providers and patient advocates were urging Myriad to fold BART into BRACAnalysis as a single offering. Last year, after Myriad released data showing that a certain portion of deleterious mutations are missed by standard BRCA testing, a group of 200 genetics professionals, surgeons, oncologists, and nurses led by the Yale Cancer Center wrote an open letter to the company asking it to incorporate this large rearrangement analysis into its Comprehensive test at no additional cost (PGx Reporter 8/3/2011). "We wanted BART to be a part of BRACAnalysis but [Myriad] ignored that," Matloff said.

Even if most insurers cover BART testing, ultimately the decision is up to the patient and the doctor as to whether to order the additional diagnostic. The fact that Comprehensive BRACAnalysis doesn't include BART could result in confusion among healthcare providers and cause them to believe that the original test covers all the important markers associated with breast and ovarian cancer susceptibility.

"Despite the fact that improvements in genetics technology have dramatically reduced the cost of performing genetic testing, Myriad's price for this test has continued to go up further," Sue Friedman, executive director of the patient advocacy group Facing Our Risk of Cancer Empowered, told PGx Reporter over e-mail. "Further, I fear that women undergoing 'Comprehensive BRCA testing,' which does not include BART, could mistakenly think they had complete BRCA testing. It is unconscionable that Myriad is providing the test in two separate parts in order to gain maximum reimbursement."

Matloff further added that the majority of people ordering genetic testing for breast and ovarian cancer don't even know what BART is.

Myriad officials, on the other hand, feel justified in charging separately for BART since the company has invested in conducting studies to establish the clinical importance of the large gene rearrangements for which BART tests. "The company has worked very hard to do clinical studies to support BART testing for all patients because we felt that BART was a very important component," Meldrum said.

According to Meldrum, NCCN updated its guidelines to recommend BART analysis for all who are eligible for BRACAnalysis testing based on data from a 25,000-patient study that showed between 6 percent and 9 percent of BRCA mutations linked to increased risk of hereditary breast and ovarian cancer were due to these large rearrangements. Meanwhile, the Comprehensive platform picks up around 93 percent of all deleterious mutations in BRCA 1 and BRCA 2.

The updated guidelines and the data from this large study will be key to swaying insurers to cover BART, Meldrum noted.

Until NCCN published its new guidelines, Myriad had offered BART for free to patients who have "an especially strong personal and family history of breast and ovarian cancer." Those who didn't meet the company's criteria had to pay $700 for the test out of pocket, particularly since most insurers didn't consider the test medically necessary. Before NCCN's support for BART, when no insurers were covering it, around 5 percent of patients she counseled at the Yale Cancer Center agreed to have the additional diagnosis, Matloff recalled.

Myriad acknowledged, however, that it initiated its payment support program, through which many patients received free BART testing, in order to gather the clinical evidence needed to convince professional societies and insurers that certain large rearrangements in the BRCA gene are significantly associated with greater risk of breast and ovarian cancer. "Now with NCCN guidelines, we have the ammunition we need to approach … various insurers [about] the value and importance of the BART test," Meldrum said, adding that the company will end its program to offer BART for free to high-risk patients.

"At this point I think that program has achieved its objective, which is providing the data so that the appropriate decisions could be made about medical guidelines," he said. "We're very optimistic that with those guidelines and with the amount of clinical data Myriad has amassed … that insurance reimbursement should move along very smoothly."

However, it appears that Myriad's business strategy to market its Comprehensive BRACAnalysis separate from BART conflicts with NCCN's definition of a truly complete genetic test to gauge the risk of hereditary breast and ovarian cancer. NCCN emphasized in its recommendations "the need for comprehensive testing, which encompasses full BRCA1/2 sequencing and detection of large gene rearrangements."

While NCCN's recommendation for BART will help more patients gain coverage of such testing, "that's not the ultimate solution," according to Matloff. "The ultimate solution is that Myriad should include BART testing as part of what they're out there calling Comprehensive BRACAnalysis. Nothing is comprehensive unless it includes rearrangements and deletions. Period."

Revenue Expectations

Although BART has contributed to Myriad's revenues, it is unknown how much money such testing has brought in since 2006. The firm reports contributions from BART as part of its overall molecular diagnostic revenues. In its 2012 fiscal year ended June 30, Myriad reported approximately $472 million in revenues from molecular diagnostic testing, up 18 percent from the year-ago period. Around 82 percent of the company's test revenues come from the BRACAnalysis test.

Chief Financial Officer James Evans forecast that in 2013, the company's molecular diagnostics business should bring in between $525 million and $537 million in revenues. "If we were to get favorable reimbursement decisions for [BART and the company's Prolaris prostate cancer test], it would provide upside to these expectations," Capone noted, adding that Myriad may eventually break out revenue from BART separately if the test's uptake meets the company's expectations.

Analyst Jon Wood of the investment bank Jeffries & Company estimated in a note to investors that the BART assay represents around a $60 million annual revenue opportunity for Myriad. And since, according to company officials, Myriad holds patents related to BART that will provide intellectual property protection against competitors until 2025, the company may see a significant revenue contribution from BART for many years.

However, Myriad is currently embroiled in a high-profile lawsuit in which patients, healthcare providers, and researchers represented by the American Civil Liberties Union and the Public Patent Foundation are challenging the company's patent claims on methods of comparing isolated gene molecules and genomic DNA in the body, as well as claims on genomic DNA itself. The lawsuit, known formally as Association for Molecular Pathology et al. vs. the United States Patent and Trademark Office et al., alleges that the BRCA gene patents held by the University of Utah Research Foundation and exclusively licensed to Myriad "stifle research that could lead to cures and limit women's options regarding their medical care" (PGx Reporter 5/13/2009). The case is currently awaiting a decision by the Court of Appeals for the Federal Circuit.

Matloff – who is a plaintiff in AMP v. USPTO – believes that since the company's patent position makes it the sole provider of BRCA genetic testing for breast and ovarian cancer susceptibility, Myriad has a moral obligation to patients to provide BART within the Comprehensive BRACAnalysis price point.

Matloff believes that if Myriad's patent claims on BRCA gene mutations are invalidated by US courts, then other labs and test makers will offer a single BRCA test that assess the mutations in BRACAnalysis and the rearrangements in BART, at a competitive price. "And then anyone who knows anything will ditch Myriad and use this new company."

Price Points

Myriad, known for its aggressive marketing of BRACAnalysis, will likely do its part to educate physicians about the NCCN guidelines and the importance of BART in susceptibility testing for breast and ovarian cancer. Citing Myriad's marketing practices, many insurers have instituted prior authorization schemes for BRACAnalysis in order to make sure that only those patients whose family and medical history justify testing are receiving it.

"We certainly hope at one point in time to have everyone who is appropriate tested with the BART test," Meldrum said.

During the latest earnings call, Myriad officials said that the company's fiscal 2013 revenue expectations don't factor in any assumptions about test price increases. The last time Myriad increased its pricing was in 2010, when it raised the list prices for all tests in its portfolio by 7 percent.

Myriad may expect to get reimbursed for BART at levels close to its list price, since BRACAnalysis is reimbursed by insurers at an 8 percent and 9 percent discount to the $3,340 price tag.

Referring to its experience with BRACAnalysis, a company spokesperson suggested that those patients who meet insurers' coverage guidelines for genomic testing for hereditary breast and ovarian cancer will likely have to make a small out-of-pocket contribution for any diagnostics considered medically necessary. For example, the company estimated that although the list price for BRACAnalysis is $3,340, patients on average pay less than $100 out of pocket.

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