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Faced With Declining Test Orders, Foundation Medicine Vows to Push Doctor Education, Reimbursement

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NEW YORK (GenomeWeb) – Foundation Medicine plans to counter a decrease in its clinical testing business with initiatives to educate doctors, help them utilize test results for treatment, and by pushing for reimbursement, the firm's management said this week.

Earlier this week, the company reported a 10 percent sequential drop in the number of clinical tests it conducted in the third quarter and lowered the number of tests expected for 2015, sending its stock down.

Foundation Medicine delivered 8,012 FoundationOne and FoundationeOne Heme tests in the third quarter, "which certainly fell short of our expectations," said CEO Michael Pellini during a conference call to discuss the firm's earnings.

While the overall number of oncologists who ordered its tests in the third quarter did not change, he said, the frequency with which they reordered fell by about 7 percent.

Sixty-four percent of ordering physicians were community oncologists rather than academic medical centers, Pellini said, which the company sees as a positive development, but which also represents a challenge because these doctors tend to be less willing to order the tests, especially when they are not reimbursed by insurance.

Competition from other tests providers "certainly has an impact in certain areas," Pellini said, and the company will continue to emphasize the value of its tissue-based comprehensive profiles over hotspot, small panel, or liquid biopsy assays.

To stop the downward trend, Foundation Medicine plans to focus even more on educating oncologists about what differentiates its tests from others and how its test results can help them take better care of their patients.

Several thousand oncologists are already using the company's tests, but many reserve them for the sickest patients only. "Our challenge is to convert more of our clients to [become] repeat, consistent customers, including the use of our tests earlier in the course of treatment," Pellini said.

To do that, Foundation plans to target physicians with publications, direct sales, and marketing efforts, through its collaboration with Genentech, and by making greater use of its physician programs and decision support tools, he said.

These include its FoundationICE Interactive Cancer Explorer physician portal; its FoundationACCESS billing and reimbursement service; the GeneKit portal for pathologists; the PatientMatch database, which has about 8,000 patient records now; and the recently launched Precision Medicine Exchange Consortium (PMEC) to create clinical trial networks.

"These programs are well underway and will continue to develop, and we believe they will be impactful in driving better utilization of our clinical products and ultimately benefitting patients," Pellini said.

In addition, the company will broaden its efforts to gain reimbursement for its tests. While some private payers are covering the tests for certain indications — for example, United Healthcare recently issued a medical policy for stage IV non-small lung cancer — Medicare has been less favorable to the company.  

"Reimbursement challenges are inherent in this industry and not unique to Foundation Medicine," Pellini said, and are one reason why Foundation Medicine has not built its entire business on clinical testing but also has significant revenues from pharmaceutical collaborations.

Last month, National Government Services, Foundation Medicine's Medicare Administrative Contractor (MAC), issued a draft local coverage determination (LCD) for the use of genomic sequencing panels in patients with non-small cell lung cancer (NSCLC) that Foundation Medicine took issue with.

In a statement on its website, the company said that "the policy, as written, threatens to undermine uniform access to high-quality care for Medicare patients with Stage IIb/IV NSCLC."

In particular, Foundation criticized that the draft LCD included no quality standards for next-generation sequencing, in contrast to Palmetto GBA's LCD and United Healthcare's recent medical policy; that it disregards parts of the National Comprehensive Cancer Network (NCCN) guidelines; and that it does not allow for broad molecular profiling to identify rare driver mutations, which will limit patient access to emerging therapies.

"Their decision to stray from the MolDx [Palmetto] framework was a surprise, and inconsistent with the direction we were given, and also outside of our direct control," Pellini said during the call.

The company is actively contributing in the open-comment period, which ends in mid-December before the LCD becomes final, he said.

"At this point, we continue to collaborate with academic medical centers in the region to develop a final LCD that includes a comprehensive approach, as well as pricing which we think is reflective of the innovation in FoundationOne, and frankly, the value of the information that we deliver to patients and providers," Pellini said.

Also, Foundation has developed collaborations with payers to demonstrate the clinical and economic utility of its tests, and the PMEC initiative is "designed to help us accelerate access to outcomes data that provides further evidence of the clinical and economic impact of our approach," Pellini said.

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