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Foundation Medicine Reimbursement Progress Marked by Google, Priority Health Deals; NCCN Guidelines

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NEW YORK (GenomeWeb) – Foundation Medicine said this week that employees of Google will have covered access to its next-generation sequencing-based tumor profiling tests beginning Jan. 1, 2015.

The announcement is one facet of Foundation Medicine's approach to gaining acceptance among payors, President and CEO Michael Pellini said during a conference call discussing the firm's third quarter results. Also in the third quarter, Priority Health became the first insurance company to cover the FoundationOne and FoundationOne Heme tests, and earlier this week the National Comprehensive Cancer Network issued updated guidelines for non-small cell lung cancer that endorsed broad genomic tumor profiling, Pellini said.

He noted that the company is growing both its clinical business as well as its pharmaceutical partnerships, reporting 6,428 clinical tests in the third quarter and 1,465 tests for its pharmaceutical customers. For Foundation's complete Q3 financial results, see GenomeWeb Daily News story.

In particular, the company is furthering its relationships with pharmaceutical companies, providing services that are "well diversified across preclinical research, prospective trials, clinical development, regulatory support, and companion diagnostics," COO Steven Kafka said on the call. Foundation Medicine now has 20 partnerships and is supporting over 100 clinical trials in 2014, he added.

Reimbursement

Reimbursement has been a major hurdle in the clinical sequencing and molecular diagnostic space as whole. But on the call, management said that they have continued to make progress on this front with the average per-test reimbursement holding steady at $3,600.

With regard to the Google announcement, Pellini said that Google employees and their family who are undergoing cancer treatment would have coverage for FoundationOne and FoundationOne Heme under one of Google's health plans that is administered by Anthem Blue Cross Blue Shield. Coverage will be effective as of Jan. 1, 2015.

In addition, Pellini said that this is the second company that has decided to cover Foundation's tests. The other was a "multi-billion dollar company, but we were not able to disclose it," he said.

Pellini said that these deals should be looked at in the bigger picture and that it is just one facet of the company's strategy to obtain reimbursement. "Developing relationships directly with multinational companies provide an opportunity to not only get the test covered to their employees, but also perhaps helps us establish additional relationships with health plan administrators," he said.

Priority Health's positive coverage decision was another important step on the reimbursement front. Pellini described the payor market as a bell-shaped curve with early adopters being at the front end. "We're still in the front end of that curve," he said, but "as we move forward into 2015 and 2016, we think we'll move toward the center part of that curve, which goes beyond the early adopters." He added that while Priority Health is a regional Midwestern payor, it is "looked at as a thought leader in how they approach molecular tests."

While the decision by Priority Health is important, Pellini noted that reimbursement progress shouldn't be looked at solely from the lens of that one payor's decision. "When you couple Priority Health with NCCN guidelines that have recently been updated, with a handful of academic medical centers really stressing the importance of comprehensive genomic profiling, that tells a better story of the progress that we're making," he said.

Recently, the NCCN updated its clinical practice guidelines in oncology for non-small cell lung cancer. In the guidelines, the panel said it endorsed broad molecular profiling to identify "rare driver mutations for which effective drugs may already be available, or to appropriately counsel patients regarding the availability of clinical trials." The guidelines went on to say: "Broad molecular profiling is a key component of the improvement of care of patients with NSCLC."

Pellini said that this endorsement of comprehensive genomic profiling is a "positive development" for the company and "may be helpful in our ongoing discussions with payors."

One area in which Foundation is still struggling is in obtaining reimbursement from Medicare. Similar to the previous quarter, although Foundation submitted claims to Medicare, it has not yet received payment for any of those claims. "While we are in the process of appealing those claims, again, we do have very conservative expectations with respect to any backlog revenue," Jason Ryan, senior vice president of finance, said on the call.

Moving forward, Pellini cited Foundation Medicine's recent deal with Cancer Outcomes Tracking and Analysis as another way the company will build the case for reimbursement by generating economic data.

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