Payer Research | Diaceutics

Payer Research

December 12th, 2018

Much is known about the process payers follow when it comes to coverage and reimbursement of new drugs on their formularies, including oncology drugs. But the expanding field of precision medicine and companion diagnostics have yielded a new field of market access and reimbursement, namely for the companion diagnostics directly linked to a therapy. Although some of these diagnostic tests are already used in clinical practice and are covered before they are considered companion diagnostics (“CDx”) linked to the utilization of a specific asset by identifying the right patient, their evaluation in conjunction with what is often an expensive treatment certainly changes the landscape.

To shed some light on that very process, Diaceutics conducted a qualitative research project, interviewing a number of key payer experts in the US – ranging from Medical Directors in Managed Care to Pharmacy Directors in Integrated Delivery Networks. Our research shows noteworthy results and provides explanations into the evaluation process of CDx for reimbursement and coverage purposes.

Interestingly, payers converge and concur on many aspects of CDx evaluation and their influence on the market. Payers are predominantly focused on the impact a diagnostic will have on clinical decision making, when it comes to developing management strategies for these tests. Questions such as “What is the impact on the treatment decision?” or “Is the test predictive or prognostic?” play a key role in their evaluation. “We feel the cost of a test for predictive use is a good investment. For prognostic use, we are especially concerned about expensive panels that may not improve overall outcomes.” IDN MD

Although diagnostic tests do not typically warrant high attention or priority due to relatively low cost burden overall, much more attention is put on molecular testing and especially, Next Generation Sequencing. The higher costs associated with these tests – similar to those of diagnostic imaging, forces payers to turn the spotlight more closely on these vs. other diagnostic tests. In the reimbursement of these more expensive diagnostic tests, a clear communication of clinical utility and impact on treatment and patient outcomes becomes paramount to a favorable coverage and reimbursement decision.

Currently, most payers do not require a test to be FDA approved to be covered.  We asked our respondents, “Will that trend continue, or are we going to see more restrictions on laboratory developed tests?” and “Is there a chance that this could change in the future, with more and more high-end NGS panels?” Management of these tests are still fairly limited, with most tests being only moderately evaluated and managed. “We rarely use prior authorization If a patient has NSCLC, ALK mutation testing is appropriate. What’s the point of trying to control this? PA’s cost us time and money.” MCO MD

As companion diagnostics coverage is a new area for payers to consider, it brings some challenges that need to be examined to ensure adequate coverage of these tests for patients. Complexity of molecular testing and the lack of internal expertise to properly evaluate these tests are particularly challenging. As a solution to this challenge, many companies are turning toward laboratory benefit managers to help them navigate the evolving diagnostic landscape. Is this the future in terms of diagnostics management?

For more information on diagnostics payer market research or if you are interested in the full report, please contact us at

Webinars & Podcasts

July 5th, 2019
Liquid Biopsy in NSCLC
August 9th, 2018
Podcast: Oncology Patient Research
Why do we need to talk biomarkers with patients? Senior Director of Market Research at Diaceutics, Marianne Fillion, recently spearheaded an effort to gather insights directly from oncology patients to get an understanding of what they know about ...
View all

Expert Insights

April 19th, 2018
The CMS National Coverage Decision on NGS
I. Introduction On March 16, 2018, the Centers for Medicare and Medicaid Services (CMS) finalized a National Coverage Determination (NCD) that cove...
January 19th, 2018
What does the EU IVD Regulation mean for companion diagnostics and LDTs?
Dave Smart, PhD, Director at Diaceutics, discusses the introduction of the EU IVD Regulation. While it is considered a necessary step, the Regulati...
View all expert insights

Competitive Benchmarking Reports

March 16th, 2018
PM Readiness Report 2018 Summary
March 14th, 2017
Pharma Readiness for Diagnostic Integration 2017
View all reports


June 25th, 2019
FLT3 testing in relapsed Acute Myeloid Leukemia setting is becoming increasingly common, but laboratory turnaround times (TAT) may be a barrier to treatment with second generation FLT3 inhibitors
The treatment landscape in AML has developed at an astonishing pace in the last 3 years, with 5 therapies being approved by the FDA. FLT3 inhibitors gilteritinib (Gil) and quizartinib (Quiz) present an unprecedented opportunity for improved surviv...
May 23rd, 2019
Diaceutics reviews the ongoing debate on diagnostics reform legislation
Thought leaders at Diaceutics recently authored a peer-reviewed article that covers the ongoing national debate over diagnostics reform legislation in the United States. The article is now available online ahead of print in the Journal of Molecula...
View all publications