Test Reimbursement | Diaceutics

Test Reimbursement


This case study explains the global differences in test reimbursement and reveals that for some tests the laboratories own costs aren't even covered. It concludes that pharma must sometimes commit to subsidized testing but in doing so will create a win-win test launch for all stakeholders. It will help you understand:
  • The global differences in reimbursement
  • That test reimbursement is often inconsistent and, for some tests, may not even cover the laboratories' own costs
  • That pharma must sometimes commit to subsidized testing
Download this case study to learn more.

1: Case Summary

This case will help you understand:

The global differences in reimbursement.

That test reimbursement is often inconsistent and, for some tests, may not even cover the laboratories' own costs.

That pharma must sometimes commit to subsidized testing.

Key messages:

Reimbursement for testing is often inconsistent and, for some tests, may not even cover the laboratories' own costs.

In marketing companion diagnostics, it is crucial to research specific needs on a country-by-country basis.

Reimbursement of molecular tests in the US has shifted from the traditional ‘stacking code’ system to specific single codes.

Pharma must sometimes commit to subsidized testing—even if the subsidy is only temporary, it can create a 'win-win' diagnostic launch for all stakeholders.

Key actions:

Understand diagnostic funding issues in the relevant territories.

Become familiar with global reimbursement differences.

Develop a business case for the lab.

Plan for a temporary test subsidy.

2: Diagnostic Funding is Often a Bigger Issue than the Market will Admit

3: … As Lack of Funding can have an Obvious and Dramatic Impact on Test Adoption

  •  
    Market A: Test subsidized via donation to national oncology society
  •  
    Market B: Test reimbursed via standard local tech assessment channels
  •  
    Market C: Test indirectly subsidized via "real world study" which abruptly stopped
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4: It is Important to Understand the Different Systems Operating in Countries Outside the US

 

 

 

 FranceUKGermanyItalySpain
AuthorityMOH; HAS(CEPS and UNCAM)DH; NHS (primary care trusts)MOH; G-BA sickness funds / hosp.MOH; CUD DRG / regionsMOH; AEMPS hosp. budgets
Application byMfrMfrMfr / sickness fundsMfrMfr
Application submitted before testing startsYesYes, NICE approval might support fundingYesYes, test can be used only after official tenderYes, test paid from hospital budgets
Coverage; public/privatePublic + privatePublicPublic + private cross financing DRGs existsPublicPublic
 Regional fee variation MediumMediumLowHighLow, even decentralized
Average timeline after submission3 Mths3 Mths6 Mths (MAX)5 Mths official tender, 1-2 Mths5 Mths, tests can be included any time
Who controls the test purchaseHosp.Pathologist/lab managerDoctors / sick fundsHosp. tenderHosp. (tender)
Is Rx/Dx label relevantIrrelevantRelevantIrrelevantRelevantRelevant

 

Hosp. = Hospital
Mfr. = Manufacturer
Mths = Months
So What?

When marketing companion diagnostics, it is crucial to research specific needs on a country-by-country basis.

Commentary

The therapy should show a requirement for the test on the label. Be prepared to support clinical and cost-effectiveness data for the test and therapy. Consider aiding the funding of tests within the respective national health systems or equivalent, at least during the launch period.

5: Reimbursement of Molecular Tests in US Shifts to Specific Single Codes

Before January 1, 2013: Laboratories used molecular ‘stacking codes’ to get reimbursementOn January 1, 2013: Laboratories change to the new MoPath codes when billing for molecular diagnostic services

 

TEST NAMEOLD ‘Stack’ CODINGNEW CODE
BRAF Mutation Analysis83891, 83898 (x3), 83894 (x3), 83892 (x3), 83909 (x3), 83904 (x3), 8391281210
EML4-ALK Gene Fusion, PCR83891, 83900, 83901 (x2), 83909, 83904 (x4), 8391281401
So What?
Reimbursement of molecular tests in the US has shifted from the traditional 'Stacking Code' system to specific single codes.
Commentary

MoPath codes:
Tier 1 codes represent the majority of commonly performed single-analyte molecular tests.

Tier 2 codes represent procedures that are generally performed in lower volumes than Tier 1 procedures (e.g., when the incidence of the disease being tested is rare), and correspond to nine ascending levels of technical resources and interpretative work performed by the physician or other qualified health care professional.

6: In the US, Medicare Reimbursement is the Responsibility of CMS

 

 

So What?

Medicare reimbursement is the responsibility of Centers for Medicare & Medicaid Services (CMS), determined by the American Medical Association (AMA) and administered by  Medicare Administrative Contractors (MAC).

7: Reimbursement Differences are Seen from Country to Country Outside the US and the EU

 BrazilRussiaIndiaChinaJapan
 AuthorityMOHMOH; regional and local health authoritiesMOHFWMOH and MLSS; provincial health and pricing bureausMHLW
 Health insurance coverageYes, both public and privateYes, by law but limited in practiceLimited for 10% of populationYes, urban and rural, two separate systemsYes, universal
Nation­al reimbur­sement systemYesYesNoYesYes
ProcessEcono­mic asses­sment as part of processRegion specificOccasional reimbur­sement within specific govern­ment programsPublic tendering processDefined process with expert opinions and hearings (no HTA)
Centr­alized / Decent­ralized decisionDecent­ralizedDecent­ralizedDecent­ralizedDecent­ralized; hospitals decide as test is paid from their budgetCentra­lized
Coverage; public/privatePublic + PrivatePublicPublicPublicPublic
Regional variationHighHighHighHighMedium
Average timeline after submission     6-12 months

8: Example: KRAS Test Reimbursement in the Euro 5 in 2010

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So What?

The majority of the largest European markets (or the Euro 5 countries consisting of Spain, UK, France, Germany and Italy) received KRAS test reimbursement from their national health system, but in some countries (e.g., Italy, Spain and the UK), pharma will reimburse the KRAS test.

9: Pharma Must Sometimes Commit to Subsidized Testing

Roche funding BRAF testing for Zelboraf in EU – UK


UK: BRAF testing in metastatic melanoma

  • Offered since summer 2011, primarily by NHS plus selected private labs (e.g., Lab21).
  • Dx funded by Roche Products Ltd for 18 months, thereafter “pay for service” model applies.
  • Requesting labs not invoiced for samples from newly diagnosed patients with metastatic melanoma where BRAF status is required to guide future treatment.


Pfizer funding ALK testing for Xalkori in EU – France


France: BRAF testing in metastatic melanoma

  • Pfizer joined existing public-private partnership (PPP) between INCa and Pharma companies in 2010
  • While purpose of Pfizer contribution is stated broadly as “support for the establishment of genetic testing platforms”, joining the INCa PPP coincided with EU market preparation for Xalkori launch 

10: Pharma Subsidies, Even if Only Temporary, Can Create a 'Win-Win' Diagnostic Launch for All Stakeholders


The concept behind pharma subsidies for testing

Dx partners
  • Secures Dx revenues from day one after launch, regardless of reimbursement negotiations
  • Attracts multiple partners into market


Physicians
  • Enables fast, straightforward access to novel gold standard therapy options – “best choice for my patients without any hassle”

Payers
  • Reduces the bill for the early years and life cycle investment

Pharma
  • Ensures fast Rx uptake through fast Dx adoption (average of 6 months earlier revenues)
  • Enables positioning as the targeted therapy leader in the respective TA
  • Helps establish Rx as standard – once Rx is embedded as the gold standard treatment, public funding of the Dx as Rx enabler is more likely to follow
  • If well planned, it allows for an orderly, predictable Dx funding exit

Patients
  • Enables fast, straightforward access to novel gold standard therapy options, without avoidable delays in reimbursement setting

11: Key Messages

Key messages:

Reimbursement for testing is often inconsistent and, for some tests, may not even cover the laboratories' own costs.

In marketing companion diagnostics, it is crucial to research specific needs on a country-by-country basis.

Reimbursement of molecular tests shifts from the traditional ‘stacking code’ system to specific single codes.

Pharma must sometimes commit to subsidized testing. Even if the subsidy is only temporary, it can create a “win-win” Dx launch for all stakeholders.

Key actions:

Understand Dx funding issues in the relevant territories.

Become familiar with global reimbursement differences.

Develop a business case for the lab.

Plan for a temporary test subsidy.

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