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Payer Research

12 December, 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 [email protected].

About Diaceutics

At Diaceutics we believe that every patient should get the precision medicine they deserve. We are a data analytics and end-to-end services provider enabled by DXRX - the world’s first Network solution for the development and commercialization of precision medicine diagnostics. 

Diaceutics has worked on every precision medicine brought to market and provides services to 36 of the world’s leading pharmaceutical companies. We have built the world’s largest repository of diagnostic testing data with a growing network of 2500 labs in 51 countries.

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