No Perfect Solutions for Innovators Facing Reimbursement Challenges

PMC organized a panel discussion of experts to discuss the coverage, coding and reimbursement challenges facing innovators of personalized medicine diagnostic tests at the Biotechnology Industry Organization’s International Convention last week.

The panel built on a PMC-commissioned study released last December written by David Parker, Vice President, Boston Healthcare Associates.  He discussed the multi-faceted nature of diagnostics reimbursement and how the status quo reduces patient access to innovative tests.

The panel also included Kristin Pothier, Partner, Health Advances, and author of a study for BIO looking at the impact and feasibility of possible reforms to the reimbursement system and ultimately concluding that there is no perfect solution but that a combination approach to reform is needed to improve patient access.

Offering their perspectives on challenges facing diagnostics innovators were Steve Phillips, Director, Health Policy, Johnson & Johnson and Scott Allocco, President, Biomarker Strategies, co-chairs of PMC’s reimbursement task force.  Phillips agreed that a comprehensive approach to reforming reimbursement is needed for diagnostics and was comfortable working within the current environment.  Allocco suggested that a more radical change is needed to ensure that investors receive adequate returns on their investment. 

As the panelists discussed, pursuing legislative and regulatory solutions to coverage, coding and reimbursement problems is important to moving personalized medicine forward. But PMC is also seeking opportunities to solve problems by engaging with policymakers outside of government. For example, several panelists described how the American Medical Association’s Current Procedural Terminology (CPT®) coding system hampers reimbursement of molecular diagnostics and shared their concerns that the proposed additions of new molecular diagnostics codes are not specific enough to ensure that tests reimbursed at full value.  Although a new set of codes will be rolled out in 2012, I encourage those interested in this issue to join me at the AMA’s Molecular Pathology Workgroup meeting in Chicago on July 20.

One audience participant asked whether the U.S. can draw from best practices in coding, coverage, evidence and reimbursement from other countries.  PMC will be examining this topic in the coming months and will release a paper looking at challenges diagnostics companies face in the European Union this fall.  As long as personalized medicine is disadvantaged by the current system, PMC will advocate for changes to it.