Ensuring a Personalized Future through Diagnostics Policies

In a time of rapidly rising healthcare costs, personalized medicine offers a more efficient approach to prevention, diagnosis and treatment.

However, special considerations and thoughtful policies that acknowledge the emerging and varied technology (and challenging science) at play are needed in order to ensure access to personalized diagnostics and treatments, while also encouraging further investment and development of technologies. Just as personalized medicine is moving us away from a one-size-fits-all approach to healthcare, we must too move away from one-size-fits-all approaches to reimbursement.

The Personalized Medicine Coalition recently released “The Future of Coverage and Payment for Personalized Medicine Diagnostics.” The white paper takes a critical look at the policies of the Centers for Medicare and Medicaid Services, which in turn inform the decision making process for payers. Three specific challenges to the further implementation of personalized medicine diagnostics are identified:

• Reimbursement levels that ensure access while also encouraging development
• Inconsistent standards for evaluating genomic tests
• A lack of incentives for genomic medicine

As we continue our journey in the post-ACA healthcare landscape, the need for objective, reliable and clearly defined standards for evaluation and reimbursement continue to grow. Uncertainty – especially in the form of payment – does not inspire investment or fuel growth through R&D.

Key SGR Fix Brings Relief to Diagnostics Industry

On April 1, the diagnostics industry let out a collective sigh of relief as President Obama signed into law HR 4302. Officially known as the Protecting Access to Medicare Act of 2014, many refer to the law as “Doc Fix” or “SGR fix”, focusing on the delay, yet again, of the 24 percent physician pay cut as a part of Medicare’s sustainable growth rate (SGR) formula.

However, my attention, along with that of the diagnostics industry, focused on the provisions in the law that protect clinical diagnostics from unpredictable repricing (subscription required) under the Centers for Medicare and Medicaid Services (CMS) Clinical Lab Fee Schedule (CLFS).

The passage of this law showcases the need and value of the industry to unite in highlighting policies that, though unintended, challenge innovators by creating an uncertain reimbursement environment. Predictable reimbursement policies encourage exploration and innovation within the diagnostics community, improving health care through advances in diagnosis and beyond.

This law acknowledges the transformative scientific advancements the industry has achieved in recent years, catching our policies up with our technologies.

Many questions remain as we look at the implementation of this law, and as such we remain committed to convening the personalized medicine community to work in collaboration with CMS.

Collaboration Key to Improved Reimbursement Policies for Personalized Medicine

Significant reimbursement challenges to personalized medicine began in 2012 when the Centers for Medicare and Medicaid Services (CMS) changed payments for diagnostics from a stack of different types of codes describing different parts of lab testing to a unique code for a type of test.

The Personalized Medicine Coalition (PMC) has engaged with CMS on reimbursement issues for personalized therapies and companion diagnostics in a variety of ways, most recently when Patrick Conway, M.D., Deputy Administrator for Innovation and Quality and Chief Medical Officer, CMS, delivered the keynote address at the Tenth Annual State of Personalized Medicine Luncheon.

Dr. Conway outlined his perspective on the state of personalized medicine and where it is headed, noting that we are in an era in which the power of genetics is driving innovation, informing treatments and improving patient outcomes.

As Dr. Conway noted, diagnostics are a challenge as a new market, and CMS is working with FDA to streamline the process further. We want and need diagnostics that enable physicians’ to tailor therapies for individual patients and influence decision making, all resulting in better health outcomes and improved patient care.

Dr. Conway emphasized innovation, noting that we need a system that values innovation and pays for it appropriately. We should cover and pay for technology that may have greater costs in the short-term, but which will result in long-term savings and improved outcomes.

Yet, innovators are facing significant challenges stemming from CMS policies, through the unintended consequences related to coding, in particular. PMC is focused on working with CMS to ease the pressure on innovators, and identifying opportunities to make sure this does not happen again.

A key theme of Dr. Conway’s talk was that of collaboration. PMC will continue to facilitate engagement with CMS, taking up Dr. Conway on his open door policy to ensure that future policies encourage innovation and support continued developments in personalized medicine.

Dr. Conway’s presentation is available at the PMC website.

Examining the Relationship Between Payment Policies and Personalized Medicine

In an era of increased focus on containing rising healthcare costs, personalized medicine represents an important solution in addressing these concerns, while improving the quality of patient care. In order to ensure that these important advances continue, it is essential to ensure payment policy supports personalized medicine.

Much of PMC’s policy work in the coming year will focus on both the challenges and opportunities in Medicare payment policy. For several years, ongoing efforts to reduce reimbursement for advanced diagnostic tests have been at the leading edge of this work. Recent proposals to cut reimbursement for diagnostics and drugs in Medicare Part B underscore the importance of our continued focus in this area.

Building on the success of our reimbursement issues brief from 2010, we will soon publish an updated brief outlining the difficulties facing personalized medicine in coverage and reimbursement decisions. This paper will cover coding changes as well as the challenges that CMS has placed on innovators. It will also outline evidence issues and how the field might consider tackling them.

In addition, PMC will address how emerging, alternative payment models (such as medical homes, accountable care organizations, and pathway- or episode-based payment) also will have a significant impact on development and adoption of personalized medicine. While some of these approaches appear to hold promise, we must pay attention to the details to ensure that they are designed in ways that allow physicians to tailor care based on an individual’s genetics and other factors, and that support adoption of novel targeted therapies.

PMC already has begun engaging on this important set of issues. Based on our policy principles for deficit reduction, we are developing additional messaging and conducting further analysis to engage Centers for Medicare and Medicaid Services (CMS) throughout the year. Our next opportunity will be on April 10 when we will respond to a request for comments on Specialty Practitioner Payment Models. In our response, we will encourage CMS to see targeting drugs with diagnostic tools as a way to increase the quality of patient care and to ensure that policies encourage this direction.

As we engage on a growing range of important policy issues, it is timely that Dr. Patrick Conway, the acting director of the Center for Medicare and Medicaid Innovation (CMMI), will be joining us this week at our Tenth Annual State of Personalized Medicine Luncheon. CMMI has responsibility for testing and implementing alternative payment models at CMS. We look forward to hearing from Dr. Conway as he shares his vision of personalized medicine, CMS’ perspective of innovation and quality health care reform, and answers questions about developing payment policies.

We recognize that personalized medicine depends on our ability to pay for both diagnostic and therapeutic products, and to that end, the PMC is focused on advocating for public policies that support personalized medicine’s development through scientific, regulatory, and reimbursement-related activities. I invite you to join PMC at the Tenth Annual State of Personalized Medicine Luncheon Address at the National Press Club in Washington, D.C., on March 13.

2013: A Year of Innovation, Inspiration

As we look forward to 2014, we engage in the time-honored tradition of reflecting on the year of activities and progress as we bid 2013 farewell.

For personalized medicine, it was another year with big advances, and big questions. The following captures highlights from The Age of Personalized Medicine Blog for 2013.

We started the year with a call to action from Amy Miller, PMC vice president, public policy, about the power of personalized medicine, the need for “accurate and actionable” data, and for a shift in traditional healthcare models. As Amy noted:

…The power of personalized medicine lies not only in treatment, but prevention. The best scenario for personalized medicine in action will come when patients are able to see not only the implications of their genetic dispositions, but also are motivated and empowered to use that information in preventative care.

In May, personalized medicine took the international spotlight as Angelina Jolie shared with the world her genetic prognosis and personal decision to pursue a course of preventative care. The high-profile case inspired much discussion of the value of personalized medicine, as well as the need for access to diagnostic testing for all:

Ms. Jolie’s contribution demonstrates that without patients who are educated, empowered to get tested and to act, the progress and innovation could be for naught. We need to make sure that patients are knowledgeable enough to pursue personalized options for their own health but also so that they are motivated to support policies that foster continued progress in this area.

Kristin Ciriello Pothier, Diagnostics and Life Science Practice lead at Health Advances, shared key take-aways from the PMC/BIO Solutions Summit panel she moderated on “Evidentiary Standards and Data Requirements for Payer Coverage.”

Ms. Ciriello Pothier examined the challenges facing the personalized medicine diagnostics industry and summarized her panel’s conclusions:

First, panelists agreed that there must be more education for all stakeholders so that each stakeholder can actually evaluate novel products appropriately, a key finding echoed throughout the day. Second, the emphasis on outcomes must shift from only clinical outcomes to clinical outcomes and quality of life for patients. Finally, all panelists agreed the ideal situation is open, trusting lines of communication and split of the responsibility according to expertise.

William Chin, M.D., identified research, collaboration, and innovation as critical components to advancing personalized medicine, while Stephen Eck, M.D., Ph.D., cited the need for funding for basic research, diagnostics testing research, increased healthcare provider education, and reimbursement for diagnostic testing as key.

At the mid-point of 2013, pressures to reduce federal spending elevated the need for policy that will support biomedical research and innovation. PMC responded to these concerns through comments submitted to the Centers for Medicare and Medicaid Services (CMS) regarding the charge on regional Medicare Administrative Contractors (MACs) to set new prices for molecular diagnostic test reimbursement through a process called “gapfilling”:

The Personalized Medicine Coalition (PMC) submitted comments to CMS on the Gapfill Payment Amounts and CLFS, iterating the concerns of PMC members that insufficient payment amounts threaten the sustainability of the laboratory industry and continued investment in the developing field of personalized medicine. As a consequence, this policy has the potential to stifle innovation and progress in healthcare and possibly eliminate the potential for lowering overall costs through the elimination of unnecessary and or ineffective treatments.

In 2013, PMC also released a set of policy principles key to advancing personalized medicine in a deficit-reduction environment. Debuted at a Capitol Hill Briefing, these principles lay the groundwork for consensus-building around key issues to ensure that efforts to contain rising healthcare costs do not undermine continued progress in personalized medicine and protect innovation, the physician-patient relationship, patient values, and choice.

The reality of personalized continues to be realized with patient triumph stories bringing new advances in science, technology, and research to life:

The promise of personalized medicine is very real. Personalized medicine is not an abstract concept for the future of medicine. It is here, it is now, and the true promise has been realized in the lives of Kellie and Stephanie, and the precious days, weeks, months, and years they have taken back from their disease.

I encourage you to read more about Kellie and Stephanie, and to draw inspiration from their strength.

At the 9th Annual Personalized Medicine Conference in November, it was an honor to present Kathy Giusti, founder and CEO of the Multiple Myeloma Research Foundation (MMRF) with the 2013 Leadership Award. Ms. Giusti’s story of ingenuity in the face of adversity has led to a redefinition of the role of patient advocacy organizations in research:

Clinically, MMRF has funded research and paved the way for FDA approval for six multiple myeloma treatments in 10 years, and doubled the lifespan for many patients. Today in her remarks, Kathy shared that her daughter, who was just one year old when Kathy received her myeloma diagnosis, is now a 19-year-old college student with a younger brother. Incredible results.

2013 was a year of progress and inspiration. We look forward to the new year ahead and personalized medicine advances on the horizon, bringing new treatments and improved outcomes to patients.

Examining Policy That Will Support Innovation, Personalized Medicine

Policymakers are facing pressure to control federal spending and lower the national debt, with healthcare costs as a focal point of debate to address this pressure. The path that policymakers take will have a significant impact on biomedical progress, the role of U.S. companies as global leaders in life science innovation, and the quality of patient care.

One example of how policy can impact healthcare innovation is playing out right now. The Centers for Medicare and Medicaid Services (CMS) 2013 Gapfill Payment Amounts and Clinical Laboratory Fees Schedule (CLFS) charged regional Medicare Administrative Contractors (MACs) to set new prices for molecular diagnostic test reimbursement through a process called “gapfilling.” This process has resulted in much lower payment amounts for molecular diagnostics which has had unintended consequences.  Some innovators have reported that drafting cooperation agreements to bring new targeted therapies to market has been stifled. Some clinical labs have reported that they might not be able to offer some tests since new payment rates do not cover the costs of running them, which may negatively impact patient access to diagnostic tests and appropriate treatments.

The Personalized Medicine Coalition (PMC) submitted comments to CMS on the Gapfill Payment Amounts and CLFS, iterating the concerns of PMC members that insufficient payment amounts threaten the sustainability of the laboratory industry and continued investment in the developing field of personalized medicine. As a consequence, this policy has the potential to stifle innovation and progress in healthcare and possibly eliminate the potential for lowering overall costs through the elimination of unnecessary and or ineffective treatments.

With dramatic advances in science, it has become more important than ever to ensure that policymakers understand the value of biomedical innovation and support pathways that encourage continued advancement and yet we see deficit reduction pressures regularly resurfacing in new healthcare policies.

To that end, PMC is hosting a Congressional Briefing on Monday, July 22. We will examine the role personalized medicine plays in healthcare and how our public policy can drive progress and innovation. At the briefing, PMC will unveil policy principles to ensure that proposed cost-containment efforts do not undermine personalized medicine, but instead, protect innovation, the physician-patient relationship, and patient values and choice. We also will hear the diverse perspectives on innovation from lung cancer survivor and patient advocate, Stephanie Haney; drug developer, Dr. Stephen Eck; diagnostic developer, Patrick Balthrop; and physician, Dr. Amy Abernethy.

At PMC, we look forward to our continued collaboration with the stakeholder community to identify opportunities for public policy to drive progress and innovation.

Balancing the Need for Guidance, Communications, and Education to Support Innovation in Personalized Medicine Diagnostics

Recently, I had the opportunity to moderate a thought-provoking panel at the PMC/BIO Solutions Summit. The summit brought together key stakeholders to discuss solutions to barriers in the development of innovative personalized medicine diagnostics. A big question for those developing potentially game-changing technologies in an increasingly cost conscious environment is the need for “Evidentiary Standards and Data Requirements for Payer Coverage.”

Determining the data requirements for coverage is becoming an increasingly frustrating issue for diagnostics manufacturers, which face rising demands for evidence but continued lack of clarity about payer standards for evidence-based decision-making, leading many to ask the question, “Why can’t payers just tell us what their standards are?” Complicating the picture is that diagnostics can come to market via different pathways with different levels of supporting evidence (e.g., companion diagnostics reviewed by FDA for clinical validity with the companion therapeutic and tests developed, validated, and introduced to the market by laboratories).

The panelists – who represented leaders from industry, non-profit advocacy, and government working to create solutions for some of these market access barriers – noted a couple of issues at play. One is that having a payer “pick list” or hard criteria for coverage removes the flexibility that is so often needed in these gray-area coverage decisions. The second is that given the volume of products they are evaluating, most payers don’t have the bandwidth to be experts in the nuances of the trial design for every technology. Third is that across all stakeholders, there is a wide range of knowledge on innovative products and personalized medicine and that basic education for the majority of stakeholders to better understand these products is lacking.

Several lessons and next steps came out of this discussion. First, panelists agreed that there must be more education for all stakeholders so that each stakeholder can actually evaluate novel products appropriately, a key finding echoed throughout the day. Second, the emphasis on outcomes must shift from only clinical outcomes to clinical outcomes and quality of life for patients. Finally, all panelists agreed the ideal situation is open, trusting lines of communication and split of the responsibility according to expertise.

At the end of the day, it may be incumbent on the molecular diagnostic community to shape the paradigm for evidence requirements so that payers can act as enablers, rather than watchdogs.

The 8th Annual Personalized Medicine Conference

On November 28th and 29th, Partners HealthCare, Harvard Medical School, and Harvard Business School will host the 8th Annual Personalized Medicine Conference in Boston. As has been customary since the conference began, the meeting is also the venue at which the Personalized Medicine Coalition presents its leadership award. This year, it will go to Randy Scott, Ph.D., a founder and former CEO of Genomic Health, Inc.

During the past seven years, we have seen many changes in personalized medicine. Much of the excitement about personalized medicine continues to be driven by the ever decreasing cost of sequencing DNA and RNA. Whole genome sequencing, estimated to cost a billion dollars or more at the beginning of the century has gone down to a few thousand dollars, and the so called $1,000 genome is not too far behind. All in all, the 20,000 or so genes of the human genome only add up to less than two percent of the genome. If the sequencing cost is directly proportional to the size of DNA that is being sequenced, the cost of sequencing all genes should one day be no more $100. We are not quite there yet, but the rapid decline in costs is fueling the evolution of personalized medicine.

There is also a rapid evolution in our understanding of the genes and genomes of many organisms, including humans. Understanding how a normal gene functions and how changes in it (mutations) alter the cellular function is increasing at a rapid pace. As a result, sequencing whole genomes, whole exomes (all of the coding portions of genes), and subsets of genes for medical purposes is becoming ever more common. The fruits of all of these exciting developments are evident in many specialties of medicine but especially in prenatal testing, diagnosis of newborn and pediatric disorders, and cancer.

This year’s conference will highlight the genomic advances in science and medicine, and how they are being applied to diagnose and treat many disorders. The rapid development of technology also raises many questions about the clinical utility of these advances; about the policy and regulatory issues around what, when, who, and how to regulate; and about how the costs are reimbursed.

Personalized medicine is not just an American issue. Many nations of the world are developing strategies to implement personalized medicine in their own countries, and a number of those efforts will be featured at the conference. Professor Richard Hamermesh of the Harvard Business School and Norman Selby of Perseus LLC developed a business case on companion diagnostics that promises to be thought provoking and, based on previous years’ experience, a highlight of the conference.

Please join us at the end of November and participate in the dialog about how personalized medicine is evolving and what its implications are for your health and that of all peoples of the world.

Register online at www.personalizedmedicineconference.org. Follow the conversation online at @HarvardPMConf and #PMConf.

Congress Recognizes Value of Personalized Medicine Approaches in FDA User Fee Authorization Legislation

Regulatory uncertainty has long been a concern for personalized medicine innovators and the Turning the Tide Against Cancer conference earlier this month reinforced the need for regulatory changes to facilitate personalized medicine.  While that uncertainty is not gone, the Food and Drug Administration (FDA) user fee reauthorization legislation, which passed its last major hurdle through Congress yesterday, contains personalized medicine-relevant policy changes that will enhance the regulatory process for new products.

We applaud Congress for passing this legislation and commend the measures it takes to smooth the way for more personalized medicine products.  Provisions directly related to personalized medicine include:

• The development of FDA’s capacity to review submissions involving pharmacogenomics and biomarkers by integrating and training staff with pharmacogenomics and biomarker expertise into the product review process.
• The creation of an expedited approval process for “breakthrough therapies” — drugs that are both developed using biomarkers and used to treat serious or life-threatening ailments.
• A requirement that the FDA notify Congress two months in advance of the Agency’s planned release of any guidance or draft guidance document related to the regulation of laboratory-developed tests.

We look forward to continuing to work with FDA to improve the complex regulatory process for personalized medicine and accelerate adoption new personalized treatments.

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.