INDUSTRY NEWS
The National Heritage Insurance Co., the contractor that administers Medicare programs in California, agreed to provide reimbursement coverage for the Oncotype DX test by Genomic Health Inc. (Redwood City, CA). This test quantifies the likelihood of breast cancer recurrence and predicts chemotherapy response for early-stage breast cancer patients. The test is performed at the company’s clinical reference laboratory.
In their efforts to establish a coverage policy, Genomic Health officials acknowledged that the support of clinicians was a key factor in the Oncotype test obtaining Medicare reimbursement coverage.
“When all is said and done in terms of the final decision by Medicare to provide coverage, the most important role was probably played by the oncology community in support of the test,” says Randy Scott, PhD, chairman and chief executive officer at Genomic Health. “While our team worked very hard to provide details and information to Medicare, at the end of the day, it was really the oncology community that lobbied Medicare very hard with the belief that this test is an important new tool for their patients and their decision making, and it was a necessary part of care.”
Some industry analysts believe that the decision by Medicare to provide reimbursement for the Oncotype test is welcome news for the IVD industry. In addition, this decision could encourage other IVD manufacturers to become more involved in the area of personalized medicine and start developing their own pharmacogenomic tests.
“This product will help to persuade other IVD companies that may have been either sitting on the fence or waiting for the window of opportunity for their tests to be reimbursed to now step forward,” says Michael Murphy, president and chief executive officer at Gentris Corp. (Research Triangle Park, NC). “Particularly in the area of oncology, because there’s always some skepticism about whether expression analysis can be used in a definitive way to identify the correct patient or the right drug for a particular patient. This will also help some of our clients appreciate the benefits of having a cancer test associated with a drug.”
However, other analysts are not convinced that this reimbursement decision will have any significant effect on the IVD industry.
“I do not see a major impact on IVD manufacturers,” says Emily Winn-Deen, vice president for strategic planning and business development at Cepheid (Sunnyvale, CA). “The field of molecular diagnostics began with homebrew assays developed and run in CLIA-certified labs, and this test falls into that category. Such homebrew tests have usually been reimbursed using a set of generic CPT codes representing various steps in the assay process. If anything, obtaining this coverage decision does give the test more apparent validity, as such decisions are based on an in-depth review of the data supporting the clinical utility of the test as well as its analytical performance.”
Officials at the Centers for Medicare and Medicaid Services (CMS; Baltimore, MD) said that they have done nothing nationally in the coverage arena for the Oncotype test.
“While we have had discussions within the agency as to whether a national coverage determination is in fact an appropriate next step, there has been no decision as to whether we should or should not,” says Steve Phurrough, MD, director of the coverage and analysis group at CMS. “We’d first like to see all of the regulatory issues regarding homebrew determination resolved. There have also been some ongoing issues about payment, and some of those we’d like to see resolved prior to making this determination as to whether this test needs a national decision or not. I don’t expect to have an answer to that in the next days or weeks, perhaps more in the months timeframe.”
Genomic Health did receive a letter from FDA regarding its Oncotype test. The letter invited the company to meet with FDA to discuss the nature and appropriate regulatory status of the company’s technology and the least burdensome ways that the company may fulfill any FDA premarket review requirements that may apply.
