July 2018—The March 16 announcement of a new Centers for Medicare and Medicaid Services coverage policy for next-generation-sequencing–based diagnostic lab tests for patients with advanced cancer did not appear out of the blue, since a draft policy was issued last fall. But the revised final national coverage determination broke away from the original draft significantly.
The new, more liberal national coverage policy of the NCD proactively lays out the reimbursement welcome mat for NGS testing, industry analysts say. “Now there is a defined FDA pathway to get an NGS test to the market and get reimbursement for Medicare patients,” says Jeff Schreier, MBA, senior director of the marketing team at Diaceutics, a company that works with pharmaceutical firms on diagnostic testing and data analytics. “Before this NCD, there was none.”
The NCD makes all NGS testing (including leukemia/lymphoma, germline, liquid biopsy tests, and more) for patients with advanced-stage cancer eligible for pathways to FDA approval and CMS coverage. It drops a requirement that the tests be backed by evidence development, and it expands the eligible patient population to patients with stage III and stage IV advanced cancer, as well as those having recurrent, relapsed, refractory, or metastatic cancer.
Foundation Medicine and Thermo Fisher’s comprehensive tumor panels (FoundationOne CDx and Oncomine Dx Target Test) will be covered immediately. So will other FDA-approved or FDA-cleared companion in vitro diagnostics when the test has an FDA-approved or FDA-cleared indication for use in a patient’s cancer. Other tests using NGS with advanced cancer will continue to have local coverage determinations made by the local Medicare administrative contractors. But the full implications of the new policy for laboratory-developed tests, medical research, payer policies, and patient care continue to be subjects for debate.
It will definitely be easier to gain approval for NGS tests. “It has provided more predictability, but some questions remain about the overall impact on the use of NGS tumor panels moving forward,” says Charles Mathews, a principal with ClearView Healthcare Partners, a worldwide health care strategy consulting firm. Still, some old assumptions will be jettisoned. His job has often involved helping people identify clinical utility evidence they can develop to secure reimbursement, “and the NCD has flipped the script a bit,” he says. “Now it says, if you get FDA approval, you don’t have to develop all of that evidence.”
“It’s very much a conscious decision on the part of CMS to say: ‘We think this is advanced care. We want people to have access to it and we’re going to proactively support it.’” Even though there is not a lot of evidence about NGS across the board right now, Mathews sees the CMS saying, “Let’s give it a shot”—in contrast with typically cautious CMS approaches in the past. Political pressures also figure in the equation, he says, given the United Kingdom’s 100,000 Genomes Project and Germany’s recent NGS coding and payment reforms.
One result of the NCD is fairly certain, in Mathews’ view: Foundation Medicine and Thermo Fisher stand to immediately gain market share because of their approved comprehensive tumor panels. The NCD, in fact, originated in a request by Foundation Medicine for parallel review (by CMS and FDA) of its FoundationOne CDx, which last November was the first NGS panel to win FDA approval, Mathews says. “These two companies are in a unique position where they were actually at the forefront of getting parallel approval. So now if you run a Thermo Fisher Oncomine in your lab, it has approval; the Illumina TruSight Cancer Sequencing Panel doesn’t have the same.”
“But long term, now that the pathway has been established and we know how to get approval, it’s just a matter of time for other panels to get approved,” Mathews adds. As a result, he expects that academic medical centers and community hospitals will further insource tumor panel testing, eventually eroding Foundation’s market share.
From laboratories’ perspective, tumor panel profiling makes sense, Mathews says. “The world as it was organized historically had individual tests associated with individual therapeutics; you take a piece of tissue, cut it into 15 pieces and say, ‘Let’s do the EGFR analysis, and now the ALK analysis,’ etc. And to be on label for all of these things, you have to use the FDA-approved companion diagnostic for each of them.”
“But then these NGS panels come along and say we can look at all of it at once. One sample, one workflow.” For EGFR and ALK, he adds, “we know there are certain therapies that respond well. But now you also have newer concepts such as tumor mutational burden and microsatellite instability. It appears that with the new NGS policy CMS is paying for the whole test, and that includes both the FDA-approved components of very clear value and also others that are along for the ride.”