In recent years, there has been major uptake of genetic testing. But, as these tests have gained popularity and evolved from single-gene tests to multi-gene and next-generation sequencing tests, ambiguity surrounding their availability and how they’re paid for persists. A study published in Health Affairs sought to clarify these unanswered questions through insight into genetic testing markets, test usage, and health policy implications.
“Insurers need to know how we can efficiently manage this influx of genomic tests and growing expenditures,” said Kathryn Phillips, professor, health economic and health services research, department of clinical pharmacy, University of California San Francisco, and lead author of the study, during a webcast hosted by Health Affairs.
Using data from the test catalog database and genetic testing claims maintained by Concert Genetics, a health information technology company, the researchers had a unique opportunity to use proprietary data to gain a more complete picture of the genetic testing landscape.
Data from 2014 to 2017 from the catalog database, and 1.7 million commercial payer claims from January 2014 to December 2016, were analyzed to determine trends in genetic testing products available and payer spending on the tests.
As of August 1, 2017, there were approximately 75,000 genetic tests available on the market, accounting for 10,000 unique test types. Single-gene tests made up a significant majority (86%) of the tests. The remainder consisted of panel tests, including 9311 multi-analyte assays with algorithmic analyses, 85 noninvasive prenatal tests (NIPTs), 122 whole-exome sequencing tests, and 873 whole-genome analysis tests.
Since March 2014, nearly 14,000 tests have entered the market, with about 10 new tests appearing daily. Of these new tests, 2 to 3 per day are panel tests, and 2 new NIPTs and 2 new exome tests enter the market each month.
By clinical domain, prenatal tests accounted for the highest percentage of spending from 2014 to 2016, ranging from 33% to 43%, followed closely by hereditary cancer tests at approximately 30%. Spending on oncology diagnostics and treatment accounted for just 10%, and spending on pharmacogenetic testing accounted for less than 5%.
The authors found that the highest percentage of spending was for multiple-gene tests, ranging from 60% to 70%, far above any other type of test. The percentage of spending dedicated to NIPTs increased significantly, becoming the second-largest category of spending, while spending on single-gene tests steadily declined during the period.
“So, what does all this mean?” asked Phillips when discussing the policy implications of the findings. “We have rapid growth that’s fueled by expanding demand by patients and providers to use genetic tests and [we] have also seen a dramatic drop in the costs of the technology itself, particularly for sequencing technologies. But is the growth sustainable? And is it manageable?”
Phillips outlined several challenges highlighted in the study, including variable insurance coverage. While some payers provide coverage and reimbursement for multigene tests, coverage remains variable, particularly for large panels not targeted for specific conditions, such as whole-genome sequencing. She also noted that, because insurers are having difficulty managing the influx of new tests, more utilization management, such as prior authorization, is being used. Other challenges include:
Concerns that patients may face high out-of-pocket costs for many of these tests
An ongoing need to determine the clinical utility of genetic tests based on actionable mutations as well as a need for guidance regarding how tests can be implemented in clinical practice
The clinical lab industry is fragmented and likely to evolve in ways that could either facilitate, or conversely inhibit, the growth of genetic testing
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