Personalized reimbursement
Revenue for pharmacogenomic testing is expected to grow ∼25% a year from 2004 to 2011, according to the report “US Genetic Diagnostics Market” released in October by consultancy Frost and Sullivan of San Antonio, Texas. Current reimbursement policies, however, are discouraging the development of tests that help match patients to therapies, according to panelists at the Burrill and BIO Personalized Medicine Meeting on October 18 in San Francisco. Whereas drugs are reimbursed according to their clinical value, diagnostic tests are typically reimbursed according to how they are manufactured. That means that tests can still be reimbursed at very low rates even if expensive clinical trials show huge medical benefits. Frost and Sullivan analyst Martin Nejat says the problem is significant. “Clinicians, patients, testing laboratories and test manufacturers are likely to stay away from tests that are not reimbursed to a high degree.” But the Centers of Medicare and Medicaid Services (CMS) of the US Department of Health and Human Services is still unsure what kinds of evidence it wants to see [from manufacturers] when making coverage decisions. CMS head Mark McClellan said at the meeting he is very interested in supporting targeted treatments, but that relevant studies are still being done. Biotech investor Steve Burrill also said CMS, whose policies are generally adopted by private insurance companies, will do more to shape personalized medicine than FDA will, perhaps allowing non-US markets to adopt personalized medicine further. “The reimbursement arena is the gatekeeper,” he remarked, so an effective test without the right codes won't get reimbursed. MB
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