Precision diagnostics can save money: what’s holding them back?

The promise of Precision Medicine is selecting the right medicine for the right person in a timely manner. But beyond cancer, trial and error prescription of therapies remains prevalent in most disease areas, even when tests are available to distinguish between responders and non-responders from those who are or are not sensitive to side effects. This can lead to significant waste of healthcare resources. Science still exceeds commercialization of many diagnostic tests. Changes to the reimbursement model to align price with value could provide a solution.

Genomic tests that detect the presence of certain biomarkers can personalize therapy choice, diagnose specific disease types and predict response level. A diagnostic is said to have clinical utility if the test leads to changes in the medical treatment of a patient population and improves health outcomes.

For example, breast cancer patients taking Herceptin (trastuzumab) must be HER2 positive for the drug to be effective. This means that before they are prescribed Herceptin, they undergo diagnostic tests to find out whether cancer cells have high levels of human epidermal growth factor receptor 2.

Non-small cell lung cancer can also be treated in a variety of ways with therapies targeting tumors with specific biomarkers, including epidermal growth factor receptor, anaplastic lymphoma kinase, and others.

In cancer, so-called ‘companion diagnostics’ are often used. They often appear on the Food and Drug Administration-approved label as a condition for prescribing certain therapies.

Alzheimer’s disease

In addition to cancer, there are other diseases that have underlying biomarkers that can distinguish between patients in terms of their level of response to medications and the extent to which they experience side effects. For example, most patients with Alzheimer’s disease have this accumulation of beta-amyloid plaque in their brains. New drugs such as Leqembi (lecanemab) remove such plaque in early-stage AD patients. But to avoid the risk of no benefit and dangerous side effects, it is imperative that: correct diagnosis of plaque formation is given before Leqembi is prescribed. Brain scans must be performed for this. After the FDA approved Leqembi last year, Medicare finally decided to do so routinely pay for imaging tests such as Amyvid (florbetapir F 18) – which had been on the market since 2013, but largely not reimbursed—to detect beta-amyloid plaque in patients with Alzheimer’s disease.

In addition, about 20% of patients who receive an infusion of lecanemab develop changes in the brain called amyloid-related imaging abnormalities or ARIA, causing bleeding or swelling in the brain. People who carry a specific gene version called APOE-ε4 are more susceptible to developing ARIA and associated serious complications. And so it is critical that all patients undergo APOE gene testing before considering the use of lecanemab.

Autoimmune diseases

But outside of cancer, AD and a handful of other diseases, tests to detect biomarkers are not used as often. To illustrate, anti-tumor necrosis factor therapy such as Humira generally works for less than 1.5 hours 50% of patients with Crohn’s disease, according to studies cited by the sponsor. And while there is a better success rate in rheumatoid arthritis patients, it is still less than 65%.

There are ways that payers and patients can potentially save billions of dollars by adopting the methods that underpin precision medicine. In the autoimmune disease rheumatoid arthritis, diagnostics can first be used to determine in advance whether joint pain is caused by TNF. If levels are higher than normal, it indicates inflammation that can be treated. TNF inhibitors are prescribed to an estimated 18 million patients with rheumatoid arthritis worldwide, but for at least several million they are not clinically effective at all.

Furthermore, on a blood basis identification of non-responders for anti-TNF therapy is critical. Equipped with a blood test that can predict an individual’s response – or lack thereof – Scipher Medicine says it is on its way to “cracking the code of treatments for rheumatoid arthritis.” The company’s PrismRA test analyzes each patient’s molecular signature to determine it whether they will respond positive for treatment with TNF inhibitors. The product uses a predictive model that combines clinical factors, blood tests and 19 gene patterns to identify patients who are “very unlikely” to respond to anti-TNF drugs.

However, PrismRA is not covered by insurance as standardsaid KFF, although a decision by the Centers for Medicare and Medicaid Services last October to start paying back because the test can stimulate its use.

Mindera Health is another company involved in the development and production of diagnostics for people with autoimmune diseases, in this case a skin patch or skin analytical test to guide the treatment of psoriatic patients.

The firm announced On February 29, the company announced that it had partnered with a non-traditional pharmacy benefits manager, Liviniti, to improve the treatment of moderate to severe psoriasis patients using a test called Mind.Px. The success rate in terms of patient responses to currently available biologics is rough 52%. Mind.Px is a first-of-its-kind diagnostic to guide psoriasis prescribing decisions towards the most appropriate treatment. The program claims it will improve clinical outcomes while reducing drug costs for self-insured employers.

According to a study published in Dermatology and therapyDermatologists surveyed said Mind.Px would “reduce trial and error” and provide an important tool to “make informed decisions about drug selection, improve patient outcomes and significantly reduce wasted expenditures.”

To increase the profile of Mind.Px and Mindera Health initiated last year, an evidence-based coverage development project with the insurer Highmark and its affiliated health plans in Pennsylvania, West Virginia and Delaware. Here, Mind.Px’s messaging relies on collecting data to demonstrate its effectiveness. This initiative evaluates trends in physician use, health outcomes, drug switching among psoriasis patients, and the overall net savings resulting from use of the test versus a control group.

NASH

Non-alcoholic steatohepatitis is fast becoming the trend main etiology for advanced liver disease, according to an article in the British medical journal. The disease is associated with obesity, hypothyroidism, diabetes and high blood fat levels. It causes excessive accumulation of fat in the liver and causes inflammation and scarring. A recently approved treatment, Rezdiffra (resmetirom), for NASH does not include a liver biopsy on the label, despite this being included as a requirement in the clinical trial on which the marketing authorization was based.

While biopsies may be the gold standard, they are both invasive and often unnecessary. Nevertheless, other non-invasive tools such as the FibroScan can be used. FibroScan has been licensed by the FDA as a diagnostic device for measuring liver scarring or fibrosis caused by a number of liver diseases, including NASH. However, historically speaking there has been relatively poor reimbursement for FibroScan, both in terms of the percentage of plans that cover it, about two-thirds, and the rate at which it is covered. Particularly from a study published in the American Journal of Gastroenterology found that all Medicaid claims were denied.

FibroScan is one of several biomarker tests that are essential to identify effective therapies, but also to rule out people who are unlikely to have advanced liver disease. Without adequate access to such tests – through Medicare, Medicaid or commercial insurance – iterative methods of prescribing drugs will prevail. This, in turn, could lead to more wasteful spending.

Reimbursement reform needed

Science still exceeds commercialization of many diagnostic tests. When applied effectively, precision medicine enables more efficient deployment expensive medicines.

But to better achieve this, the pricing and reimbursement model for diagnostic tests needs to be reformed, according to Lena Chaihorsky, co-founder and senior vice president of ALVA10. Reimbursement systems are old-fashioned because they are administratively set up to reflect the cost of producing and conducting tests (sometimes called a “cost-plus” provision) but not the value they deliver. Accordingly, Chaihorsky says this creates an environment where financial incentives are misaligned, as more treatments are used and paid for, while diagnostics – which could optimize treatment and make care more efficient from a clinical and economic perspective – is not a priority. Its use is not sufficiently rewarded.

Although since the early 2010 by public payers, including Medicare contractor Palmetto GBA’s MolDX program, to tie the prices of diagnostic tests to their value, insurers are still largely using outdated reimbursement systems that do not reflect the risk associated with developing a test its value on the market. If this same model were applied to pharmaceutical products, government and commercial insurers would set prices for drugs based on the costs to manufacture and administer them. This is not suitable for medicine or diagnostics. The path to greater adoption of precision medicine could be facilitated by a comprehensive reset of the pricing and reimbursement system for biomarker tests.