Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News
Patient-Pay Pricing, New Tests Start Reshaping Gene-Testing Market
New tests and pricing plans are reshaping the genetic testing landscape, with Invitae offering non-insurance patients a lower price for its genetic tests, and two other developers launching new tests priced in the hundreds of dollars.
At $475 per indication, patients can access Invitae’s full menu of tests, covering a single diagnostic service with more than 200 genes assessed for any of several indications. These include cancer, cardiology, neurology, pediatric genetics, hematology, and other rare conditions. To take advantage, patients must register with the company, pay online themselves, and have their tests ordered by a clinician.
“We started driving down prices, and we’ve made it clear we intend to continue to drive down the prices to multiple price points in multiple disease areas,” Invitae President and COO Sean George told Clinical OMICs. “Exomes and genomes will cost more than smaller panels, but in general, rapidly driving down the price of indication-based testing is what we foresee in coming years.”
Invitae also lowered its testing price for contracted institutions and in-network third-party payers. They are now charged a per-indication price of $950, while non-network payers and non-contracted institutions continue to be charged $1,500 per indication.
Because the institutional prices are below the low-to-mid-thousands range that payers have paid for many tests until now, Invitae doesn’t expect those payers to balk and leave patients fending for themselves.
Between 3% and 5% of tests are patient-paid in a given month, George said. That’s a fraction of the 34% of tests paid for by institutions or individual patients over the company’s history through March 31, with payers paying for the rest, according to the company’s Form 10-Q filing for the first quarter.
The company is not predicting if that percentage will rise as a result of patient-pay. Prospects for more paying patients appear brighter overseas since many state-run health systems do not reimburse for tests: “We would presume some of those markets would open up, but we don’t know for sure,” George said.
“What we do know is that up to 10% of any given population has an inherited disorder. Probably 20% to 30% could benefit from a rule-in-rule-out genetic test. Much less than 1% of any population actually has access to genetic tests, and we think a big reason for that is price. It stands to reason that we would expect to see that change as we continue to lower the prices,” George added.
Invitae acknowledges one factor in rolling out its patient-pay pricing was the launch of a low-cost test—Color Genomics’ $249 saliva test kit for genes linked to breast and ovarian cancers. The company’s Color Test is designed to analyze mutations in the 19 genes known to be responsible for an inherited predisposition to breast and ovarian cancer—including BRCA1 and BRCA 2.
A Color spokeswoman wouldn’t directly address how the company expects demand for its tests to be affected by Invitae’s patient-pay price, or if there are plans to expand the number of genes and indications studied by the Color Test.
“Color is focused on democratizing access to genetic testing performed in a responsible manner. We are continuing to focus on a high-quality, low-cost physician ordered product at $249 (including genetic counseling). We continue to see strong adoption of our product,” Fatima Sabar told Clinical OMICs.
Most recently on June 9, Kailos Genetics launched its own gene-based test designed to be accessible and affordable. The company’s new Praxis test consists of a cheek swab and is priced between $149 and $299, depending on indication.
Praxis is aimed at people who are starting two new medications—ER+ breast cancer treatment Tamoxifen and Plavix (clopidogrel)—or any of several drugs in the categories of antidepressants, birth control pills, and proton pump inhibitors for stomach disorders.
Praxis uses Kailos’ TargetRich target enrichment technology to select specific genes and regions from a person’s genome, then uses next-generation sequencing to identify variants for a panel that include Factors II and V, as well as the genes CYP2C9, 2C19, 2D6, 3A4, 3A5, ABCB1, GRIK4, HTR2A, SLCO1B1, VKORC1, MTHFR, and OPRM1 among others, Kailos CSO Troy Moore explained.
“With our current offering, a customer would ask for results for a particular medication—proton pump inhibitors for instance—in which case we would analyze the results for the genes that contribute to the drugs performance,” Moore said. “If, at a later date, they inquire about clopidogrel then we would analyze those genes and provide them a new report. The pricing is determined by which analysis is requested.
Moore said his company’s development pipeline includes tests in areas of genetic risk such as eye health and carrier screening: “Praxis will evolve beyond pharmacogenetics, beyond cancer risk assessment, beyond carrier screening and we’re going to do it at an affordable cost and fast turnaround times.”
Invitae is among genetic testing companies that over the past 18 months have settled infringement lawsuits filed by owners of patents related to BRCA gene testing—a group that includes Myriad Genetics.
In May, Myriad executives told analysts they remained confident about the company’s competitive strength two years after the U.S. Supreme Court unanimously overturned seven of Myriad Genetics’ 24 patents related to its discovery of the precise location and sequence of breast cancer susceptibility genes BRCA 1 and 2.
CFO R. Bryan Riggsbee said that since the high court decision, Myriad’s Hereditary Cancer business has continued growing at a 5% compound annual growth rate. During the third quarter of its 2015 fiscal year, hereditary cancer saw revenues of $159 million, up from $145.6 million in Q3 of FY2013.
Myriad spokesman Ron Rogers added that the company was more than competitive on price: “On average 80% of patients tested at Myriad pay nothing out-of-pocket, and the average patient bill is less than $100, making our hereditary cancer tests the best patient value on the market.”
Myriad has been criticized in the past for its pricing, with Angelina Jolie in 2013 calling the $3,000 list price then in effect for the company’s BRCA tests “an obstacle for many women.” But Myriad provides discounts off of its list prices. For patients in need, Rogers said, Myriad offers financial assistance programs: “In the last year we’ve provided more than 4,000 free tests to uninsured patients.”
“Today, we maintain approximately 95% market share because physicians and commercial payers continue to value Myriad’s decades of experience with variant classification as a key differentiator between tests,” Rogers noted.
The 95% share is for the “community physicians” segment. Mark C. Capone, President of Myriad Genetic Laboratories and Myriad’s CEO as of July 1, acknowledged to analysts the company’s market-share loss among academic and genetic customers due to competition. The segment now accounts for 7% of revenues compared with 15% before the Supreme Court ruling, he said.
This article was originally published in the July 2015 issue of Clinical OMICs. For more content like this and details on how to get a free subscription to this digital publication, go to www.clinicalomics.com.