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Myriad's New CEO Discusses Promise, Challenges of Changing Times in Genetic Testing

Mary K. Caffrey
Evidence-Based Oncology spoke with Mark Capone about the challenges and opportunities in molecular diagnostics, and what's ahead at Myriad Genetics.
Third, we provide an appropriate level of service, so that a patient and a physician know when testing is appropriate and know how to use that test for medical management. When you look at what it takes to ensure that quality of end-to-end service…it really requires a pretty significant cost structure to ensure that kind of accuracy.

What’s important to a payer is that the implications of a false test result are very significant. A false positive means that a patient is potentially going to pursue prophylactic surgery and unnecessarily remove healthy organs. A false negative means the patient is not going to undergo the surveillance required to ultimately prevent cancer. Either one of those false test results can cost a payer hundreds of thousands of dollars, so it’s worth it to make sure the most accurate test is being used up front to avoid that patient impact and cost implication downstream.

Have payers refused to cover a surgical procedure based on a result from a direct-to-consumer test?

I would not know if there are specific examples because we don’t see that information. However, providers are beginning to appreciate that these tests are not regulated by the FDA. So, claims that are being made by these tests have not undergone rigorous review by an agency such as the FDA.

You are aware of the extensive conversations surrounding regulation of laboratory-developed tests; but at this point they remain outside FDA regulation. Both payers and providers are aware some of these claims may not be substantiated by significant additional data.

Will the rise of direct-to-consumer tests make regulation happen more quickly?

I do know the FDA has stated before that when it comes to BRCA or hereditary cancer tests, in which the patient is making very significant medical management decisions—those are the examples of the tests they are most concerned about. Those are the ones they would classify as high risk. To the extent that high-risk tests proliferate in the marketplace without having those claims reviewed by the agency, I think it does increase the urgency with which the FDA will pursue regulation.

When Angelina Jolie had her first surgery—and announced it in The New York Times—the effect on Myriad was so significant that you referenced it in your quarterly earnings report. When Ms Jolie announced her second surgery to remove her ovaries recently, we heard reports that some payers did not want to cover testing. Did you find this to be true?

We haven’t seen any difference, but again, we have extensive quality control procedures in place to screen upfront testing, to ensure that testing meets the criteria for each of our payers. If tests met the criteria prior to the celebrity publicity, they were being covered; if they met criteria after the publicity, they were covered as well.

If there are labs without those quality control procedures, then payers have concerns that inappropriate tests will be run.

It’s been 2 years since the Supreme Court decision on the DNA patent. What has happened in the market that has surprised you? What has happened that has not surprised you?

The magnitude of the decisions being made will not only affect the patient but generations of family members that will follow this patient. As a result we were not surprised that what we’ve seen in the market, patients and providers continue to be willing to use what they consider the absolute highest quality test upon which they can base these very important decisions. We continue to see that after the Supreme Court decision, and that’s why we continue to be the market leader in providing these test results to patients. [The Wall Street Journal reported in May that BRCA testing still accounts for 80% of Myriad’s sales.7]

The one thing that has been surprising, and important for the United States as a country, is that we continue to see the erosion of intellectual property rights, particularly in the life sciences industry. We now stand out of step with all of the other developed countries in our willingness to protect intellectual property in the life sciences.

From our perspective and many others, if we are going to get back to a footing equal to other countries, we are going to need to look at our approach to intellectual property in the life sciences.

Where do you feel there is a problem? Is it with Congress? The regulators? The courts?

The decisions that have been made have been largely in the courts. It will either take additional cases to be litigated through the court system to provide clarity in those areas that remain uncertain, or legislative action to ensure Congress’ intent around intellectual property are made clear to the courts. Either one of those avenues are a possibility. For those of us who invest enormously in research in the life sciences industries, having comparable intellectual property protection with the rest of the developing world is really essential.

To that end, what is happening in science that is exciting—and might be worth protecting?

If you went to ASCO [American Society of Clinical Oncology], it’s really remarkable if you look at the evolution of cancer treatment from 5 years ago to where we are today—and I think what will happen over the next 5 years. We truly are getting to the point where we are understanding the genetics of the disease for a specific individual and tailoring the drug selections to that genetic understanding. While that has always been the promise of molecular diagnostics in cancer, I think we really are starting to see that promise become a reality, and you will see that more so over the next 5 years.

For Myriad, we now have a number of companion diagnostics—everything from BRACAnalysis CDx, to Tumor BRACAnalysis CDx, to myChoice HRD—all of which provide increasing sensitivity in identifying patients that are most likely to respond to DNA-damaging agents. We think over the next 5 years you will see a groundswell of opportunities to identify those patients and allow them to respond to drugs in a much more effective way than we would have otherwise seen.

The other areas for us that are most interesting are outside cancer. You’ve seen a lot of investment in molecular diagnostics in cancer, but we have really just scratched the surface in diseases outside cancer—things like autoimmune disorders; things like preventive care such as cardiovascular disease, diabetes, neuroscience—we are doing some exciting work in helping to do differential diagnoses in bipolar disease, or in drug selection in the neuroscience field. You’re going to see an expansion in other diseases, which in reality constitute an even larger share of our healthcare spend than cancer.


References

1. President Obama’s precision medicine initiative: fact sheet. White House website. https://www.whitehouse.gov/the-press-office/2015/01/30/fact-sheet-president-obama-s-precision-medicine-initiative. Published January 30, 2015. Accessed July 14, 2015.

2. Association for Molecular Pathology v. Myriad Genetics, Inc. SCOTUSblog website. http://www.scotusblog.com/case-files/cases/association-for-molecular-pathology-v-myriad-genetics-inc/. Published June 13, 2013. Accessed July 13, 2015.

3. Chen C. Color Genomics sells $249 breast cancer gene test to the masses. Bloomberg website. http://www.bloomberg.com/news/articles/2015-04-21/color-genomics-brings-245-breast-cancer-risk-test-kit-to-masses. Published April 21, 2015. Accessed July 10, 2015.

4. CLFS Reform. American Clinical Laboratory Association website. http://www.acla.com/clfs-reform/. Accessed July 14, 2015.

5. Myriad Genetics posts in-line Q3 earnings, guides lower. Zacks website. http://www.zacks.com/stock/news/173953/myriad-genetics-posts-inline-q3-earnings-guides-lower. Published May 6, 2015. Accessed July 10, 2015.

6. Myriad Genetics to acquire Crescendo Bioscience [press release]. Salt Lake City, UT: Globe Newswire; http://investor.myriad.com/releasedetail.cfm?releaseid=823235. Published February 4, 2014. Accessed July 9, 2015.

7. Myriad receives FDA approval of BRACAnalysis CDx as companion diagnostic for Lynparza (olaparib) in ovarian cancer patients [press release]. Salt Lake City, UT: Globe Newswire; http://investor.myriad.com/releasedetail.cfm?releaseid=888523. December 19, 2014. Accessed July 9, 2015.

8. Walker J. Myriad Genetics fights off threats from rivals. Wall Street Journal website. http://www.wsj.com/articles/myriad-genetics-fights-off-threats-from-rivals-1430645582. Published May 3, 2015. Accessed July 9, 2015.

9. Brokerages set Myriad Genetics price target at $37.11. Dakota Financial News website. http://www.dakotafinancialnews.com/brokerages-set-myriad-genetics-price-target-at-37-11-nasdaqmygn/234821/. July 2, 2015. Accessed July 14, 2015.

10. Smith S. Assessment of laboratory-based quality control processes to ensure appropriate utilization of genetic testing for hereditary cancer risk. American College of Medical Genetics Annual Meeting, Nashville, Tennessee. Presented March 27, 2014. Poster 165.
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