Inside the Industry: Government Report Casts Doubt on Cost-Effectiveness of Leading Genetic Colorectal Cancer Screening Test

Few of the newfangled consumer genetic testing products have had greater commercial success and visibility than Exact Science’s Cologuard colorectal cancer screening test. But a troubling new government report casting doubt on the product’s effectiveness might have burst the Cologuard bubble, at least for now.

The Growth of Cologuard

Launched in 2014, Cologuard is the first stool multi-target stool DNA test (mtSDNA) for colorectal cancer screening. It has been ordered by nearly174,000, including 142,000 primary care physicians, with 900 new doctors joining the list of orderers each week. According to Madison, Wisconsin-based Exact Science’s figures, Cologuard rakes in average revenues of $479 per test at an average cost of $123. The test, which is covered by Medicare, now commands 6% of the total U.S. colorectal cancer testing market.

Adding to the buzz is the recent announcement of Exact’s impending $2.8 billion acquisition of Genomic Health, producer of the equally dynamic Oncotype DX consumer genetic screening tests for breast and prostate cancer. Collectively, Cologuard and the two Oncotype DX products represent approximately 40% of all solid tumor incidence. Exact’s Chairman and CEO Kevin Conroy touted the Genomic Health acquisition as “a pivotal step toward building the leading cancer diagnostics company in the world.” And he may not be exaggerating. If the deal gets regulatory approval and closes by the end of the year as expected, the combined company is forecasted to generate $1.6 billion in 2020 pro forma revenue.

New CMS Report Casts Doubt on Cologuard

But those projections were made before the new research report finding that Cologuard is “less effective and considerably more costly” than alternatives. “At its current reimbursement rate, triennial mtSDNA testing also has higher costs than all other strategies, making it an inefficient screening option,” according to the paper published in the Sept. 4, 2019, issue of PLOS ONE.

One research report is one research report. But this research just so happened to be sponsored by the Centers for Medicare and Medicaid Services (CMS) for the express purposes of analyzing the use of mtSDNA testing for cancer screening of Medicare patients. CMS essentially asked MITRE Corporation to determine whether Medicare has been getting its money worth in shelling out an average $500 per test to cover Cologuard. MITRE commissioned investigators at the Cancer Intervention and Surveillance Modeling Network (CISNET), a consortium of investigators that use academic modeling to study the cost-effectiveness of cancer prevention, screening, and treatment methods, to carry out the research into the cost-effectiveness of Cologuard.

For Exact, the timing could not be any worse. In addition to completing the Genomic Health acquisition, Exact is awaiting a crucial determination from the U.S. Preventive Services Task Force (USPSTF) which is currently reviewing its position on whether to recommend mtSDNA colorectal cancer screening. The fear, of course, is that the new report will influence the USPSTF’s position. raising the prospect of the research paper influencing its position.

Exact wasted no time refuting the report, issuing a company release the very next day claiming that the CISNET analysis and models “understate Cologuard’s value proposition, by employing unrealistic assumptions, such as adherence rates (i.e., 100% adherence, or relative adherence over a fairly narrow range) for screening, follow-up and surveillance procedures.” The Exact press release criticizes “this academic approach [as] not reflective of clinical practice” and calls on researchers to ditch CISNET models in favor of “analysis that incorporates more accurate real-world data regarding adherence rates.”

Takeaway: While it remains to be seen what, if anything, the long-term impact will be, the immediate effect was to spook investors. The day the report came out, Exact’s shares fell 10%.