Invitae Wants Higher Pricing From MolDX for Cancer Panel

Invitae is now getting paid by the Medicare program for its multi-gene cancer panel under interim pricing, but it is seeking a higher price in the near future.

The Centers for Medicare & Medicaid Services’ (CMS) contractor Palmetto GBA determined under its MolDx pricing plan that Invitae should be paid through CPT code 81432, one of a group of codes formulated and released early this year to set permanent reimbursements for next-generation sequencing molecular tests.

Under the interim pricing guideline, Invitae would be paid $622.53 for its multi-gene panel that assays for 14 different genes related to hereditary breast, ovarian, and endometrial cancer. That compares to a reimbursement of $2,180.22 for BRCA1 and BRCA2 mutation analysis.

“We’re pleased to announce that we are now getting paid by CMS, and we believe this decision sends an important message regarding the clinical utility and cost-effectiveness of multi-gene panels when applied in a medically responsible way based on peer-reviewed science and clinical guidelines,” said Invitae Chief Executive Officer Randy Scott.

However, Invitae is not satisfied with the current interim pricing point. It recommended that its test be reimbursed at $950 when CMS issues final pricing guidelines later this year. That’s the rock bottom reimbursement Invitae currently receives in contracts with commercial insurers for the test. It currently receives $1,500 for the test when it is conducted for commercial payers through a non-network provider. It charges uninsured individual patients $475.

The move by Invitae to ask for more money is not surprising; the laboratory sector has been in conflict with Palmetto over its MolDX pricing system for years, with many suggesting that it would have to take often significant payment cuts if the Medicare population is to have access to their assays, and that many prices are set below the actual costs of performing the tests.

In its most recent earnings release, Invitae said its cost of goods sold for each accession was about $600. The company generated just under $4 million in revenue for the first quarter ending March 31.

One sector observer who asked not to be identified suggested that Invitae has priced its tests so low compared to other labs that the prices set by MolDX will have little or no impact on its business operations—but its pricing model could harm other laboratories that perform next generation sequencing molecular tests.

Takeaway: Invitae is pushing for a higher price for its hereditary cancer panel from the Medicare program.