New Study Provides Most Comprehensive Overview of Genetic Test Development, Usage and Spending

As might be expected, there has been rapid growth in genetic test availability and spending on these tests since 2014. But, comprehensive new collaborative analysis conducted by Concert Genetics (Franklin, Tenn.) and researchers from University of California San Francisco shows that 10 new tests enter the market daily.

The most rapid growth in spending occurred on genetic tests for prenatal health, hereditary cancer, and multigene panels. The study, published in the May special issue of Health Affairs on precision medicine, holds substantial health policy implications, including for current debates over the most appropriate means for regulatory oversight and payer coverage of these emerging tests.

“The rapid growth in test availability and spending is a result of the convergence of multiple forces that have implications for relevant health policies,” explains lead author Kathryn Phillips, Ph.D., from University of California San Francisco. “These forces include the clinical need for better tools to predict, diagnose, treat, and monitor disease; increased understanding of the molecular basis of disease; patient demand; industry investment; and regulations that allow the marketing of tests without [Food and Drug Administration] approval.”

Unique Data
The researchers undertook this comprehensive analysis to fill a gap in empirical evidence on test availability and spending reflective of the overall genetic testing landscape and not just specific genes or a single payer. This was enabled through use of proprietary data from Concert Genetics’ test catalog and its genetic testing claims database on commercial payer spending for privately insured populations.

The test catalog database contains information from public websites that has been curated, standardized and organized using tools developed by Concert Genetics. The dataset tracks existing and new tests marketed by CLIA-certified laboratories, as long as the laboratories market the tests externally. This data was used to evaluate trends in genetic test products available from 257 laboratories between March 2014 and August 2017.

Tests were characterized by the clinical domain they are used in (e.g., prenatal tests, hereditary cancer tests, oncology diagnostics and treatment, biochemical tests, pharmacogenetic tests, noncancer hematology tests, human leucocyte antigen typing, neurological tests, gastroenterological tests, tests for identity and forensics, tests of disease risk, cardiological tests, and tests for pediatric and rare diseases). Tests were also classified by type (e.g., single-gene tests, multiple-gene tests, multi-analyte assays with algorithmic analyses, noninvasive prenatal tests (NIPTs), whole-exome sequencing, whole-genome analysis [conducted using sequencing, microarrays, and karyotype], and miscellaneous Current Procedural Terminology [CPT] codes).

Concert Genetics’ genetic testing claims database was used to examine commercial payers’ spending on genetic tests from January 2014 through December 2016. More than 1.7 million commercial payer claims for genetic tests were submitted over the three-year, which contains information for approximately 40 million covered lives from all 50 states and 28 health plans, excluding Medicare Advantage. Relevant claims were identified using the Healthcare Common Procedure Coding System (HCPCS) codes, based on CPT codes. Spending was defined as the allowed amount on the claim, including the amount the health plan paid plus the amount paid by the patient as copayment or coinsurance.

Findings and Implications
The researchers found that over the study period there were approximately 75,000 genetic tests on the market, representing approximately 10,000 unique test types. The majority of genetic tests (86 percent) were single-gene tests. The remaining tests were multigene panesl, including 9,311 multi-analyte assays with algorithmic analyses, 85 NIPTs, 122 whole-exome sequencing tests, and 873 whole-genome analysis tests, which included whole-genome sequencing tests.

Remarkably, 10 new tests enter the commercial market daily—of which two or three per day are panel tests—with nearly 14,000 tests becoming commercially available since March 2014. For both NIPTs and exome tests, two new tests enter the market each month.

For spending, prenatal tests (including both carrier screening and noninvasive prenatal tests) accounted for the highest percentage of spending on genetic tests highest percentage of spending in 2014–16, ranging from 33 percent to 43 percent per year. The second highest spend came from hereditary cancer tests, which accounted for approximately 30 percent. Interestingly, spending on oncology diagnostics and treatment was only about 10 percent of total spending, while pharmacogenetic testing accounted for less than 5 percent of all spending.

Phillips and colleagues write that, “Factors contributing to the growth of NIPTs include that these tests meet a clinical need by being an alternative to prenatal screening methods that incur a risk of miscarriage (such as amniocentesis) and that private payers have moved quickly to cover NIPTs for high-risk women.”

But not all genetic tests have had these favorable conditions, potentially stymying clinical adoption among tests in other clinical domains.

“Regulatory and coverage mechanisms need to evolve to keep pace with the growth and expansion of genetic tests,” write the authors. “Traditional means of regulating tests one kit or process at a time may be a poor fit for the current landscape. The rapid influx of tests and the fact that many genetic tests are lab-developed tests that do not require FDA approval create regulatory and coverage policy challenges.”

The authors say that there is continued need to develop better evidence on the number, types, and quality of tests to inform future policy.

“Such evidence can be useful to multiple stakeholders,” the authors explain. “Patients and providers benefit from knowing what tests are available, payers benefit from the ability to focus on rapidly growing test categories with high current spending and significant predicted future growth, research funders benefit from understanding future trends to support research, test developers benefit from a deeper understanding of market trends for product development, and the government benefits from being able to target key policy development efforts precisely.”

Takeaway: This comprehensive analysis of the genetic testing landscape verifies growth in commercially available tests and private spending on such tests. It further highlights the strong adoption of NIPTs, but suggests the need for greater clarity around reimbursement policy for other genetic tests.