- The Centers for Medicare and Medicaid Services has finalized Medicare coverage of diagnostic laboratory tests using next generation sequencing (NGS) for patients with advanced cancer.
- When these tests are used as a companion diagnostics to identify patients with certain genetic mutations that may benefit from Food and Drug Administration-approved treatments, they can assist patients and their oncologists in making more informed treatment decisions, the agency said.
- This decision was made alongside the FDA, which granted its approval of the FoundationOne CDx (F1CDx) test last November. F1CDx is a NGS-based in vitro test used as a companion diagnostic for 15 targeted therapies, capable of detecting mutations in 324 genes and two genomic signatures in any solid tumor.
The coverage determination finalizes that patients with recurrent, metastatic, relapsed, refractory or Stages 3 or 4 cancer will be eligible to receive the tests covered by Medicare. The coverage was expanded to patients with relapsed, refractory or Stage 3 cancers after reviewing public comments.
CMS also announced it will cover similar tests when approved by the FDA. Tests that gain FDA approval or clearance as an in vitro companion diagnostic will automatically receive full coverage under this final national coverage determination (NCD), provided other coverage criteria are also met.
Coverage determinations for other diagnostic laboratory tests using NGS for Medicare patients with advanced cancer will be made by local Medicare administrative contractors.
"We want cancer patients to have enhanced access and expanded coverage when it comes to innovative diagnostics that can help them in new and better ways," said Seema Verma, the CMS administrator. "That is why we are establishing clear pathways to coverage, while at the same time supporting laboratories that currently furnish tests to the people we serve."
Specialists were pleased with the expansion decision.
"The implementation of the draft NCD criteria for NGS would have had profound adverse and immediate consequences for Medicare beneficiary access to therapies, and negatively impact the treating physician's ability to order medically necessary tests for patients," Bruce Williams, College of American Pathologists president, said in a statement.
"While the final NCD nationally covers only approved or FDA cleared tests using NGS, the final determination leaves the local Medicare Administrative Contractor with the discretion to cover all other tests as long as specific patient criteria are met."
Venture capital funding hit a peak in 2016 at $2 billion across 45 deals in cancer therapeutics, according to CB Insights, though there's still a lot of money going into the space. In 2017, $1.4 billion was invested across 35 deals.
If more technologies get covered for use by CMS, private payers are likely to follow and add more value to companies dealing with cancer and life sciences technology. Foundation Medicine Inc.'s stock closed at $79.85 last Friday, when CMS' announcement was made, a 1.6% increase over previous day's close. On Monday, the stock opened at $81.35 per share.
In 2014, Exact Sciences Corp.'s stool DNA cancer detection test was approved for coverage by CMS.