Tackle The Challenges of Institutional Health Care or Avoid The Hassle?
Recently, we seem to hear about genomics everywhere. Major publications are talking about the $1000 genome. President Obama has launched a Precision Medicine initiative. Ads appear on TV and radio for services where you can learn more about yourself and your family history. Illumina recently invested in Helix to create an App Store, with estimates that 90% of individuals will have their genome sequenced within 20 years. Despite all this, only 6% of Americans report having actually had a genetic test.
How can we bring genomics to more people and fully harness this incredible technology? In 10 years, will patients be more likely to obtain genetic tests through physician referrals or through direct to consumer (DTC) online purchases?
DTC genetic testing has the potential to drive incredible awareness and availability of tests. However, I believe that working within our healthcare ecosystem of doctors, genetic counselors, and payers remains the most important pathway for reaching the broader patient population while allowing for proper professional guidance and follow-up with test results. Tackling the challenges in our healthcare system is likely something Paul Graham would refer to as a schlep: tedious, unpleasant, and often avoided.
From Doctor-Ordered to DTC Tests: Two Possible Market Approaches
Over the past 30 years, genetics has been largely dominated by the CLIA-approved Laboratory Developed Tests (LDT) market, and the vast majority of testing has occurred through the 800-pound gorillas of the diagnostics industry: LabCorp and Quest Diagnostics. Tests are ordered through referring physicians, blood is sent to CLIA-approved laboratories, and fees are sometimes (partially) covered by private insurance companies.
In the late 2000s, we saw the emergence of the first DTC genetic testing companies. 23andMe, deCODEme, and Navigenics hit the market with products covering everything from ancestry to mildly confirmed wellness associations to single gene disorders. Customers originally paid as much as ~$1000 out of pocket, though that cost eventually fell to under $250. Navigenics and deCODEme have since left the market, while 23andMe remains strong, currently offering its service for $199.
Despite an investigatory congressional hearing and significant regulatory hurdles from the FDA, 23andMe ultimately found a way to offer a scaled back version of their original testing results directly to the public without physician oversight. Since then, a number of other companies have launched DTC genetic tests — a trend that has evolved into another pathway for genetic test distribution.
In general, broader public access to genetic testing is a good thing. Statements by the National Society of Genetic Counselors have supported the opinion that anyone has the right to order a genetic test if they so choose. Yet, while the industry enjoys legitimate support, many companies have been criticized for under-emphasizing the potential complexities of getting a genetic test.
Ultimately, the DTC path has taken root and is here to stay. Now, with an FDA-sanctioned pathway and evolving online educational tools, a new question arises: Which test ordering pathway will become dominant 10 years from now, doctor ordered tests or online DTC?
Point 1: Genetic Testing Should be Actionable
One important guideline for most genetic testing in a medical setting is that such testing is actionable. For a genetic test to be defined as ‘actionable,’ there must exist lifestyle changes, medical intervention, or therapies that can generally ameliorate the potential downsides of a genetic test result.
Some DTC companies only include information that is clinically actionable. Many others offer information on anything ranging from ancestry to eye color. While this information is of interest to the consumer, from a medical perspective it does not meet the requirement of being actionable. In some cases, testing results may over-represent how deterministic certain mutations can be, ultimately eroding the credibility of genetics as a whole.
Point 2: Genetic Testing Should be Cost-Efficient and Simple
Relative to the complex nature of insurance reimbursement, the DTC pathway may meaningfully relieve the financial complexities of genetic testing. Take Color Genomics: By adopting a DTC approach, they can offer an inherited BRCA1/BRCA2 test for just $249, drastically reducing the “$1,500 to $4,000 price tag” such testing is generally quoted as carrying. This $249 price point is far more straightforward than a) confirming insurance coverage through a pre-verification process and then b) calculating the out-of-pocket responsibilities of privately insured tests (though this process is not always cheaper for the patient). It is by stepping outside of the medical/insurance market that Color Genomics is able to achieve such price simplicity.
I believe there is a segment of the market willing to pay directly for these services, albeit small in size. Color Genomics has also done a great job of making genetic counseling available on demand and involving physicians in this process when possible. And while I am pessimistic about patients’ uptake of these counseling services (Aetna reports that only 36.8% of patients receive pre-test genetic counseling prior to BRCA1/BRCA2 testing), perhaps more invested consumers will make better use of them.
My other pessimism stems from my experience at Recombine. The vast majority of Americans are still unwilling to pay out of pocket for healthcare. Individuals with private insurance give up a portion of their paycheck in exchange for coverage, and this investment is tied to a general sentiment that the payers should cover testing. At this point in time insurance companies do not cover genetic testing offered DTC; therefore, patients with private insurance are more likely to obtain testing ordered by a doctor so that they are eligible for reimbursement.
Point 3: Medical guidelines typically require results from accredited laboratories before physicians can follow-up/intervene. Physicians adhere to these professional standards.
Another key question in this discussion revolves around how patients are able to employ actionable medical intervention after receiving a genetic test. Typically, follow-up requires a physician or other medical service provider to perform a procedure or prescribe medication. Most physicians will not rely on DTC testing results before recommending a follow-up for a number of reasons:
- CLIA/CAP-accredited laboratories meet quality standards that not all DTC companies meet (many outsource their work). Some DTC companies do meet these standards (Color Genomics is a great example), though physicians may not be aware if this is the case.
- Physicians often prefer laboratories whose science they have personally vetted. They feel comfortable with the accuracy of results from these labs and will often order confirmation testing for any DTC results.
- I am not aware of any published statistics on follow-up from DTC testing, but it would appear that when testing is done in the context of a health care provider, as opposed to at home, patients are more likely to receive accurate interpretations and follow-up when necessary. Furthermore, the burden and cost of duplicate testing is avoided.
From both a professional guideline and legal/liability perspective we see that many physicians will respond to DTC results by simply ordering the same (or similar test) from a CLIA/CAP-accredited diagnostic laboratory. This gives peace of mind regarding quality and accuracy and covers all bases within the medical world.
The Phosphorus Thesis: The majority of genetic testing will ultimately remain in the medical setting with CLIA/CAP-approved laboratories, covered by third-party payers
Making actionable genetic information more widely available is a Phosphorus goal. We have our own clinical lab where we validate and launch diagnostics tests as well as engage in cutting-edge research studies. We have built a platform that allows us to easily develop and deploy new diagnostic tests. Furthermore, we believe the best way to broaden access to genetic tests is by enabling other laboratories to administer complex genomic technologies utilizing our platform.
Existing laboratories that already have the infrastructure and, in many cases, have navigated the insurance/payer contracting process can simply leverage our secure end-to-end platform to add next-generation sequencing-based tests within their offerings. This will help democratize the pricing within the medical world and lead to greater availability and coverage among payers.
While DTC offers a potentially shorter pathway to commercialization, my concern is that stepping outside of the providers and payers in our healthcare system (and shirking some of the unpleasant challenges that are unique to healthcare) limits the adherence to medical guidelines and the access to the broader population. It is like Paul Graham said, “no one likes schleps”, but in the world of healthcare, they are often necessary challenges to take on and solve.