January 09, 2020

Precision medicine can transform lives

When Angelina Jolie revealed that she had tested positive for the BRCA-1 gene—which carries a high risk for breast and ovarian cancer—she chose to have a preventive double mastectomy. Her decision helped pave the way for other women at risk for these cancers to consider this option. Gene therapies, too, can be transformative. For example, a therapy is now available to restore functional sight to those born with a rare disease that causes blindness.

Costs are staggering

There are more than 75,000 genetic tests presently on the market, with 8 to 10 new tests being added daily. Projected annual spending on tests is expected to double in size and reach $5 billion by 2020. On the gene therapy side, current treatments exist that cost just shy of $1 million per patient. New game-changing therapies in the pipeline are expected to enter the market with even higher price tags.

Keeping up with the pace of clinical innovation is challenging

If your head is spinning, you’re not alone. About 60% of providers say they’re not ready. Other key players—regulators, health plans and lab testing companies—are struggling to keep up with the new products and tests emerging under the precision medicine umbrella. For employers, questions surrounding coverage of these tests and therapies are top of mind. Complicating matters, only about 400 CPT codes are available for lab testing companies to use to bill health plans on thousands of tests, making an accurate claims data analysis exceedingly difficult.

Barriers to clinical utility exist

Genetic tests often vary in accuracy and clinical utility. However, many providers are not yet adequately trained on how to select the right test and evaluate the results. Gene-based treatments have their own set of challenges. Scientists are working on perfecting gene transfer methods that face greater challenges in practice than in the lab. Furthermore, for many of the new promising therapies on the market today, side effects and long-term outcomes remain unknown.

Additional players are emerging to support precision medicine

New classes of service providers can assist doctors, health plans, employers and patients navigate the complexities of this landscape. For example, genetic counselors can help both providers and patients. Lab benefit managers have begun assisting health plans with managing genetic testing benefits. Opportunities may arise for employers to contract directly with these vendors to manage cost and utilization.

This information provides just a snapshot of what you’ll need to know as this field continues to develop and transform the health care space. Employers will also likely grapple with contracting and budget-related questions, as well as ethical considerations that will undoubtedly become a part of coverage and plan design decisions.

The Business Group is developing a resource to help guide you through these and other challenges and expand your general level of comfort with the burgeoning field of gene science.

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