Pharmacogenomic Testing For The Insurance Industry

Genetic testing, similar to other interventions in healthcare that aims to improve patient outcomes while reducing cost of care, is increasingly adopted by the insurance industry. In general, most plans cover genetic testing that is proven to help choose the best course of a certain medical condition.

In particular, genetic testing for drugs metabolism or response is called pharmacogenomic (or pharmacogenetic) testing. Pharmacogenomic testing is different from tumor genetic testing, because it identifies genetic variations in the human, rather than the cancer. This means that pharmacogenomic testing can also help optimize safety and efficacy of medications in cardiology, psychiatry, and many other critical or chronic conditions beyond cancer.

The value of pharmacogenomic testing for the insurance industry has been apparent by the increasing coverage of testing in numerous policies and programs in the US and Asia.1,2,3 But even in developed markets, the review process has been varied. Often, they consider key factors such as the number of genes, the size of scope, and target population defined in the policy plan.

Genetic test increases brand value, which may translate to revenue, but also reduces cost of care, if practiced correctly.

Although in markets such as Southeast Asia and Asia, the practice is even more novel, trends in the insurance and personalized care both suggest this practice should be more common in the future. Because reviewing evidence and designing coverage of these tests is still a new practice, this article aims to highlight a few trends and factors for consideration for payers considering genetic testing, especially pharmacogenomic testing, in their product portfolio.

TRENDS AND FACTORS TO CONSIDER FOR GENETIC TESTING SERVICES Rapidly decreasing cost The cost of genetic testing has dropped drastically since it was first sequenced. Currently services such as whole genome sequencing is marketed towards patients, who are willing to pay out of pocket, with a wide range of $100-3,000. The range of pricing often is related to the technology being used, such as genotyping or sequencing, which in turn would impact data processing, cost of reagents and fixed assets, as well as the number of genes being targeted. Additionally, some testing approaches that have not been completely adopted by the medical community may translate to less cost savings.

Rapidly increasing evidence No multigene panel for pharmacogenomic testing was covered in 2017.4 However, there are about 20 private insurers in the US covering pharmacogenomic testing across multiple plans. The considerations of each of these providers are highly independent. For example, United Healthcare (UHC) in 2020 was the first to roll out coverage for multigene testing for antidepressants and antipsychotics medication, considering factors such as diagnosis, recommendation from medical professional, and number of genes in the panel.5 This push is possible due to the abundance in evidence linking specific genetic variants with patient outcomes, which will only continue to increase with the quality and quantity of patient outcomes and standardization of recommendation from professional bodies and organizations.

Adoption in the medical community Awareness of access and benefit of genetic testing in the medical community plays a key role in optimizing its value, because medical providers provide counseling pre- and post-test, as well as act upon the information given by the genetic test. Meanwhile, implementing genetic testing in the medical community requires involvement of multiple stakeholders within the hospital system, expertise in transdisciplinary teams, and an information management system that allows for sharing and storing genetic information securely. Beyond systems-level changes within the provider systems, physicians are cautious of the cost-effectiveness, clinical effectiveness, and availability of the testing or recommended action as a result of that testing is. Despite these challenges, there is significant interest from practitioners: about 70% of physicians agree with the benefits associated with genetic testing for personalization of prescriptions, such as reduced trial and error and adverse drug reactions overall.

TRENDS AND FACTORS IN INSURANCE INDUSTRY Data to inform insurance product pricing According to a BCG report, new pricing models are important to give payers advantage against the cost-plus model, and therefore their competitors.8 Evaluation of new technologies that increase quality of care without increasing overall cost (due to reduced hospitalizations and trial and error of prescription), may not need to be burdened to patients. Though some insurance companies have included hospital benefits as part of their product lines in an effort to increase brand value and therefore revenue, cost containment with the right provider partner may be key to evaluate these decisions sustainably.

Robust and diverse data collection methods Although most of the clinical trials and clinical evidence for genetic testing are conducted in developed countries, more local genetic services providers are validating its results in local populations with cost-effectiveness calculations and biomarker validation studies. Recently, even regulatory bodies are acknowledging more diverse data sources to make local validation studies more cost-effective, such as the use of real world evidence in Health Technology Assessments.9 The trend is supported by the quality of data obtained through electronic health record systems, wearables, and even patient-reported outcomes. This quality of data is encouraging for payers to create data-driven decisions.

The rise of ecosystems and platforms beyond digitization To determine product design and pricing, collaboration with experts and service providers is key. It is true that digitizing workflows and assets (i.e. rolling out health mobile plans, apps for agents), have increased engagement and therefore data collection from policy holders directly. However more importantly, the insights from the data collected accelerate the rise of ecosystems, defined as an interconnected set of services that allows users to fulfill a variety of needs in one integrated experience by McKinsey.10 Ultimately, payers that are able to put customer centricity first wins. To be able to do so, payers therefore should partner the right collaborator with interest and expertise in complimentary data sets and provide a seamless experience for policy holders.

COLLABORATING WITH GENETIC PROVIDERS Published joint studies for the cost-effectiveness of genetic testing has been done in Korea and many other places. Though public data sets may inform technology assessment and pricing, there still is a need to adapt those models and insights using internal data to facilitate decision making.

Building this data capture, analysis, and insights engine within each payer requires significant investment. However, with the right partner, a collaboration with the right scope can catalyze this capability in many payers in Southeast Asia and the region.

Beyond partnering with insurance companies to provide genetic testing services, Nalagenetics collaborates with payers to gather data, design studies to estimate benefits of testing, and generate insights to make better decisions for pricing that will benefit both patients and payers. These studies are informed by data sets that Nalagenetics gathers through integration with electronic health record systems of hospitals, as well as patient-reported outcomes from our mobile app. Nalagenetics currently has provider networks in Singapore, Indonesia, and expanding into Malaysia and other Southeast Asia countries.




Levana Sani is the CEO of Nalagenetics.

Nalagenetics is a part of our Batch 7 GK Plug and Play Indonesia Program. To know more about our programs in Singapore, click here.

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