such as APOE. If there were an effective drug for Alzheimer’s disease and the dosage depended on their APOE genotype, that becomes an entirely different matter.

One member of the audience noted that Gray, in his presentation, had described two incentives that diagnostic companies have for generating good-quality clinical data, had discussed the concept of value-based reimbursement, and had explored the ideas of gaining monopoly in a test through the use of intellectual property and a biomarker. What is unclear, the questioner said, is how, without a monopoly and a biomarker, one can squeeze value-based reimbursement out of the payers. If one does not have a monopoly, then the diagnostic companies are simply all going to compete with each other and drive down the price.

Gray responded that the questioner was correct and that the situation is borne out by the examples presented. Those examples illustrate that the innovations that have achieved value-based reimbursement are all cases in which a company owns intellectual property or know-how that cannot be replicated by competitors.

The final question for the panel involved the use of direct or indirect evidence in technology assessment. Direct evidence from clinical trials is preferable, the questioner said, but very few genomic innovations will proceed along that pathway. Indirect evidence, if one can construct the biological pathway, makes sense. The problem is, as Tunis described, that the evidence lines are not clear. What the FDA requires is different from what the third-party payers use. Industry wants the incentive to invest, that is, they want to recoup their investments.

The problem is how to proceed. CMS tried the concept of coverage with evidence development. Could something like that work for innovations that may be close to showing some clinical utility but that still need a clinical trial to demonstrate the additional benefit?

Tunis replied that, for certain clinical applications, obtaining definitive evidence of clinical utility is going to be extremely lengthy, burdensome, and costly. Part of the new paradigm may require that the payer become comfortable with reimbursement tied to indirect evidence or to some threshold of clear clinical validity plus promising evidence of clinical utility with the subsequent documentation or verification of clinical utility occurring in post-market.

This may be generally true for diagnostics, Tunis said. The evidentiary burden of demonstrating an effect of diagnostics on clinical outcomes through RCTs is heavy, whether it is for genetic testing or for CT angiography. Therefore, some kind of conditional reimbursement that presumes that some of the additional questions about clinical utility will eventually be answered—not before reimbursement but after—is going to have to be part of the new approach.

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