The Business of Genomic Testing by James Crawford

The Business of Genomic Testing:
A Survey of Early Adopters
James M Crawford, MD, PhD
jcrawford1@nshs.edu
Executive Director and Senior Vice President for Laboratory Services
North Shore-LIJ Health System
Chair, Department of Pathology and Laboratory Medicine
Hofstra North Shore-LIJ School of Medicine
Manhasset, NY

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Disclosure*
Biomedical Research Alliance of New York (BRANY)**
2009- Vice Chair, Managing Committee
*uncompensated
**CRO for Clinical Trials

Business Aspects of Genomic Testing:
Why Do It?
College of American Pathologists
Personalized Healthcare Committee
Business Working Group (2011-2013)
James M Crawford, MD, PhD (Chair)
jcrawford1@nshs.edu
Lynn Bry, MD, PhD
John Pfeifer, MD, PhD
Sam Caughron, MD
Stephen Black-Schaffer, MD
Jeffrey A Cant, MD, PhD
Jill H Kauffman, PhD
4 © 2012 College of American
Pathologists. All rights reserved.

2014 Jul 10. doi: 10.1038/gim.2014.60.

“Precision Medicine” (Genomic Testing)
• Massively parallel sequencing (Next-Gen, NGS)
– Not SNP Microarray for screening/detection
• Clinical applications (2005 ff….)
– Medical Genetics
– Cancer Genomics*
– Pharmacogenomics*
– Infectious Disease Diagnostics
• *Question 1: “in extremis” or “ab initio”?
• Question 2: By Whom?

The Decision to bring Genomics
into an Institution
• “Genomic” laboratories: Business argument stands
– In support of integrated health systems?
– In support of independent providers?
• Independent reference laboratories: access to market
• Private pathology practices: not yet in market
• Integrated health systems: the focus of this study
– Predominantly Academic
– For the moment, these are the “providers” of Precision
Medicine

A Survey of “Early Adopters”
• Selection of Participants (“or”):
– Having members on the CAP Personalized
Healthcare Committee
– Performing NGS testing under a CLIA license
– Record of peer-review publications in this area
– Institutional announcement of NGS implementation
• Survey:
– Standardized 1 hour interview by one Interviewer
– 10 questions; follow-on questions as needed

Topics addressed in the survey
• Choice of Genomic Analysis Tests for Clinical Use
• Drivers and Barriers
• Reimbursement considerations
• Lessons Learned from Early Adopters
• CAP resources for Adoption

Data Compilation and Analysis
• Complete Interview transcripts: redacted
• Parse text into responses to each core question
• “Qualitative Response Analysis”
– Identify specific [Units of Measure] (n=94)
– Develop lexicon of Common terms
– Group into [Categories]
– Compile Participants’ use of [Units]
– Analyze on basis of [Categories]

Survey metrics
• 13 Institutions interviewed, in 10 different states and 1
Canadian Province
• In their persons, during 2011-2012 the Interviewees had 93
publications relevant to Genes/Diagnosis
• Research and Clinical applications including:
– Next Generation Sequencing/Targeted Sequencing
– Bioinformatics Pipeline
– Molecular Surgical Pathology
– Digital Molecular Imaging
• 2 of them CLIA-certified laboratories for NGS

Survey Questions
1. Why did your institution decide to adopt NGS?
2. How did you implement NGS?
3. What clinical applications did you choose for NGS?
4. How did you decide between in-house or send-out?
5. How did you obtain funding for NGS?
6. What are your plans for engaging payers?
7. Are NGS services considered a competitive advantage?
8. What lessons learned can you share?
9. How will you measure successful outcomes?
10. What can the CAP do to assist NGS adopters?

Institutional Cumulative Word Count
13
7000
6000
5000
4000
3000
2000
1000
0
Q1
Q2
Q3
Q4
Q5
Q6
Q7
Q8
Q9
Q10
© 2012 College of American

Words per Question
CAP?
14
2500
2000
1500
1000
500
0
Why?
How?
Apps?
In/Out?
$$$?
Payers?
>>>?
Lessons?
Metrics?
0
2
4
6
8
10

Intended applications for NGS
• Cancer Genomics 10 institutions
– CLIA certification 1 institution
– Secondary intent 8 institutions
• Medical Genetics 3 institutions
– CLIA certification 1 institution
– Secondary intent 3 institutions

Reasons to Adopt NGS
• Demand from Clinical Colleagues 13
• Anticipated efficiency 12
• Acquisition of institutional expertise 9
• Advancing clinical applications of PM 7
• Requisite for institutional stature 5
• Value for Research 5
• Improved TAT in Molecular Diagnostics 4
• Gaining expertise before NGS is commoditized 3
• Desire to provide Leadership 2
• Competitive market advantage 2
• Reduction in overall cost of clinical care 2

Competitive Advantage of NGS:
Institution X’s View
• Demonstration of clinical utility will provide a competitive advantage.
• In-house bioinformatics, analytics ,and reporting provide an added
value to our clinicians
• Position pathology in the center of individualized treatment plans,
instead of just a reporting-of-values type of service.
• Provides strategic advantage with the hospital, since alignment with
the clinician base tends to get the hospital’s attention
• There is the question of how do you bring NGS into the everyday
world when there is so much pressure on price, when the
technology is so complicated, and when many clinicians don’t
understand this except in a very big picture way
Pathologists. All rights reserved. 17

Competitive Advantage of NGS:
Institution Y’s View
• Will enable pathology as a discipline to demonstrate to our clinical
colleagues:
– we own this, this is what we do.
– we’re preparing our trainees to do this
– we’ll take care of it, we’ll explain it to you
– leave it to us, we’ve got it covered.
• It will only be a competitive advantage for a couple of years before
most institutions are doing it

Cons
• Very expensive.
• Time and effort needed to implement and maintain vs.
using other types of testing that would currently provide
the same information.
• We don’t know how to interpret most of the variants in an
exome or genome.
• Complex – both technically and for the IT/bioinformatics
and computational infrastructure needed.
• How to manage/store the data, from the IT, medical,
ethical and legal standpoints.

Barriers to Implementation of NGS
• Scarcity of Informatics expertise 7
• Need to develop staff/professional expertise 5
• Rapidly changing nature of technologies 4
• Validation of clinical testing protocols 3
• Expense of implementation 3
• Amount of data to curate 2
• Difficulty in getting first application deployed 2
• Ethics of reporting findings (the “reveal”) 2
• Lack of institutional support for training 2
• Uncertainty of clinical utility 1
• Uncertainty of reimbursement from Payers 1

In house vs out-source aspects of
Genomic Analysis
• Per institutional funding and infrastructure, many sites
prefer to keep in house if possible.
– Control of pipelines, discovery activities.
• At a minimum, keep some sequencing in house for
targeted assays or confirmation.
• Many see that sequencing is commodity and there are
benefits to out-sourcing while the technology is currently
expensive and complicated to manage.
• Focus local resources on content development and
interpretation

Institutional Decision-Making Process
• University President 1
• Hospital Chief Executive Officer 5
• Hospital Chief Operating Officer 3
• Hospital Chief Financial Officer 2
• Hospital Capital Committee 1
• Dean, College of Medicine 2
• Cancer Center Director 1
• Chair, Department of Pathology 3

Approval process
Key issues that need to be addressed when seeking the
resources to set up an NGS lab:
• Define the clinical need (leverage institutional expertise)
• Define the business plan
• Determine the cost-benefit ratio of bringing NGS testing
in-house (does it support existing programs, what is
being spent on send outs, what’s the return on
investment)

Funding
• Hospital 100% 5
• Pathology 100% 5
• Pathology:Cancer Institute 50%:50% 1
• Government 100% 1
• Outsourced: no funding 1

Additional Institutional Requirements
• Unanticipated OJT of Technologists 8
• Unanticipated OJT of Pathologists/Scientists 5
• Additional effort in Informatics 5
• Requirement for a Project Manager 2
• Need for support from Information Services 1
• Need to establish multidisciplinary Governance 1

Reimbursement
• Need to demonstrate value to payors beyond currently
methods (panels versus single gene tests)
• Until reimbursement hurdle sorts itself out within your
payor mix, it’s probably wise to limit the NGS test menu
initially
• Reimbursement for NGS will doubtless follow the rules of
the marketplace: payors will reimburse, but will make
deals with labs to do this testing at the lowest price
• Conversations with payors can be more productive if you
enlist clinical colleagues to be part of the discussion

Lessons Learned
• More complicated and took longer 4
• Need a more complete multidisciplinary team 4
• Need to start with proven applications 4
• Need to understand market and testing load 2
• Need to play to institutional strengths 2
• Need to verify adequacy of Informatics 2
• Need to be adequately capitalized at start 2
• Need to have a local research partner 1
• Need for multistakeholder advisory group 1
• Need to specify patient selection for NGS 1

Lessons Learned From Early Adopters:
Institution A
• Small institutions might want to wait for:
– the platforms and informatics and reporting to be worked out
– the clinical utility is firmly established in the literature
• It’s a trade-off: Is it better to get NGS in two years when things are
pre-packaged, or be a leader in the field?
• NGS is a much bigger and more complicated endeavor than you
expect
• Success depends on adequate resources (money and people); the
technology and bioinformatics are not plug-and-play
• Do you have the required informatics? It’s a lot easier to generate
the data than to interpret it; you really have to adequately resource
the informatics function for interpretation
• Will the clinical load support an NGS lab?

Institution B
• It’s important to be adequately capitalized when you start off
• It’s important to be adequately staffed when you start off
• It’s possible to go from zero to a customized panel in under a year;
many labs will soon be doing NGS since it will become a requisite
for oncology practice
• Embrace change; it’s a brave new world, and NGS will enhance our
medical practice as pathologists
• Must work very closely with your oncologists and hematologists
because you don’t want to offer something that they’re not going to
feel is useful in their practice
• Start simple to build the expertise; start with a small sequencer.
• Bioinformatics will be key

• Put together an interdisciplinary group that can help you select the
gene panel
• “Get your feet wet” means start small; build your volume gradually
so you keep your quality up
• The amount of data is huge, so if you can’t manage that, you are
very quickly going to find yourself incapable of keeping up with the
information and the clinical demands for your services
• Match your platform with the testing you want to do
• A whole exome can actually be a quicker and cheaper way to
develop panels than customized capture probes
• Regulatory issues arise (for example, you can’t force people to order
a panel)
Institution C

Institution D
• Know the politics of your institution
• Carefully consider the additional work to do a customized panel as
opposed to use of a commercially available kit

Measures of Outcomes
• Better management of patients 5
• Growth in test volume 4
• Expansion in test menu 2
• Earlier clinical diagnosis 2
• Achievement of self-sustaining finances 2
• Elimination of other laboratory testing 1
• Support of Education and Research 1
• Successful redeployment of staff 1
• Physician/client satisfaction 1
• Patient satisfaction 1
• Expansion of patient options for treatment 1

Expectations, Next Steps
• The expectation is that each panel will become easer (build
infrastructure, develop staff, develop reporting.)
• we spend a lot of time thru current clinical trials that are out there to
identify drugs that are on clinical trials, the target specific genes that
will be completed probably within the next year or so. And so we
have built those genes into our next panel, so we’ll validate a panel
of 120 genes or so
• **Expect that in the future the exome test will become a sort of a
universal assay and you pull out what you're interested I; at
metabolized drugs that are used for cancer - so the universal assay
idea is kind of nice rather than having to setup however many,
different assays for different genes

Recommendations for the
College of American Pathologists
• Educational programming 7
• Testing standards, Checklists, Validation SOP 6
• Proficiency Testing 5
• Info about Coding, Billing, Reimbursement 3
• Info about Natl Data Networks, Databases 2
• Accreditation of laboratories 1
• Advocacy 1
• Peer Networks 1
• Literature resources 1

Iden.fy
clinical
need
Examine
ins.tu.onal
strengths
Clinical
programming
Research
programs
Informa.cs
Examine
Ins.tu.onal
Priori.es
Clinical
Programming
Research
and
Educa.on
Market
&
Stature
Establish
Business
Plan
Ins.tu.onal
Resourcing
Reimbursement
Strategies
Research
Resources
Unan.cipated
Resources
Priori.ze
Ini.al
Clinical
Applica.ons
Develop
Project
Plan
Timeline
and
Monitors
Governance*
Outcomes
Measures
Obtain
Ins.tu.onal
Approval
Implement
Monitor
Flow
Chart

PCR-‐based
tes.ng
NGS
tes.ng
for
same
purposes
NGS
tes.ng
commercial
applica.ons
Expanded
test
menus
Custom
NGS
panels
for
specific
applica.ons
NGS
tes.ng
Expanded
test
menus
Implementa%on
Pathways
Pathway
1
Pathway
2
Pathway
3
NGS
tes.ng
Expanded
test
menus
Targeted
NGS
panels
(5
to
>100
genes)
?
Exome
sequencing
(and
beyond)
Pathway
4
Outsourcing
Technical
Academic
Industry
Informa.cs
Outsourced
In-‐house

Beyond the Laboratory*
• Amount of data that has to be curated
• Need to catalogue clinically actionable variants
• Limited consensus on what variants are relevant
• Lack of reimbursement for genomically-driven clinical
interventions
• Burden to Providers and Patients in following up on
genomically-driven clinical interventions
*Manolio TA et al., Genet Med 2013; 15: 258-267

Key Concepts
• Opportunity for advancing Patient Care
• Imperatives for developing Knowledge, Expertise
• Development of an Evidence Base for NGS use
• Need to provide Leadership
• Institutional Prestige

Peer Review of manuscript
• This study does not touch on the issue of appropriateness of
implementation of NGS. (This makes) discussion of implementing NGS
difficult.
• The authors should comment on (whether) desire for ‘recognition’ is a
good reason to implement NGS.
• Broader issues concerning the implementing of these technologies are
only tangentially addressed.
• We need more information on the business case for doing this testing.
What is the anticipated ROI?
• We need more information on how this technology might drive problems.
How much will the technologies be used when they add little or no
value?
• What is the clinical utility? What is being done to assess the clinical
utility? Is the technology driving more efficient care? Better outcomes?
39

2014 Jul 10. doi: 10.1038/gim.2014.71.

Editorial
• Whatever the rationale for the study, the survey neglected to first assess
central and difficult issues – these leaders’ perceptions of the clinical
utility of NGS and their reasons for being early adopters.
• Was it to be perceived as scientific leaders? If so, then NGS should
have been introduced as a research tool.
• Was it to be perceived as a market leader? If so, then the primary
reason for adoption of this technology is responding to economic
incentives…without sufficient concern about utility or costs.
• Was it merely because NGS is now considered “affordable” and
competitive with specific genetic tests of demonstrated value? If so,
then it is important to consider the downstream medical and financial
consequences of testing.
41

Editorial
• Analytic validity and clinical validity are necessary but not sufficient
conditions for use. Without demonstrated utility, the potential for waste
and harms outweights hypothetical benefits.
• Evaluations such as this one… have great potential to inform the
thoughtful introduction of whole-genome sequencing and other
diagnostic tools, but they need to ask and answer the right questions,
the important questions, not just the practical and business ones.
42

Conclusion
• This is precisely the conundrum:
– Other than dramatic case reports and series, the clinical
utility of NGS has not yet been demonstrated.
– Nevertheless, there are compelling reasons for
institutions deciding to implement NGS and “Genomic
Medicine.”
• This study examined the decision-making process, not
whether these were the right decisions to make.
• Only careful future study (with or without randomized clinical
trials) can answer the question of clinical utility.
43

The Business of Genomic Testing by James Crawford

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