Proposal for Value-Based, Tiered Reimbursement for Tumor Biomarker Tests to Promote Innovation and Evidence Generation

Abstract

Cancer precision medicine depends on high-quality tumor biomarker tests (TBTs) for treatment selection. TBT reimbursement within the United States in the current regulatory environment is not tied to premarket evidence of clinical utility, resulting in a vicious cycle wherein low-level evidence of utility leads to poor reimbursement, thereby impeding investment in developing new, clinically valuable TBTs supported by high-level evidence. Rational, value-based TBT pricing presents many practical challenges. Precise one-to-one mapping of reimbursement to cost savings or cost effectiveness is precluded by an absence of formal cost-effectiveness analyses for many emerging TBTs, and for more established TBTs, it has become clear that such analyses may yield wildly variable, subjective estimates. To address these challenges, we propose a system of tiered reimbursement that rewards development of high-quality TBTs within specific use contexts, supported by strong evidence of analytic validity and clinical utility. We propose three use contexts of TBTs, each defined by its influence on treatment decisions relative to the current standard of care—Opt-Out, Opt-In, and the use of appropriate, alternative, effective therapies (Opt-Alt). By ensuring minimum levels of reimbursement, this system provides a return on investment to encourage and support the research and development needed to generate high levels of evidence for claims of clinical utility for TBTs by using a robust, objective, and value-based system. We believe our proposed evaluation system will serve as a practical starting point to raise the bar for TBT quality and utility, which has the potential to redirect health care dollars from futile or ineffective treatment to investment in the development of high-quality TBTs needed for safe and effective precision cancer care.