From left: David Kroll of Forbes, Shelly Zhuang of Eleven Two Capital, and Dr. Richard Snyder of Independence Blue Cross
“Spit kits” sold by ambitious Silicon Valley companies appear to be the harbinger of a personal genomics revolution. But the integration of a growing genomics segment poses a potential problem for the healthcare industry as it begins to figure out covering the costs of genetics testing can be as complex as an individual’s three-billion-bases-long genome.
“There’s not enough money in the average person’s pocket to take care of the increases in premiums companies would have to charge,” said Dr. Richard Snyder, senior vice president and chief medical officer for Philadelphia-based Independence Blue Cross.
Snyder spoke with Shelley Zhuang, founder of investment firm Eleven Two Capital, during an afternoon panel on the economics of the expanding genomics marketing during the MedCity CONVERGE conference in Philadelphia this week.
Underlying the question of cost in genetics testing is the usefulness of the tests themselves. Two questions seem to dominate when it comes to interrogating the practicality of genetics testing. As Zhuang pointed out, both are matters that affect the clinical utility, or the predictive ability, of genetic tests.
“If [a test] is accurate, what could the clinicians do? How does it impact the decision process for physicians?” she said.
In other words, having a person’s genomic data might be great, if it can be put to use. Just having the information doesn’t really help a physician or a patient. That’s a factor that influences whether health insurance would cover the costs of getting the test done. Say a test can help a patient avoid a stroke by identifying a gene-based change and informing which drug ought to be prescribed. In such an instance, an insurance company would offset or cover the costs of that test. How high—or low—those costs could potentially be remains the question.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“The economics are definitely becoming problematic,” Snyder said. “But I’ve been here long enough in the insurance business that I’ve been through enough kill cycles. We’ve always come through.”
