UnitedHealthcare's decision this month to cover genetic tests designed to predict a patient's response to mental health medications has injected a dose of optimism for the companies that sell them, coming after the FDA issued a broad warning about unapproved claims made by some tests.
The insurance giant's policy on pharmacogenetic testing will, starting in October, open up United's 27 million individual and group clients to companies including Myriad Genetics and Genomind, which sell tests measuring a patient's compatibility with antidepressant and antipsychotic drugs.
Executives at both companies predict the decision will bring in other payers that are, for now, on the sidelines.
By covering genetic tests for antidepressants, UnitedHealth is betting on a technology that the FDA suggests is still backed by shaky evidence.
A 2018 FDA notice asked individual companies to stop claiming their tests can predict which drugs a patient will respond to. In April, it threatened regulatory action against one, Inova Genetics Laboratory, hitting it with a warning letter.
"The relationship between DNA variations and the effectiveness of antidepressant medication has never been established," the FDA said in a notice updated in April.
In its rationale for covering the tests, UnitedHealth cited trials, including one sponsored by Myriad, that showed patients had better treatment responses and remission rates when their treatment was guided by genetic tests. But crucially, the symptoms of those patients did not improve any more than a control group who received treatment as usual.
"I wouldn't say there's no evidence it works," said James Potash, director of psychiatry at Johns Hopkins University who said he is not affiliated with either test maker. "It's just the evidence at this point is still weak."
"I've been concerned that the hype around pharmacogenetics, at least for depression, has gotten out ahead of the data," Potash said.
Anthem, which provides coverage to nearly 24 million individuals and employers, says tests are "investigational and not medically necessary," according to a company spokesperson.
The Blue Cross Blue Shield Federal Employee Program, which covers two-thirds of government workers and their families, says there isn't enough proof the genetic tests actually improve patient health.
Medicare does not have a national coverage determination for pharmacogenetic testing for psychotropics. A CMS spokesperson told MedTech Dive regional administrators can make exceptions for individual cases. The agency would not comment on whether Medicare or Medicaid has plans to make determinations in the future.
Myriad's GeneSight test has an average selling price of $2,000. Genomind's test was listed at $1,886 in a 2016 contract allowing federal agencies to order it.
Still, test makers say the decision by the nation's largest private carrier gives them a chance to show the tests have value.
UnitedHealth is typically one of the last insurers to cover new products, Shawn Patrick O'Brien, CEO of Genomind, told MedTech Dive, predicting its rivals will follow suit.
"We expect this to be a tipping point for other major payers," he said, "because they don't want to be uncompetitive in the marketplace." Genomind has discussed coverage with Anthem, Blue Cross and Blue Shield and at least one other payer, he said.
Myriad, which is also courting Anthem, is pursuing more business with pharmacy benefit managers and employers. In July it announced GeneSight would be a covered benefit by the PBM for Kroger, the nation's largest grocer, and that an unnamed Fortune 50 employer would begin covering it in 2020.
Myriad CEO Mark Capone said on the company's recent earnings call it is in "active dialogue" with Anthem, the biggest Blue Cross Blue Shield plan and second biggest private plan by revenue after UnitedHealthcare.
New contracts with payers could offset declining revenue from the test for Myriad. Revenue from GeneSight fell $12.3 million from the fiscal year ending June 30, 2018, to June 30, 2019, according to SEC filings. Revenue from the test fell 15% in June alone.
Capone attributed the drop in sales to eliminating components of the test measuring patients' compatibility with pain relievers and ADHD drugs. Those tests did not have as much evidence backing them up, he said, and "a few payers expressed similar views."
"[W]e wanted to eliminate any potential hurdles" for coverage of the psychotropics test, Capone said.
Both Myriad and Genomind have said they are working with the FDA to make sure they comply.
In response to an FDA request, in August Myriad proposed changes to how it reports test results, even though "we continue to disagree the changes to the tests are required," Capone said on the company's fourth quarter earnings call. The company submitted clinical evidence for its test earlier in the year, he said.
Genomind has doubled its counseling staff to help doctors interpret test results instead of listing the genetic compatibility of drugs directly in the results.
Correction: In a previous version of this article there were errors in the description of the evidence relating to ADHD and pain reliever tests and the measure of June GeneSight test revenue. A correction regarding Medicare's coverage determinations has also been added.