Coverage Policy Development for Personalized Medicine: Private Payer Perspectives on Developing Policy for the 21-Gene Assay

Purpose: Personalized medicine is changing oncology practice and challenging decision making. A key challenge is the limited clinical evidence for many personalized medicine technologies. We describe the strategies private payers employed to develop coverage policy for personalized medicine using the example of the 21-gene assay in breast cancer. Methods: We examined the coverage policies of six private payers for the 21-gene assay. We then interviewed senior executives (n = 7) from these payers to elucidate factors informing coverage decisions. We additionally focused on the timing of payer decisions compared with the timing of evidence development, measured by publication of primary studies and relevant clinical guidelines. Results: The 21-gene assay became commercially available in 2004. The interviewed payers granted coverage between 2005 and 2008. Their policies varied in structure (eg, whether prior authorization was required). All payers reported clinical evidence as the most important factor in decision making, but all used some health care system factors (eg, physician adoption or medical society endorsement) to inform decision making as well. Payers had different perceptions about the strength of clinical evidence at the time of the coverage decision. Conclusion: Coverage of the 21-gene assay is currently widespread, but policies differ in timing and structure. A key approach private payers use to develop coverage policies for novel technologies is considering both clinical evidence and health care system factors. Policy variation may emerge from the range of factors used and perception of the evidence. Future research should examine the role of health care system factors in policy development and related policy variations.