[gdpawel]

Oncotech was an American laboratory providing individual chemoresponse testing as a service to patients and physicians since the mid-1980s. It was co-founded by Drs. Robert Nagourney and Larry Weisenthal. They each left the company in the early 1990s, over disagreements with the controlling investors (4 venture capital companies) over the management and directions of the company. Dr. Weisenthal remained supportive of the company, over the years, and played an important role in securing and, later, retaining reimbursement by Medicare for their services. Drs. Nagourney and Weisenthal each started their own small private laboratories to offer related cell culture testing services.

Oncotech continued operations as a privately-held, venture-capital controlled company until February of 2008, when it was acquired by a Danish biotechnology company called Exiqon, Inc. for $45 million (US) in Exiqon securities.

Exiqon replaced the Oncotech CEO and installed its own management team, continuing to operate Oncotech as a wholly-owned subsidiary, with a business model centered around providing chemoresponse assays on a (US) national basis — importantly to Medicare patients.

In the case of Weisenthal Cancer Group, they opted out of Medicare, effective July 1, 2008, because the reimbursements received from Medicare did not cover our costs of providing our services (although they are still required to file a Medicare claim on your behalf).

Exiqon Oncotech, however, depended on Medicare reimbursement to support its business model. In the USA, Medicare coverage decisions for many types of medical services are made at the regional level (Local Coverage Decision or LCD), by the private insurance companies with which Medicare contracts to administer services to Medicare beneficiaries. Previous Medicare contractors for California made the determination that chemoresponse assays qualified as a Medicare covered service. These included the TransAmerica and National Heritage Insurance (NHIC) companies. Most recently, an insurance company called Palmetto was awarded the contract to administer Medicare services for California. Palmetto made the decision to discontinue Medicare payment for chemoresponse assays in California.

Last week, Exiqon Oncotech announced that it was discontinuing operations, because of the withdrawal of Medicare reimbursement for its services. This was an entirely understandable, if regrettable, decision. What was in no way understandable — or defendable, for that matter — was the way that they ceased operations.

Exiqon Oncotech sent out notifications to its client physicians that it was ceasing operations, virtually immediately. On a single day this past week, they received two dozen specimens from human tumor biopsies via FedEx and other couriers. All of these specimens were simply sent back to the hospitals and clinics which sent the specimens. Physicians were told that there were no other laboratories who could perform the tests requested.

While it is true that no other American laboratories have chosen to utilize Exiqon Oncotech’s non-proprietary technology for chemoresponse assays, it was well known to Exiqon Oncotech that there are a number of highly experienced, well qualified, well-published American laboratories which provide this service, utilizing different, but at least comparably valid, technologies (cell-death as opposed to cell-growth endpoints).

There have been only two previous, investor-backed, clinical laboratory companies which provided chemoresponse assays as a service to patients, only to make the decision that their business models were no longer viable. These companies were Analytical Biosystems and NuOncology Laboratories. When these latter companies ceased operations they did so in an orderly fashion, giving their clients adequate advance warning and winding down operations at a pace which enabled them to provide testing for those patients and physicians who had already planned and depended upon receiving these services, and these companies were open and helpful in providing their former client physicians with contact information for other laboratories within the US which continued to provide chemoresponse assay services.

In the case of Exiqon Oncotech’s two dozen tumor specimens simply marked “return to sender,” It can scarcely be imagined anything more irresponsible. In many of those cases, doubtless the physicians and/or surgeons discussed in advance with their patients the importance of sending their biopsies for cell culture analysis. In some cases, the surgical procedure may have been performed primarily for the purpose of this analysis. In other cases, the patients were doubtless comforted by knowing that this testing was to be performed.

Business is business, but, at a certain point, business is also about people, and cancer business is, or should be, about cancer patients.

Many are saddened by the shuttering of Oncotech’s doors, 25 years after its founding, and are ashamed at the way in which those doors were apparently shutterd.

It should be noted that the Medicare contractor for the state of Pennsylvania continues to provide coverage for chemoresponse assays and that there is an experienced laboratory in Pennsylvania (Precision Therapeutics) which both provides the assays and accepts Medicare reimbursement as payment in full. California laboratories continuing to provide chemoresponse assays with functional profiling (without Medicare reimbursement, possibly requiring patient payment for services) include Rational Therapeutics, Anticancer, Inc., and Weisenthal Cancer Group.

This has been a double sign of irresponsibility, not only on what Oncotech did, but on what Palmetto GBA did.

The previous CMS administrator for Medicare in Southern California (NHIC) spent almost the entire 2006 doing a extensive, transparent tech assessment of chemoresponse assays and made the decision that the assays were a perfectly appropriate medical service, worthy of coverage on a “non-investigational” basis.

What was of particular significance this time (as compared to approval for the resistance part of the testing in 2000) was that they abandoned the artificial distinction between “resistance” testing and “sensitivity” testing and provided coverage for the whole FDA-approved kit.

Why it was a local coverage decision (LCD) and not a national coverage decision (NCD)? Medicare has only about 20 doctors and 40 total clinicians working in its coverage office.

Also, Medicare doesn’t have a single oncologist on staff, yet since the year 2000, they issued 165 restrictions and directives on the use of cancer drugs and diagnostic tools. Private insurers (like NHIC), on the other hand, employ thousands of doctors and nurses to do this.

Medicare wants to put off-lable drug decision making (which some 60% of cancer drugs are) in the hands of compendia writers in the private sector, many of whom are on the payrolls of the companies that make the drugs. I am just wondering if this had anything to do with what Palmetto GBA is doing?

It amazes me that they don’t emphatically mandate this testing as a requirement for obtaining chemotherapy reimbursement against ill-directed treatments. Evidence in support of these tests is more than sufficient to justify them, particularly in light of the Duke University impact study of chemoresponse assays on the treatment costs for recurrent ovarian cancer.

Impact of a chemoresponse assay on treatment costs for recurrent ovarian cancer.

Havrilesky LJ, Krivak TC, Mucenski JW, Myers ER. Division of Gynecologic Oncology, Department of Obstetrics and Gynecology, Duke Comprehensive Cancer Center, Duke University Medical Center, Durham, NC.

Objective

We sought to estimate mean costs of chemotherapy treatment for recurrent ovarian cancer with or without use of a chemoresponse assay.

Study design

We estimated mean costs for 3 groups: (1) assay assisted: 75 women who received oncologist’s choice of chemotherapy following chemoresponse testing (65% adherence to test results), (2) assay adherent: modeled group assuming 100% adherence to assay results, and (3) empiric: modeled from market share data on most frequently utilized chemotherapy regimens. Cost estimates were based on commercial claims database reimbursements.

Results

The most common chemotherapy regimens used were topotecan, doxorubicin, and carboplatin/paclitaxel. Mean chemotherapy costs for 6 cycles were $48,758 (empiric), $33,187 (assay assisted), and $23,986 (assay adherent). The cost savings related to the assay were associated with a shift from higher- to lower-cost chemotherapy regimens and lower use of supportive drugs such as hematopoiesis-stimulating agents.

Conclusion

Assay-assisted chemotherapy for recurrent ovarian cancer may result in reduced costs compared to empiric therapy.

PMID: 20417480