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The outlook for in-house next-generation sequencing

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May 2023—Bringing next-generation sequencing in-house was at the center of a March 27 roundtable led by CAP TODAY publisher Bob McGonnagle, with costs, reimbursement, equity, and the electronic health record part of the conversation.

Jeremy Segal, MD, PhD, of the University of Chicago, explains why the Genomics Organization for Academic Laboratories was formed. “By lowering barriers and encouraging cooperation,” he said, “we’ve seen our labs increase the pace of development and the quality of the assays they’re bringing on.”

CAP TODAY’s interactive guide to next-generation sequencing systems begins here.

There’s increasing interest in bringing next-generation sequencing in-house as opposed to sending it to a reference laboratory. While there are costs associated with bringing it in-house, if you look at total cost of the test and turnaround time, it’s an even horse race or slightly preferable to bring it in-house. Luca Quagliata, would you agree with that?
Luca Quagliata, BCMAS, PhD, VP and global head of medical affairs, Thermo Fisher Scientific: I do agree. Cost is an important component of being able to bring these tests in-house. We often think cost is driven only by reagents, but it’s not the component that most impacts overall expenditure. Cost of personnel to perform the analysis is equally important. With solutions that are going toward fully automated or semiautomated systems, you can free hands, better utilize the lab workforce, and effectively maximize budget.

The other part of the equation is the cost of treatment. A long turnaround time to results usually means placing the patient on any available treatment, which is not necessarily the best option. If a suboptimal treatment decision is made and subsequently a treatment change needs to be forced, the patient will pay for it in terms of outcomes. The health care system will probably also bear additional costs because those patients usually experience more side effects, which means rehospitalization costs and a prolonged process.

Fiona Nohilly, can you comment on the movement to in-house and how you look at the total cost of performing the test for the benefit of patients?

Nohilly

Fiona Nohilly, senior manager, product marketing, Americas regional marketing, Illumina: We are thinking about the total cost of ownership from sample and library preparation through sequencing and analysis. Since we last met for this roundtable, we have launched three new platforms. The NovaSeq X Series, which has our DRAGEN [Dynamic Read Analysis for GEN­omics] secondary analysis pipeline built into the instruments, allows for the cost of the secondary analysis to be included in the sequencer. With the NovaSeq X Series, you can get through a variant call and a VCF [variant call format] file on the instrument, and that can kick off immediately after the sequencing run is done.

We also launched our NovaSeq 6000Dx, which is paired with the DRAGEN server. We are continuing to invest on the informatics side and thinking about the analysis piece, as it is a costly and time-consuming resource for our lab customers and partners.

Today we launched our latest tertiary analysis platform, Illumina Connected Insights, for oncology testing.

Jeremy Segal, do you have initial thoughts on this topic or would you like to make an opening statement?

Dr. Segal

Jeremy Segal, MD, PhD, director, genomic and molecular pathology, and associate professor, University of Chicago: These cost issues have gotten a bit better over the past years. Our local MAC [Medicare administrative contractor] has decided to cover comprehensive testing for a large group of patients—600 different ICD-10 codes covering at a reasonable cost for the large panel code, which is surprising and nice. That changes our outlook a little. It gives us the possibility of running a profit, which, if you’re in an academic center and bringing in positive dollars, makes it a lot easier to talk to the hospital about what we can do to arrange to get every patient tested here rather than sending it out. The whole conversation is different.

I’ve been involved in setting up a consortium of academic centers called GOAL [Genomics Organization for Academic Laboratories]. We have 29 academic centers collaborating on NGS development around a core set of shared chemistry reagents. As a result of that and bringing on a new, larger sequencer, our per-sample costs, the raw cost, are down to around $200. That doesn’t include my salary or those of the bioinformaticians. What Fiona said about DRAGEN-based informatics is something to consider long term—how do we make that more efficient? The combination of maybe improved reimbursement and ways to reduce some of the cost overhead of NGS is helping to make the conversation a better one at an academic center or community hospital about whether it makes sense to invest and bring it in-house.

What do you think most influenced the MAC on the coverage decision?
Dr. Segal (University of Chicago): I don’t know. It wasn’t us. I would guess it was some of the corporate laboratories.

Luca, do you have insight into what would influence these MAC decisions?
Dr. Quagliata (Thermo Fisher): This is not something a single company has achieved alone. The entire industry has had a lot of conversations with the payers. One critical point that changed the conversation is that now, especially for certain tumor types, there is enough clinical evidence that genomic testing, especially with a fast turnaround time, is making a substantial difference for the patient, and that is reflected also in the costs. Payers understand now that the cost of sequencing is an investment, one that has a return in terms of clinical outcomes and costs, because the cost of testing is a fraction of the cost of the treatment. A good investment in the right testing has a very good ROI in terms of spent dollars and clinical outcomes.

Dr. Segal (University of Chicago): NGS testing used to be more experimental. But at this point, it’s just standard of care and it’s more difficult for payers to say, “No, we’re not going to pay for this” when they’re already paying for the drugs. These are standard-of-care algorithms that everybody is using for their patients. That helps a lot, too.

Karla Bellett, what are your views on this?
Karla Bellett, MT(ASCP), CLS, segment marketing manager, clinical oncology, Americas regional marketing, Illumina: Illumina is a founding member of the Access to Comprehensive Genomic Profiling coalition, which is a coalition of 13 members, including large reference laboratories, specialty laboratory providers, manufacturers, and pharmaceutical companies. Its mission is to increase commercial payer coverage of comprehensive genomic profiling by engaging directly with U.S. payers and educating on the value the assay brings to the health care system. While we’ve seen great progress in coverage in recent months, there is more work to be done for more equitable access. Insurance companies historically cover single-gene testing. If you add up several FISH tests in a row, they will end up paying more than $2,000 for a typical FISH panel for leukemia, for example. The tipping point comes when you get enough different biomarkers that are medically necessary in each advanced cancer. It becomes obvious when you’re doing five or more single-gene assays that it’s likely above the cost of a CGP, yet the information you’re getting is more limited than a CGP, maybe doesn’t provide all treatment options, and is surely not comprehensive of potential clinical trial enrollment opportunities, which remain recommended care per medical guidelines. If you’re doing two, maybe single-gene testing works, but doing four or five or up to 12, as with non-small cell lung cancer, the tipping point is to pay for the comprehensive testing.

Jeremy, I’m assuming part of the increasing interest in adopting this more widely, including with a Medicare administrative contractor, for example, is a greater recognition by clinical colleagues that this is the desirable route based on their understanding of the diseases.
Dr. Segal (University of Chicago): Yes. It’s also easier. From a workflow standpoint it’s easier to have every patient go through the same process than it is to figure out which individual tests you’re going to order on different groups of patients, and how you organize that. Also, running multiple tests on a single patient may not be possible. If you’re talking about single-gene testing and you have to do four different tests—we often have small biopsies, and that doesn’t work. With minimal tissue, you want to get the most out of a single DNA extraction, and running a comprehensive test is far better for that. It wouldn’t be possible to run many of our tests in that divided fashion. Even if the individual tests existed, some of the genes are tumor specific and there is no single-gene test. Developing all those tests would be an enormous challenge.

Jeremy, you were invited to give the Nathan Kaufman Timely Topics Lecture at the USCAP annual meeting. Give us a few takeout points you wanted to get across when you gave that lecture.
Dr. Segal (University of Chicago): The basic purpose of the lecture was to go over the history of our multi-institutional consortium. The early pattern in next-gen development and academic centers was that everybody was working independently and competing with one another—who can bring on the first panel, who can do it quicker, whose panel is bigger. It’s a lot of redundant effort and it slowed us down. Since starting to build the GOAL consortium, we’ve seen a change in the way people work—more cooperation between centers and co-development, and communal work on bioinformatics and software development, et cetera. By lowering barriers and encouraging cooperation, we’ve seen our labs increase the pace of development and the quality of the assays they’re bringing on. So the intention was to show what we’ve been doing, what we’re working on, and to encourage people in other areas of pathology to think the same way—as academics, we’re all on the same team and it’s worthwhile for us to figure out how we can work together. We’ll be better off for it.

Fiona, do you also see greater unity in the field now?
Fiona Nohilly (Illumina): Yes. It’s necessary for us to help bring those folks together who are within an academic medical center, as an example, because there’s power in being able to consolidate across one platform, whether that’s within oncology or working across different areas. We see a benefit for our instruments to have utility for multiple types of assays and within different departments.

Sohaib Qureshi, where do we stand now on the bioinformatics component of NGS? It’s one of the bigger fears some labs have as they consider this, thinking, We know how to run a machine, we can buy reagents, validate runs of almost any process, but the bioinformatics intimidates us.

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