Review of HTA Frameworks and Decisions for Next-Generation Sequencing in Precision Oncology

By Xcenda

Precision medicine has rapidly evolved in the field of oncology, with therapeutic interventions being specifically selected to target molecular features associated with malignancy. Although cancer genome sequencing is a relatively new endeavor, it already has great potential to impact the clinical care of patients with cancer from diagnosis through treatment. For this reason, it is important to understand the current reimbursement climate for genetic testing within oncology—in particular, next-generation sequencing (NGS).


Review of HTA Frameworks and Decisions for Next-Generation Sequencing in Precision Oncology

By Megan Pollack, PharmD, BCOP, BCPS; Fred Sorenson, MSc; Ken Redekop, PhD; Chelsey Campbell, PharmD, MBA, MS

Date last updated: August 8, 2019

“Not only will genetic tests predict responsiveness to drugs on the market today, but also genetic approaches to disease prevention and treatment will include an expanding array of gene products for use in developing tomorrow’s drug therapies.” – Francis Collins, New England Journal of Medicine, 1999
Precision medicine has rapidly evolved in the field of oncology, with therapeutic interventions being specifically selected to target molecular features associated with malignancy. Although cancer genome sequencing is a relatively new endeavor, it already has great potential to impact the clinical care of patients with cancer from diagnosis through treatment. For this reason, it is important to understand the current reimbursement climate for genetic testing within oncology—in particular, next-generation sequencing (NGS).

Precision Medicine in Oncology

Precision medicine is defined as a healthcare approach with the primary aim of identifying which interventions are likely to be of most benefit to which patients based on features of the individual and their disease. Precision medicine relies on using the characteristics of individuals’ phenotypes and genotypes for tailoring the right therapeutic strategy for the right person at the right time. Much of the success in identifying genes implicated in cancer development, as well as associated prognostic and treatment-related findings, is largely due to technological advances enabling the routine genomic study of tumors. As the numbers of actionable genomic alterations increase, the advances in genomic testing have also significantly evolved over the past several years, becoming both quicker and less costly—thus, allowing more patients to benefit from the results of this testing.
Figure 1. Precision Medicine Guiding Treatment Decision Making in Oncology
Figure 1. Precision Medicine Guiding Treatment Decision Making in Oncology


Advances in Genomic Testing: NGS

Prior to the advent of NGS, DNA sequencing was labor intensive and costly. However, second-generation sequencing technologies, commonly referred to as NGS, have been developed in an effort to enable the routine genomic study of every tumor. NGS allows for rapid and accurate sequencing of many genes at once utilizing either DNA or RNA. For most clinical applications, NGS uses gene panels to sequence only a discrete number of genes of interest, making it less labor intensive than complete DNA or RNA sequencing methods. 

The benefit of NGS technology is that it saves costs compared to multiple, individual nucleic acid-based tests (such as fluorescent in situ hybridization [FISH], polymerase chain reaction [PCR], etc). The small amount of tumor tissue required may also eliminate the need for an additional procedure, such as a repeat biopsy. However, there are limitations associated with NGS technology, including technical complexity and cost in comparison to other testing methodologies, and reimbursement is often restricted. 

Outcomes Evidence Supporting Precision Medicine in Oncology

Precision medicine aims to find patients with targetable oncogenic drivers to provide a therapeutic intervention expected to have greater clinical benefit based on the specific molecular or cellular features of the tumor. Recent studies report precision medicine improves outcomes in patients with actionable alterations for which there is targeted therapy available compared with standard of care chemotherapy or best supportive care. Further, studies have shown as many as 30% to 40% of patients with advanced cancer who undergo tumor genomic profiling have an actionable alteration that can be matched to a Food and Drug Administration (FDA)-approved targeted therapy. Although this advance in technology is leading to novel therapeutic strategies, one question continually being asked is, “Does an ‘actionable alteration’ always yield an important gain in improved outcomes at an acceptable increase in costs?”

Targeted therapy has moved more into the spotlight, as the advantages associated with NGS over other detection technologies have the potential to lift molecular diagnostics in clinical oncology to the next level. However, there is currently a lack of direct evidence linking NGS to improved clinical outcomes in oncology (eg, increased survival). This lack of direct evidence for NGS is a 2-fold problem. First, efficacy and safety outcomes data, including survival endpoints, from randomized controlled trials for precision medicine are not yet mature. Second, since many of these types of studies do not separate out based on methodology used to determine the genetic alteration, there is a need for assessment of individual methodologies in terms of both efficacy and cost.

As NGS technology evolves and becomes further incorporated into routine clinical practice, the need for data on NGS in oncology is becoming evident. One economic study showcased at the American Society of Clinical Oncology Annual Meeting in 2018 assessed the economic impact of NGS vs sequential single-gene testing modalities in patients with metastatic non-small cell lung cancer (NSCLC) in the United States (US). The results of this analysis supported upfront NGS use to establish genomic alteration status for newly diagnosed patients with metastatic NSCLC to inform treatment decisions; the wait times for results were generally shorter, and payer cost was lowest with NGS. 

HTA Frameworks and Decisions for NGS

Health technology assessment (HTA) agencies’ evaluations with precision medicine have so far primarily examined diagnostic and companion diagnostic tests. Several countries have accommodated the additional complexities of evaluating precision medicine tests through new procedures, such as the Diagnostic Assessment Programme at the National Institute for Health and Care Excellence (NICE) in England or the Health Technology Assessment Access Point in Australia. However, the majority of HTAs and payers have not tackled the tough topic of NGS with definitive guidance on use of the technology. 

Several decisions have forced at least partial opinions on NGS to begin to shape the coverage landscape and attitude toward NGS, as shown in the examples below.

  • In 2014, the Canadian Agency for Drugs and Technologies in Health (CADTH) conducted a review of cost-effectiveness and guidelines associated with NGS DNA sequencing technology. CADTH concluded that there is limited evidence to establish the cost-effectiveness of NGS technology and that there were no established standardized guidelines identified. The guidelines that were identified only described high-level recommendations on implementation of the technology, but recommendations for specific applications were lacking. CADTH further concluded that as additional advances are made in NGS development and data analysis, robust protocols will need to be developed to establish clinical methodologies regarding the cost-effectiveness of this technology in clinical practice.
  • NICE has not yet provided overall guidance concerning NGS technology use in oncology broadly, though individual assessments have been made within particular disease states. Take, for example, diagnostic guidance for epidermal growth factor receptor (EGFR) mutation testing in adults with locally advanced or metastatic NSCLC. When this guidance was published in 2013, there was insufficient evidence to make any recommendation on the use of NGS testing for EGFR mutational analysis per the NICE assessment. 
  • In 2018, the US Centers for Medicare & Medicaid Services (CMS) made a coverage determination for NGS technology, stating that it would cover NGS testing for patients with recurrent, relapsed, refractory, metastatic cancer. Additionally, patients with advanced stages III or IV cancer would be covered if the test is FDA approved as a companion diagnostic for that patient’s cancer type only if the NGS test has not previously been used. However, repeat testing would be approved in patients with a new primary cancer diagnosis or in those patients deciding to seek further treatment.
    • Medicare Administrative Contractors (MACs) may determine coverage of other non-FDA-approved companion diagnostic laboratory tests using NGS for patients with cancer only if the above criteria are met.

Ongoing Precision Medicine and NGS Research

Given the lack of evidence around cost-effectiveness and clinical use, it is increasingly important that future studies track efficacy of these targeted therapies. Measures such as overall survival (OS), progression-free survival (PFS), overall response rate (ORR), and other data will be useful for evaluating sequencing-matched therapies’ effect on patient outcomes to inform future treatment and insurance coverage standards. 

Although the data are currently limited, there are several ongoing studies, highlighted below, that may provide more clarity regarding the efficacy of precision medicine, including NGS technology, for oncology patients. These studies aim to learn from the real-world practice of prescribing targeted therapies to patients with advanced cancer whose tumor harbors a genomic variant known to be a drug target or to predict sensitivity to a drug. 

Table 1. Clinical Trials Utilizing Precision Medicine-Based Treatment Approach in Oncology 
Table 1. Clinical Trials Utilizing Precision Medicine-Based Treatment Approach in Oncology

Key: ORR – overall response rate; OS – overall survival; PFS – progression-free survival; TTP – time to progression.


Cost Considerations for NGS

With more efficacy data associated with precision medicine on the horizon, the need for cost data associated with NGS becomes increasingly evident. As there are a multitude of different types of testing technologies available to determine a patient’s potential ability to benefit from targeted therapy, HTA agencies, payers, and policymakers will need to be informed on the most cost-effective strategy to align patients with the correct therapy. As a result, some key questions surrounding costs that stakeholders will need to address with regard to NGS include:

  • How will utilizing NGS affect total healthcare costs?
  • What additional data will manufacturers need to produce to support the pricing of targeted therapies resulting from NGS use?
  • What type of cost-effectiveness measure, cost per life-year gained, or cost per quality-adjusted life-year (QALY)—or a different measure—should be used to capture the value of NGS?
  • How does the cost-effectiveness and value of NGS compare to using a single mutation test?

Gaps in the Current HTA Reviews of NGS

NGS as a diagnostic, prognostic, and therapeutic guidance technology has not been assessed by most HTA agencies to date. The HTAs agencies that have assessed NGS have concluded that there is not enough evidence to support its cost-effectiveness or use in clinical practice. Although CMS has made a coverage determination for NGS, both patients and the NGS test used must meet strict requirements for coverage. Therefore, there is a distinct need for both data supporting NGS technology as well as guidelines for implementation and appropriate use of such technology in clinical practice to guide HTA agencies and policy decision makers in the future.


As the realm of precision medicine within oncology continues to expand, the need for information surrounding the appropriate use and value of genomic alteration testing technology, including NGS, becomes more apparent. While few HTA agencies have addressed NGS technology, this is likely to change as more efficacy data associated with precision medicine become available. What remains to be seen is how this information will help in distinguishing between various types of testing in order for HTA agencies and payers to make decisions regarding the use of various testing strategies within oncology clinical practice. There is a distinct need for comparative data analyzing the cost-effectiveness of the various testing strategies to inform policymaking regarding NGS testing.

For further information about this topic, please also see the article on tumor-agnostic therapy assessment in this issue of HTA Quarterly.



The article should be referenced as follows: 

Pollack M, Sorenson F, Redekop K, Campbell C. Review of HTA Frameworks and Decisions for Next-Generation Sequencing in Precision Oncology. HTA Quarterly. Summer 2019. August 27, 2019.


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