Life Sciences Blog

Who’s paying for precision medicine? A look at molecular diagnostic commissioning policy in the UK




In the wake of the publication of the report of Lord Warner’s Specialised Services Commission, it seems an apt time to reflect on commissioning arrangements within England’s National Health Service (NHS). As we have written about in the past, commissioning structures in the UK – and specialised services in particular – are no stranger to change. The Health and Social Care Act 2012, which replaced the Primary Care Trust-oriented framework with the new Clinical Commissioning Groups (CCGs) system, also handed a set of responsibilities over to NHS England, among them commissioning of primary care and specialised services, including for rare diseases and other areas such as chemotherapy and systemic oncology medicines.

Following our recent research on how various countries are positioned for precision medicine, publication of this new report brought to mind some of the challenges facing the NHS commissioning framework for molecular diagnostic testing – a relatively fast-moving area with significant implications for how healthcare systems can adapt to the precision medicine opportunity.   

A system oftentimes “as clear as mud”

A large share of molecular diagnostic testing within the NHS falls within the domain of pathology services, often provided by laboratories located within hospital trusts. Historically, these labs developed in order to provide commonly requested tests and a handful of more specialist ones for patients onsite. Over time, labs in different hospitals developed informal regional networks, allowing them to develop some degree of specialisation and refer samples to each other where appropriate. 

One of the barriers to uptake of precision medicine in the UK relates to the historic lack of resources and expertise for molecular diagnostic testing. For the first wave of targeted therapies seen in oncology, this meant that there was only a limited number of labs providing these services within the NHS at the time of their introduction. As a result, regional referral networks to early-mover labs with these capabilities (typically situated within some of the larger research and teaching hospitals) have developed over time.

This has required that the originating hospitals agree funding arrangements with the labs providing the actual tests, creating the need for the former to find ways to absorb these costs. In this sense, the NHS has lacked standardised funding arrangements to ensure patient access to testing in the secondary-care sector. As opined by one stakeholder interviewed in the course of our research, the NHS commissioning framework for molecular testing can be “as clear as mud.”

The matter has been further complicated for testing in oncology by the fact that, from 2013, following the broader organisational reforms, NHS England has taken over commissioning of chemotherapy and systemic anti-cancer treatments. While broader care pathways are funded by CCGs through Payment by Results tariffs, the costs of these drugs, their administration, and their associated biomarker testing, are in theory reimbursed by NHS England.

However, our research has revealed there is not really a settled view on how this should operate in practice. What is more, this depends on the nature of the test, with NHS England potentially covering genetic testing but not immunohistochemistry services, which tend to be seen as traditional tests falling under the remit of CCGs. For example, HER2 testing is typically performed within hospital pathology services and the bill charged to CCGs. As another example, for ALK testing in non-small cell-lung cancer, one manufacturer of an associated therapy provided testing for free. Because it was an immunohistochemistry test, there was a question over whether that should fall within the scope of genetic testing, which is what NHS England has historically covered.

Commissioning policy for specialised services makes clear that NHS England will consider separate funding for molecular testing in oncology, and that management arrangements for its introduction will be considered on a case-by-case basis in the context of discussion with manufacturers and other relevant stakeholders. 

For oncology treatments which have not yet undergone NICE review or received a negative NICE appraisal, the Cancer Drugs Fund (CDF) is a potential source of funding for associated molecular diagnostic testing. The CDF manual states that:

Molecular diagnostic testing, which is necessary to help optimally target the use of drugs to patients who are most likely to benefit, is funded through routine commissioning arrangements. However, in exceptional circumstances, the CDF may be used to fund these tests where it is deemed appropriate to provide funding outside existing mechanisms. Therefore the management arrangements for the introduction of molecular tests for a cohort of patients potentially eligible for the specific targeted drug could be considered for CDF funding following discussion with the key stakeholders, including the relevant pharmaceutical company. In such circumstances, the costs will be picked up by the CDF, including the costs of “negative” tests.

However, our research has confirmed that CDF funding for diagnostic testing is not consistently applied. For example, some trusts are known to have secured CDF funding for EGFR testing early on, whereas others only belatedly began to explore this option.

The direction of commissioning policy

The upshot of this situation has been that some manufacturers choose to fund biomarker testing themselves upon introduction of targeted therapy into the NHS. However, this strategy may become less relevant for molecular testing which relies on genetic sequencing as a result of moves made by NHS England to develop a new commissioning framework. NHS England has released the associated draft service specification for new NHS Genomic Laboratory Services.

The aims and objectives of the service are to drive economics of scale, quality, standardisation and cost improvement; reduce variation in access to testing; optimise emerging techniques such as exome and whole genome sequencing; and capitalise on the output of the 100,000 Genomes Project.

The proposed model of future service provision relies on a tiered structure:

  • Genomics England Sequencing Centre (GESC) – Currently, Genomics England is responsible for contracting for sequencing to support the 100,000 Genomes Project; the intent is that it will go on to provide a resource for whole-genome sequencing for NHS patients.
  • Genomics Central Laboratory Hubs (GCLH) – The intent is for these to be formed from the consolidation of existing specialist genetic laboratories and, with varying degrees of specialisation, to be the core of the new service, together delivering the full range of molecular and cytogenetic techniques plus validation and interpretation of complex genome analysis
  • Genomics Local Laboratory Hubs (GLLH) – Formed from existing molecular pathology laboratories, these will focus on local provision of rapid testing across a broad range of pathology services.

The service scope will include inherited disorders, sporadic genetic disorders, acquired disorders (including most cancers), and stratified medicine involving genomic profiling for all conditions. It will exclude molecular sequencing of pathogens, tissue typing, histopathology, and cytopathology not using genomic technologies (e.g. immunochemistry, routine testing such as HER2 and ALK integrated with histological examination), new-born screening, biochemical antenatal screening, and immunological tests that are not for single-gene disorders. GCLHs will focus on translational research and are also expected to validate molecular technologies that will be used for point-of-care testing in the NHS.

With regards to oncology specifically, changes to the CDF will also have an impact on molecular testing. In particular, the increasingly dynamic management of the fund may be accompanied by opportunities for manufacturers to negotiate on cost, including the role of testing. As a consequence, the more general shift away from manufacturer-funded testing to the proposed NHS Genomic Laboratory Services may not be applicable to high-cost oncology medicines where these rely on their own test kits.

report issued by Cancer Research UK in August 2015 has highlighted the shortfall in molecular diagnostic testing associated with targeted therapies for solid tumours in England. Based on cancer incidence data and extrapolation of BRAF, KRAS, EGFR and ALK testing rates from a survey of labs, the charity estimates that in 2014, 15,929 patients missed out on molecular diagnostic testing, because of either lack of funding or lack of awareness. Based on mutation rates, this translates into an estimated 3,552 patients who may have otherwise been eligible for targeted therapies.

The extent of this gap in provision highlights the significant access challenges still operating within the UK, and draws attention to the importance of elaborating a transparent and consistent commissioning policy for molecular diagnostic testing.

More information on our recent multi-client study, Pathways to precision medicine: Navigating payer needs and healthcare systems through molecular diagnosticsIndividual country chapters of this report including for the UK are also now available for purchase and immediate access on our IHS Online Store.

Cameron Lockwood is the manager of the life sciences EMEA consulting team for IHS
Blog posted 26 May 2016

About The Author

Cameron Lockwood manages the EMEA consulting and multi-client study team. He has a background in the life sciences and specialises in market access and pricing and reimbursement issues.