Specialized laboratories are caught in a catch-22. Value-based pricing of tests remains an alluring economic salvation, but in an environment in which reimbursement for previously covered tests is not guaranteed, value-based pricing models are being skeptically examined by payers intent on reining in health care spending. In the recently released white paper, 2013-2014: Evolving Challenges for Value-Priced LDTs, Bruce Quinn M.D., Ph.D., a senior health policy specialist at the law firm Foley Hoag, re-examines the case for value-based pricing nearly 10 years after the influential launch of Oncotype DX (Genomic Health), which has been credited with changing the reimbursement landscape for novel diagnostics. “Working in a field that is dominated by commodity pricing, the value-based model is seen as a panacea by lab industry executives. . . . However, this model requires not only value pricing argumentation on paper, but a market monopoly in practice,” writes Quinn. “My experience in watching the reactions of payer policymakers to value pricing economic models suggests that the value pricing scenario is often viewed by the listener as too artificial.” While heralded as a success, Oncotype DX took six years from the test’s launch for the company to achieve profitability. The hope is that […]