Genetic Testing: Major Opportunity, Major Problems

Whether a person is likely to develop diabetes, cancer, schizophrenia, or stroke will be reasonably well predicted, and tests can also determine whether a patient will respond to a given therapy. That’s the good part.

At GHI in New York City, Chief Medical Officer Maria Lopes, MD, is asked to authorize payment for an investigational genetic test that would tell an asymptomatic woman in her 30s with a family history of Alzheimer’s disease if she has a biochemical marker for the disease. What is the decision? “We approve tests if they can make a difference in the outcome of the patient’s condition. Unfortunately, the test results in this case will not determine treatment options for this asymptomatic patient. If the woman is in an approved clinical study, then the testing will be authorized.”

A 15-month-old boy is not walking yet and there’s a “funny” look to his ears. He is below the tenth percentile for height and weight for his age. Great-West Health Care Medical Director Zachary Finkelberg, MD, whose office is in New Jersey, has to rule on several scattershot genetic tests that could cost $1,500. He denies coverage. “It can’t be a fishing expedition.”

Derek van Amerongen, MD, medical director at Humana of Ohio, receives a request for genetic testing of a 10-year-old and his family members. The child is suspected of having a neurological condition that experts have not been able to pin down. He has ADHD, some seizure activity, and birth deformities. Van Amerongen approves three gene exams at a cost of $4,000 for Fragile X syndrome. “This is the role genetic testing should play — when all else has been eliminated,” van Amerongen says.

Across America, physician executives are coping with an escalating demand for testing of inherited conditions. “Over the past three years, we’ve seen a rise in cost trends for genetic testing that is about two times that of overall medical cost trends,” says Joanne Armstrong, MD, senior medical director at Aetna in Houston. “In real dollars, it is less than 1 percent of total medical costs, but this is still in its infancy.” Adds Great-West’s Finkelberg: “It’s not a tidal wave yet but I think it has the potential to become one.”

From a blood sample, tissue or swab from inside the mouth, genetic tests scan DNA, RNA, chromosomes, proteins, or certain metabolites to detect mutations that are likely to cause a specific disease or condition. They reveal whether you have inherited normal or mutated genes, predict the possibility of future illness, confirm or deny suspected diagnoses, and anticipate the adverse effects of medications. The tests also detect the presence of a carrier in an unaffected individual whose children may be at risk: sickle cell and Tay Sachs, for example.

Long-established prenatal testing of pregnant women alerts parents to Down syndrome. In newborns, tests for genetic conditions like phenylketonuria are routinely performed in the hope that early identification and treatment can prevent future disabilities. Preimplantation genetic diagnosis (PGD) looks for genetic flaws in embryos used for in vitro fertilization. Among the newest tests is the NOTCH3 CADASIL that predicts predisposition for a genetic neurological disease that causes stroke and dementia.

When GeneTests, supported by the National Institutes of Health, started tracking laboratories providing genetic tests in 1993, there were 110 disease tests available, says Roberta Pagon, MD, GeneTests’ principal investigator. Today there are about 1,000. They include tests for rare conditions such as Prader-Willi/Angelman syndrome, found in children with severe developmental delays. Still, more than 4,000 diseases are known to be genetic and heritable. Tests cost from $50 for a panel of cystic fibrosis mutations to $3,100 for testing one of those genes associated with a high risk of breast cancer.

Test development accelerated significantly in 2003 at the completion of the $3 billion Human Genome Project, a 13-year international collaboration. The U.S. Department of Energy, the NIH laboratories, and labs in other nations cooperated to unravel 99 percent of an estimated 25,000 human genes with 99.99 percent accuracy. Sequencing results were then made available to researchers.

“Knowledge of the human genome sequence, coupled with the speed and power of computer programs, allows investigators to analyze the relationship between DNA markers,” Pagon says. As new gene identifications continue to emerge from the Human Genome Project, the number of genetic tests is expected to grow exponentially. “Today gene discoveries are published as letters to the editor. Fifteen years ago, they would have been the lead stories in scientific journals,” Pagon says.

The diagnostic potential will reel in physicians. Doctors who embraced computed tomography and magnetic resonance imaging as vital diagnostic tools a few years ago can be counted upon to react similarly to genetic tests. Consumer demand could ratchet up test requests as more tests become available and they are widely applied.

Direct-to-consumer advertising, no doubt, will increase interest in the tests and in insurance coverage. Patients may ask their physicians to screen them for certain diseases so they can take preventive measures earlier in life or rethink reproductive plans and choices.

“It will be on the nightly news and people will say to their doctors, ‘I want the full Monty,'” says the author and health care futurist Ian Morrison.

Genetic testing as part of patient diagnosis for prescribing and monitoring will be as common and as accepted as blood pressure cuffs are today, according to a 2005 PricewaterhouseCoopers report on personalized medicine.

“By 2030, comprehensive, genomics-based health care will become the norm,” Francis Collins, MD, PhD, director of the National Human Genome Research Institute of the National Institutes of Health, told a Senate appropriations subcommittee. Aetna’s Armstrong adds, “Our vision is that genetics will be incorporated into the routine delivery of health care.”

$1,000 sequencing — soon

Full human genome sequencing, requiring a confluence of the fields of molecular biology, chemistry, biochemistry, physics, engineering, and computer science, costs about $10 million. But the race is on to make it affordable at $1,000. Cheap testing would be a medical breakthrough similar to the discovery and use of X-rays, according to Paul Billings MD, PhD, a senior geneticist with Laboratory Corp. of America. “Dramatic reductions in sequencing cost will lead to very different approaches to biomedical research and will eventually revolutionize the practice of medicine,” reports NIH’s Collins.

Newborns could be sent home from hospitals with instruction manuals, advising parents of the potential for illness so they can intervene with reduced sun exposure, special diet, and exercise plans. Like vaccination records, a person’s decoded genome could become part of a permanent medical record.

The $1,000 sequencing is only three to five years off for a research-quality test, not necessarily one for clinical use, which requires greater reliability and proven utility, LabCorp’s Billings says. Other authorities, such as Collins, also expect sequencing to be available in about five years.

As a powerful financial incentive to research scientists, Xprize Foundation, the same not-for-profit organization that paid $10 million in 2004 to two men who created a three-person space vehicle, is offering $5 million to $20 million to the first team to completely decode the DNA of 100 or more people in a matter of weeks. (The offer was made in October.) The deadline is in seven years. Also, the NIH announced in 2004 and 2005 a total of $70 million in grants to sequence a mammal-sized genome initially for $100,000 and ultimately for $1,000 in two or three years

Payers are reluctant to attach much significance to the prospect. Says Alan Rosenberg, MD, WellPoint’s vice president for medical policy and technology assessment: “While testing of the total human genome represents a tremendous theoretical opportunity, there is no clinical literature to back its effectiveness in changing outcomes at this time.” Humana’s Van Amerongen likens genome sequencing to the bygone fascination with head-to-toe CT scans. “They weren’t telling people anything of value and patients were receiving the radiation equivalent of 500 times that of a single chest X-ray.” Though it may be a great research tool, it will take time for the technology to become clinically useful.

Who picks up the tab?

The 800-pound gorilla in the room is always this: Who is going to foot the bill for these emerging developments? “I don’t think insurance companies should pay for your genealogy — profiling for the medically curious if there is no clinical need, no presence of a problem,” says Morrison, the futurist.

Some payers have established coverage policies. Great-West’s Finkelberg approves genetic tests based on four criteria:

  • If there is a clinical basis for suspecting that the patient could have the disease for which he or she is being tested,
  • If the test is validated and reviewed by peers,
  • If a treatment is available that can be offered if the test is positive, and,
  • If the patient undergoes genetic counseling so that he understands how to evaluate results.

Patients need to be advised that a predisposition does not mean that they will develop the disease. Though one may carry a gene that makes him susceptible to lung cancer, if he avoids smoking, he may never develop the disease. But with other diseases, such as Huntington’s, carriers receive a lethal gene. The disease will manifest itself regardless of environmental factors.

Most of the 1,000 genetic tests available, like the SOD1 test for Lou Gehrig’s disease, do not have associated therapies. Therefore, WellPoint and other carriers will not approve the tests. Still, patients may want to know for planning purposes.

GeneTest’s Pagon says that even if there is no current therapy, testing has value. “The tests resolve the diagnostic odyssey,” she says. “People can spend huge amounts of money doing a range of tests, seeing a lot of physicians trying to get to a diagnosis. And health care payers can save a lot of money on excess tests and specialists. You can’t begin to design a treatment without a diagnosis.”

Aetna, UnitedHealth, and Kaiser often pay for genetic tests that identify high-risk populations and where they can significantly lower that risk. For example, a positive result on a BRCA1 or 2 test for breast/ovarian cancer means a patient has up to an 85 percent chance of developing breast cancer, and up to a 55 percent chance of developing ovarian cancer during the course of her life. The tests were introduced in the mid-1990s and have become an oncology standard.

One $3,100 breast cancer-screening test on a woman with a family history of the disease can potentially save $100,000 in the cost of caring for her after a diagnosis. Tamoxifen given prophylactically to asymptomatic women who have markers for the disease is effective in half of all patients. Other treatment options include increased surveillance and mastectomy.

Often it is difficult to track what tests are being covered. Insurers may be covering genetic tests without realizing what the test is actually testing for because the CPT code book doesn’t offer enough specificity, says Thomas Morrow, MD, president of the National Association of Managed Care Physicians and author of Tomorrow’s Medicine, a column in this publication. “Many insurers are paying because systems are not sophisticated enough to differentiate testing.”

The lion’s share of genetic tests are “home brew,” that is, they are developed by laboratories and do not require Food and Drug Administration approval. Those are regulated by the Clinical Laboratory Improvement Amendment of 1988 (CLIA). Less than 1 percent of tests, only those sold as kits, are approved by the FDA. The agency expects this number to grow.

Rx and genetics

A limited number of FDA-approved tests that have medical interventions are associated with pharmacogenomics, a developing science that uses genetic tests to predict response to therapy, then allows doctors to target medications. In a 2005 report, PricewaterhouseCoopers calls pharmacogenomics the next medical revolution, beyond antibiotics, painkillers, and vaccines. The quality movement could get a boost from the field because tests could facilitate fewer episodes of ineffective care or errors.

The basis for pharmacogenomics is the realization that when drugmakers market a product, it may be intended as a one-size-fits-all solution, but it may be ineffective in large numbers of recipients. “Many of our best drugs, new and old, are successful in treating complex diseases at rates of only 40 percent to 70 percent,” writes Wolfgang Sadee in a 2005 issue of Molecular Interventions. Sadee, director of the pharmacogenomics program at Ohio State University, adds that this is especially true for antidepressants and antipsychotics, some of which take as long as eight weeks to take effect — if patients are responsive. Failure to treat a first episode of psychosis successfully can have lifelong deleterious consequences, he says.

Drugs do not differentiate among patients who are high responders, poor responders, and nonresponders. Nonresponders are at risk for adverse drug events because of the way they metabolize drugs. Data on human genetic variation can be used to pinpoint genes responsible for the wide variability in patient responses to many common drugs.

“We may find out with a simple $30 test that any drug — for example, Lipitor — is irrelevant because of your genetic makeup,” Morrison says.

Among the FDA-approved pharmacogenomic tests are those for use with the cancer drugs Herceptin, Gleevac, and Erbetux. The classic tests covered by most insurers are the $200-$540 Her2/neu tests that predict response to Herceptin for metastatic breast cancer, approved in 1998. Because of Herceptin’s potentially adverse effects, the tests reduce the number of patients that would receive it to those who prove receptive, saving critical time and money.

The FDA may also suggest through package labeling that certain genetic tests be performed for patient receptivity before dispensing. One is the $400 TPMT test for off-label use of Imuran and Purinethol in the treatment of Crohn’s disease, ulcerative colitis, and irritable bowel syndrome. The drugs are fatal in 1 in 300 cases. Still another is the $150 genetic test UGT1A1, a test for the metabolism of irinotecan, a commonly prescribed treatment for advanced colon and rectal cancer. Irinotecan can cause dangerous or lethal reactions in up to 30 percent of recipients.

Many tests are under development. Warfarin, the blood thinner for heart disease patients, can take up to three months to titrate correct dosage level through trial and error. A test under $250 from Gentris is expected to become available to physicians next year.

Pharmacogenomics can prove exceedingly cost effective. Aetna, for example, recently determined that for 2005, it saved $4 million by requiring physicians to provide hepatitis C viral genotyping information on 2,200 patients. The testing helped to guide pegylated interferon therapy, revealing those who need it for abbreviated periods and some who will not respond at all. Coupled with a disease management program, “We were able to shorten the time of therapy for some,” says Aetna’s Armstrong. Pegylated interferon has serious side effects that frequently cause patients to stop taking it.

Sadee, the Ohio State professor, believes that in the absence of overt symptoms for hypertension or coronary artery disease, patients genetically predisposed to those conditions could receive low doses of medication, just as low-dose aspirin is effective in keeping stroke and heart problems at bay. “In a person with a biomarker for hypertension, we can start treatment 10 to 15 years sooner,” he says. “And we may make better use of drugs already available instead of developing new ones.”

Drugmakers and carriers are lining up in support of genetic testing. “A small investment in testing today can prevent or mitigate human suffering, while saving on health care costs in the future,” recently retired Aetna CEO John Rowe, MD, told a group of New York medical and dental students in 2002.

One group in the personalized medicine movement is the Personalized Medicine Coalition, whose board is composed of executives of some of the world’s largest drugmakers: Abbott Laboratories, Amgen, AstraZeneca Pharmaceutics, Pfizer, and the drug industry trade group PhRMA. PMC’s president, chairman, and cofounder is J. Brian Munroe, vice president for federal affairs at WellPoint. The motto of the personalized medicine movement is providing the right drug for the right person at the right dose at the right time.

(Ed Abrahams, PhD, executive director of the PMC, says that the organization’s board “is not dominated by the pharmaceutical industry.” While five board members come from the pharmaceutical industry, 13 come “from other sectors with an interest in personalized medicine, including the payers, one of whom, as noted, is the president of PMC. The board also includes patients, research centers, think centers, diagnostic companies, and IT companies, among others.”)

Putting the brakes on testing

One vital concern could potentially inhibit the uptick in genetic test requests — discrimination. “There is going to be genetic discrimination in the same way there is discrimination against people with poorer health now,” says Morrison.

Patients fearful that positive results for diseases will find their way into the hands of their employers or of their health/life and disability carriers may choose to forego the exams, even if recommended by a physician. A bad gene report could affect school admissions, contracting, job attainment, retention and promotions, the ability to obtain insurance, and premium quotations.

“If genetic tests are as predictive as we think they will be, it will make it difficult to obtain coverage,” Ohio State’s Sadee says. “If insurers know they can reduce their exposure, they can exclude coverage for those conditions for which someone is predisposed.”

More than a third of genetics counselors interviewed said discrimination was a major barrier to testing, according to a study published in 2000 in the Journal of Law, Medicine and Ethics. Large numbers of clients declined testing primarily for this reason. The greatest concern was health insurance, although other forms of insurance as well as employment concerns were considered.

Several publicized cases illustrate the possibilities. In 2002, for example, the largest railroad company in the United States, Burlington Northern Santa Fe, paid $2.2 million to 36 of its workers to settle charges from the Equal Employment Opportunity Commission that it violated the 1990 Americans With Disabilities Act. After the employees claimed they had carpel tunnel syndrome, Burlington tested them to see if they carried a gene for the condition. The company felt obligated to determine whether the injuries were related to work or the employees were predisposed to the syndrome.

In 2000, Lawrence Berkeley National Lab settled with the federal government for violating the right to privacy of employees by genetically testing them without their knowledge or consent for sickle cell anemia as well as for venereal disease and pregnancy.

Starting in the early 1990s, states began passing laws prohibiting genetic discrimination in health care and employment. Presidents Bill Clinton and George W. Bush advocated antidiscrimination legislation. Today, 46 states have some laws pertaining to the use of genetic information, but the laws vary substantially.

Colorado’s law prevents insurers from establishing rules for eligibility based on genetic information, forbids requirements for genetic testing, and forbids use of genetic information for risk selection or classification. Nebraska’s law merely restricts insurers from requiring genetic tests or information.Proponents argue that federal legislation is essential. It’s come up several times but has not passed either houses of Congress.

While HIPAA provides federal protections against genetic discrimination in health insurance — patients may not be excluded from coverage — it does not prohibit insurers from charging higher premiums. In addition, HIPAA doesn’t prevent insurers from requiring applicants to undergo genetic testing, nor does it limit insurers from collecting genetic information.

As a result, patients sometimes pay for genetic testing out of pocket, rather than submit a claim to their health insurance company, according to a Rhode Island Department of Health report titled “Genetic Discrimination and Rhode Island Policy.” Some people are so troubled by the potential misuse of test results that they will not only pay out-of-pocket, but will send their samples to testing companies under false names.

Such practices would have a devastating effect on insurance. Fraud potential would be greater if results were available only to patients who chose to keep them secret. “Patients can take out a huge amount of insurance if they have a probability of popping off,” says Morrison.

Some patients whose genetic tests find them free from disease may see that as a green light to practice unhealthy behavior. “What you really want to know is that you can smoke, drink, and eat cheeseburgers until you fall over,” Morrison says. “These tests won’t give you that — only the probability.”

Just as some people decline to know the gender of their children in utero, some may not want to know the hand that life has dealt them. “Do you really want to know if you are going to develop Lou Gehrig’s disease? It’s fatal,” says Ray Mummery, MD, medical director at Dimension, a South Florida health plan.

On the other hand, employers and carriers need this information to determine whether to promote an employee and to make accurate classifications to keep health costs down. Does a specific genetic marker count as a pre-existing condition? What are the legal implications if a payer declines payment for a test? “Doctors who fail to offer tests that have some treatments associated with them could face potential liability issues if the treatment could have altered the prognosis,” suggests Peter Gurk, MD, medical director at Bluegrass Family Health. Ethical, social, cultural, and legal issues will not be resolved easily.

One controversial issue is the accuracy of results and the potential for false positives and false negatives. Analyzing tests is tricky. Human genomes are 99.9 percent identical. It’s the 0.1 percent differences that determine whether you are dark or fair-haired or will get heart disease. Get a single base pair wrong and a patient may conclude that she is about to die of a hereditary disease. Misidentification of samples, contamination of the chemicals used for testing, or other factors could cause results to be tainted.

“In the early stages of technology, there are huge variations in testing,” Morrison says. “Once there are certain calibrations and control measures, certain unevenness is removed.”

Beyond testing is the next frontier: Gene therapy — exchanging bad genes for good ones — is available only through research. Clinical trials have not gone well. For instance, Jesse Gelsinger died in 1999 as a result of gene transfer. Gelsinger suffered from a disorder called partial ornithine transcarbamylase deficiency, in which toxic levels of ammonia were present in his blood. His disease was under control but he wanted to help others by participating in a clinical trial at the University of Pennsylvania. “Gene therapy is theoretically possible, but not feasible, at the moment,” Ohio State’s Sadee says.


Genomics — Studies the makeup of an individual’s whole hereditary information that is set at conception and remains the same through life.

Proteomics — Focuses on the proteins (within the cell) that can be altered by health, environment, and other physical changes.

Pharmacogenomics — Applies genomics and proteomic findings to determine how individual genetic characteristics interact and respond to different drugs. Enables development of precisely targeted therapies to be administered based on a patient’s genetic makeup, not his or her symptoms.

From PricewaterhouseCoopers 2005 report: “Personalized Medicine — The Emerging Pharmacogenomics Revolution,” and others

Roll over, Beethoven — your genetic profile’s in

“Welcome, Herr Beethoven. As the human resources director of the Vienna Orchestra, I have been honored to meet many talented applicants for the position of apprentice composer. Your aptitude tests show you to be one of the most gifted young people we have seen in many seasons.”

“Thank you, Maestro.”

“Your audition impressed the selection committee. Composing would have been an excellent career for you.”

“What do you mean, ‘would have been,’ Maestro?”

“Young man, I’m afraid I am the bearer of unhappy news. You see, we have also reviewed your pre-employment health appraisal.”

“I assure you, Maestro, I never inhaled — ”

“No, my boy. I’m talking about your genetic profile. I am profoundly sorry to inform you that you are beginning to lose your hearing. Our analysis shows that you will be significantly deaf before you are 30 years old. Obviously, this predisposition makes you quite unsuited to a career in music.”

“Mein Gott!”

“I regret that there is nothing we can do but steer you toward another career. I can offer you a position in our complaint department.”

“But Maestro, wouldn’t deafness put me at a disadvantage there, also?”

“Actually, it’s an advantage.”

“Maestro, I hesitate to question a policy which has obviously been rigorously evaluated. But how reliable are your data? After all, there are many paths my future could take, despite a predisposition to chronic disease. For example, a therapy might be discovered at any moment that would make this risk irrelevant. And don’t environmental factors mitigate genetic risk? The average person carries half a dozen lethal genes, which are rarely expressed.”

“Good points, young man. True, we’re working from indirect evidence. But it only makes sense — from a risk management standpoint — to avoid employees with known health risks. We can’t say which employee will become ill on a given day. But, over time, statistical projections are reliable.”

It’s a novelty

“But, Maestro, connections between genetic data and workplace performance are extremely tenuous. There are thousands of other factors. You mustn’t put disproportionate emphasis on one item simply because of its novelty.”

“We must flow with the times, son. Imagine if we didn’t inquire into employees’ health status. We might be exposed to liability for not knowing something that someone claimed we should have known. Suppose you had a genetic predisposition to carpal tunnel syndrome? We couldn’t let you play the piano all day. You might hold us liable for a disability we should have foreseen.”

“Shouldn’t I be able to choose one job over another that might be ‘safer’ for me? Other people take jobs that expose them to heavy machinery, stressful hours, and bad weather. You simply have to pay people more, to accept more risk.”

“Salary is based on many factors besides risk. And, why should we pay you more for taking a risk for yourself that isn’t so risky for someone else?

For example, we don’t allow pregnant women to work around wood polish fumes. Doing monthly pregnancy tests on our female violin polishers is costly, but it protects us from some potential liability for birth defects.”

“But employers aren’t entitled to know something as private as that! And a connection between wood polish and birth defects has never been shown!”

Someone has to pay

“Of course not! But the courts aren’t about to wait for real evidence in these high-profile cases with so many people clamoring for compensation.”

“Still, genetics is only one factor in disability. And disability itself has a complex relationship to work performance. Injuries and nongenetic illnesses cause much more lost work time than inherited disorders.”

“That may be true. But we are a self-insured company. Budgets are tight. Anything that gains us economic efficiency will help us survive into the future.

If we can eliminate applicants who might tend to raise our costs — either in health care or other categories — we’ll have an advantage over other orchestras that don’t screen.”

“Everyone but the ones screened out.”

“What was that? Speak up, young man! I’m getting along in years, you know.”

“I meant, sir, that every orchestra — every organization including insurance companies — currently pays for genetic illnesses in the normal course of doing business. The costs are already built into the economy.

Right now, they’re spread around pretty randomly. If we simply outlawed genetic discrimination, then total costs wouldn’t change.

And we could all continue to work merrily along, with any costs attributable to our genetic conditions submerged in the background of all health costs.”

“You’re partly right, but don’t be naïve. Overt screening isn’t the only issue.

Preventing covert genetic discrimination is far more difficult. Isn’t it better to announce up front that we follow a screening policy, rather than to base decisions on subjective factors like ‘managerial discretion?’

For example, everyone knows your father is an alcoholic.”

“I beg your pardon!”

“I didn’t learn this through a violation of your privacy. My friend Hans was with your father a few weeks ago, and your father confessed it to him. You can’t blame me for something that’s public knowledge.”

“Still, I think I shouldn’t have to suffer from predictions based on incomplete, or invalid, or prejudicial information.”

“I’m very sorry. We’ve decided to offer the position to Wolfgang Amadeus Mozart.

He’s just 34 years old, with a sparkling genetic pedigree and doubtless a long, illustrious career ahead of him.

“Unfortunately, Herr Beethoven, you are simply not destined for a life of music.”

Reprinted from the June 2000 issue of Managed Care.