Dive Brief:

• The Centers for Medicare and Medicaid Services has added two indications to its coverage of Natera’s molecular residual disease (MRD) cancer test.
• Natera has met the Molecular Diagnostics Services Program coverage requirements for ovarian cancer in adjuvant and surveillance settings and for breast cancer in the neoadjuvant setting.
• Recently approved state biomarker laws may magnify the impact of expanded Medicare coverage by requiring commercial insurers to pay for products covered by the CMS, Natera CEO Steve Chapman told investors at the J.P. Morgan Healthcare Conference in San Francisco last month.

Dive Insight:

The test, which is called Signatera, uses circulating tumor DNA (ctDNA) to detect and quantify cancer. By tracking changes in ctDNA, Natera aims to show if a patient is responding to neoadjuvant therapy given to shrink a tumor before it is removed surgically and then detect the recurrence of cancer early to enable timely treatment.

Chapman cited the “strong ramp” in Signatera sales as a driver of the 38% revenue growth that Natera reported in its preliminary fourth-quarter results. The company reported preliminary revenue of about $300 million in the quarter.

The expanded Medicare coverage provides Natera with additional opportunities to grow Signatera sales. In ovarian cancer, Natera secured adjuvant and surveillance coverage after showing its test detected cancer recurrence with 100% sensitivity and specificity in a blinded, multi-site study of 69 patients. Signatera caught relapses 10 months before they were detected by imaging, on average.

Natera’s breast cancer coverage supports the use of Signatera in the neoadjuvant setting in all subtypes of the disease. Most patients receive chemotherapy as an adjuvant treatment after surgery, rather than in the pre-procedure, neoadjuvant setting. However, researchers tracked significant increases in the use of neoadjuvant chemotherapy from 2010 to 2015.

The CMS extended coverage of Signatera to the neoadjuvant breast cancer setting after Natera showed early, pre-surgery clearance of ctDNA predicted therapy response. The study looked at HER2-negative breast cancer, but the CMS decision covers all subtypes of the disease.

Natera already has coverage in indications including colorectal cancer, muscle-invasive bladder cancer and pan-cancer immunotherapy response monitoring. As well as granting Natera access to Medicare beneficiaries, those coverage decisions are increasingly supporting its ambitions to grow revenues from commercial payers. 

Last month, Chapman said biomarker laws that state, “if Medicare covers the test, the commercial payers have to cover the test” now apply to more than half of the U.S. population. The CEO outlined what that could mean for Natera. 

“Sixty percent of our Signatera volume is commercial. Largely, we're not getting paid on that volume today,” Chapman said. “We could see the [average selling price] double. Now, we're not putting that in our model. We're talking about a $100 increase or something in that range. But there is this enormous opportunity. We're just being conservative because we haven't seen this play out before, nobody has.”