News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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Clinical Laboratories and Pathology Groups

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Gene sequencing for clinical purposes requires more resources, including the costs of experts to interpret data to help pathologists and physicians involved in the case

It was January when headlines nationwide trumpeted Illumina’s introduction of the $1,000 genome. The story in Forbes Magazine, “The $1,000 Genome Arrives—For Real, This Time,” was typical of much of the press coverage.

Because pathology groups and clinical laboratories have much at stake in the race to the $1,000 whole-human genome sequence, it is important to know the real facts about the cost and performance of Illumina’s latest generation of genome sequencing technology. After all, corporate press releases are intentionally designed to present a company’s product in the best possible light.

Illumina’s Biggest Gene Sequencers Each Cost $10 Million

In its story, Forbes Magazine reported that Illumina had already sold three of its HiSeqX Ten machines at a cost of $10 million each and expected to sell at least five such systems during 2014.

One expert who says there is more to this story than what appeared in most media coverage is Katherine Tynan, Ph.D., of Tynan Consulting, LLC, in San Francisco, California. Tynan is a strategic consultant for diagnostics companies.

She said that there is more to the cost of sequencing a human genome than bare-bones cost factors reported in many of the news accounts. In reality, observed Tynan, the current cost of clinical-grade human genome sequencing could be as high as $10,000 with this latest generation of sequencing technology.

Genome Sequencing for Clinical Uses Will Cost More than $1,000

“Illumina’s announcement is exciting for the clinical diagnostics industry, but the cost basis behind the $1,000 genome sequencing stories is not accurate from the perspective of delivering clinical diagnoses,” stated Tynan. “For a research lab to sequence a human genome, the cost may be $1,000. That’s why I have significant concerns about the narrative that the media has developed about this announcement. I am also concerned about how payers may react to this news.”

In its own coverage of Illumina’s announcement, Dark Daily reported on February 21, “When Illumina, a San Diego-based technology company, announced its new HiSeq X Ten genetic-sequencing machine in January 2014, Illumina CEO Jay T. Flatley claimed the company’s system can deliver ‘full-coverage human genome sequences for less than $1,000,’ down from $500 million 10 years ago.”(See Dark Daily, “Illumina Asserts Its Claim of a $1,000 Whole Human Genome, But Is Gene Sequencing Ready for Use by Clinical Pathology Laboratories?” February 21, 2014.)

Sequencing Patients with Heritable Diseases

“Sequencing costs in a research lab are much lower than the total costs a clinical laboratory would incur when sequencing genomes for patients with heritable diseases,” observed Tynan.

“Many payers and most patients do not understand the full range of costs incurred in delivering a clinical report. This includes the overhead of regulated laboratory staff, the informatics infrastructure to interpret the genome, as well as the medically boarded professionals (PhDs & MDs) required to interpret the sequence findings in the context of the clinical presentation.

Katherine-Tynan-PhDFor clinical laboratories and anatomic pathology groups, the goal of the $1,000 whole human genome is still not a reality. That’s the observation of Kathryn Tynan, Ph.D. (pictured), Founder and CEO of Tynan Consulting, LLC, a consulting company that provides strategic consulting services in diagnostics. Tynan says that, when gene sequencing is done for clinical purposes, medical laboratories must add the cost of the scientific expertise required to analyze the results and prepare a report for the referring clinicians. (Photo copyright Kathryn Tynan, Ph.D.)

“It is definitely true that a clinical laboratory incurs substantial costs not born by a research facility,” he continued. “In a clinical lab, a pathologist or a PhD is needed to analyze the results and prepare a report. Such analysis generally requires someone who is board-certified in one of these areas: clinical molecular genetics, medical genetics, or clinical molecular pathology,” Tynan noted.

“These clinicians use software tools—as well as manual research—and a review of the literature when interpreting the data,” she added. “This requires expertise, not limited to knowledge of the patient’s phenotype and family history, extremely current knowledge and exploration of published variant-disease associations, and judgment—to interpret sequence variants in the context of the patient’s clinical presentation. These are highly trained professionals, and all of their work is not inexpensive when doing whole-human genome sequencing in support of clinical care.

High Costs of Interpreting a Whole Genome Analysis

“It is a fact that, today, patients have few opportunities to obtain a whole genome analysis because the interpretation costs are so high,” noted Tynan. “The alternative, then, is to consider exome sequencing, which is limited to most of the protein coding sequences of an individual genome that encompasses 20,000 genes and constitutes approximately 1% of the whole genome.

“The cost of exome analysis today varies widely,” she continued. “It ranges from about $3,000 on the low side to about $13,000 on the high side. This variation is largely attributable to the level of overhead ascribed to these programs at various institutions.

“As a human geneticist with 30 years of experience, I have had my genome sequenced by Illumina and the cost at the time was $5,000,” recalled Tynan. “But I am a healthy individual and don’t need to have it interpreted to look for any particular heritable condition. As a result, the interpretation of a few hundred clinically relevant genes in my data represented a fairly modest workload in terms of interpretation for the lab. It was simpler and easier for the lab to do than if the test was done as part of a diagnostic workup for a patient who has a particular disease or health condition.

‘Clinical Grade’ $1,000 Genome Not Yet Mainstream

“The point I want to make is that the concept of the “clinical-grade,” $1,000 genome is a long way from being mainstream,” she emphasized. “That being said, exomes are being sequenced today in clinical practice and are the preferred test for many heterogeneous heritable conditions. There are thousands of exomes being sequenced in clinical practice in the U.S. every year.

“That is the story newspapers should be writing about,” observed Tynan. “Parents with a child that has a genetic disease of unknown etiology are desperate for a diagnosis so that they can understand the prognosis for their child. That means these parents and patients are likely in the midst of a diagnostic odyssey.

Parents May Spend Up to $25,000 on Genetic Testing

“Patients in these situations are facing multiple diagnostic and genetic tests,” she said. “They and their insurers may be spending an estimated $25,000 or more doing the diagnostic workup for these children.” (See “The Utility of the Traditional Medical Genetics Diagnostic Evaluation in the Context of Next-Generation Sequencing for Undiagnosed Genetic Disorders,” Shashi, et al, Genet Med. 2014 Feb;16(2):176-82.)

“For some 30% of patients (Shashi 2014), medical geneticists are essentially throwing darts at a wall in terms of attempting to define the specific gene are genes involved in their disease,” said Tynan. “These patients are getting a multitude of tests including imaging studies, gene and multi-gene panels. Generally speaking, if more than three tests are ordered, those parents and their insurers are spending in excess of $10,000. That’s a very costly endeavor for parents and payers.

Helping Children with Inheritable Disease

“Seen from that perspective, doing whole-exome analysis would be cost effective for children with inheritable disease where clinicians don’t have a definitive diagnosis that is needed to manage those patients medically,” she explained. “And, in some of these cases, it would just be cheaper to start with an exome analysis.”

Getting back to the news media headlines heralding Illumina’s claim of the $1,000 whole human genome, Tynan had a word of caution. “The point I want to emphasize is that so much is unknown about the real cost of ‘clinical grade’ human genome sequencing at this time. That is why we need to be very careful about putting out misinformation because that helps no one and, in fact, it inhibits the work of clinical laboratories,” she warned. “Clearly, that’s not what we need today.”

These observations demonstrate, once again, how the media often headlines a story, but only offers readers one dimension of  the truth. The fuller context of news events is not presented to the reader. In the case of Illumina’s claim to a $1,000 whole-human genome that may be true for a handful of research companies running high volumes (more than 18,000 specimens per year).

Clinical Laboratories and Pathology Groups Should Stay Informed

But that is unlikely to be true for all clinical laboratories and pathology groups that offer whole human genome sequencing services. They have both the cost for genetic experts needed to review genome data and interpret it for referring physicians, as well as the added expense of meeting federal and state medical laboratory laws and regulations. That is why it is important for lab professionals and payers to understand the full “story behind the headlines.”

—by Joseph Burns

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The utility of the traditional medical genetics diagnostic evaluation in the context of next-generation sequencing for undiagnosed genetic disorders