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Looking Back: Pharmacogenomics in 2019

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Pharmacogenomics is the study of how a person’s genes affect how he or she responds to medication. Pharmacogenomic testing, however, remains medically necessary in very few cases. How has the increased use of genetic testing led the federal government into launching over 300 investigations for alleged fraud? In this episode, Darshan discusses some benefits and pitfalls of genetic testing.


Looking Back: Pharmacogenomics in 2019

January 28, 2020
[smart_track_player url=”″ title=”Looking Back: Pharmacogenomics in 2019″ color=”#FF5722″ social_linkedin=”true” social_email=”true” tweet_text=”Check this @darshantalks podcast on #pharmacogenomics in 2019!”] [learn_more caption=”Read Transcript” align=”right”] Darshan: Hey everyone. Welcome to another episode of Darshan Talks. Today’s episode is going to be about pharmacogenomics. So the first thing to ask is what exactly is pharmacogenomics?

Intro: This is the Darshan Talks Podcast, regulatory guy, irregular podcast with host Darshan Kulkarni. You can find the show on Twitter, @Darshantalks or the show’s website at

Darshan: So pharmacogenomic tests are aimed at identifying genetic variations that suggest that a patient may have an unusual reaction to a specific medication. A pharmacogenomic test may therefore be useful if a patient has shown an unexplained or otherwise unexplainable reaction to a certain medication. However, the scientific evidence supporting pharmacogenomic testing in the vast majority of cases remains relatively slim. There are obviously exceptions to this. So coverage wise, between 2015 and 2018, Medicare payments for genetic test more than doubled. They went to well over $1 billion in 2018. So obviously these genetic tests have become a lot more common and there are financial incentives behind this.

Darshan: To date, Medicare has generally recognize that pharmacogenomic testing and other genetic tests are medically necessary in only a very narrow set of cases. Some Medicare contractors have issued numerous local coverage decisions making that clear. However, where no local coverage decision is at issue, a test must still be medically necessary and thus the absence of a local coverage decision may mean that it may raise the question of whether something is reimbursable. However, just because it’s not written out there doesn’t mean that it doesn’t meet the medical necessity standard.

Darshan: The Medicare claims processing manual explains the screening tests, genetic or otherwise, are generally not covered by Medicare. A practitioner who routinely performed genetic tests on patients regardless of each patient’s clinical history and presentation would therefore potentially fall foul of Medicare requirements. Now, having said all of this, the US Department of Justice announced criminal charges against 35 individuals across various jurisdictions allegedly involving genetic testing fraud and this went to over $2.1 billion, and the government asserted that these individuals had engaged in targeting seniors and disabled through various cancer screenings. So these cancer genetic tests were performed to screen patients for genes that may show whether a patient is predisposed to developing certain cancers.

Darshan: The federal government has launched over 300 investigations into alleged fraud in genetic testing, many of which are actually probably ongoing. Having said all this, let’s look at a couple of different examples. Outside the actual Operation Double Helix, there’s the UTC lab settlements. On October 9th, pharmacogenetic pet lab test, UTC labs and three of its principles, the lab agreed to pay for $41.6 million with three separate individuals being responsible for another $1 million. The case resolved allegations brought by whistle blowers that the lab paid kickbacks to doctors as well as marketers for medically unnecessary tests. The physician kickbacks were, as the government described them, thinly disguised as seemingly legitimate payments for work done by UTC led clinical study. The payments were used to leverage referrals from the physicians and the clinical study work was basically unnecessary.

Darshan: Similarly, there was Primex and Primex Clinical Labs LLC concealed kickbacks to doctors for providing clinical data to the lab, and then there was a remuneration arrangement. So again, if you think about it, this is another situation again using this concept of kickbacks so just keep that in mind as we continue. Then there was Pathway Genomics and they agreed to pay $4.1 million to the federal government, the 20th states and Washington, D.C. That’s Pathway Genomics. Then there was GenomeDx, or Genome Disease Biosciences, and they agreed to pay almost $2 million to resolve allegations that they billed Medicare from medically unnecessary tests.

Darshan: So if you look at this, there are two major formats that problems seem to be occurring in. One is kickbacks to physicians. The second one being medically unnecessary tests. But there are other methods in which the DOJ is actually going after these types of companies. The first being obviously the fact that there was the kickbacks, that physicians are being bribed to order these very expensive DNA tests, and that’s actually not necessary. The second one being a Stark violations and medically unnecessary tests. So these practices, particularly those with financial incentives, may institute policies [inaudible 00:05:30] principals and practitioners. So sometimes you actually have physicians who actually own these labs and therefore then land up sending and referring patients to these labs. So they’ll land up double dipping, if you will.

Darshan: One from as a physician writing the order and one as the owner of the genetic lab tests who actually fulfills the order. This was exactly what the Stark Law was intended to prevent. These policies therefore issued under the standard of care, guys, landed up providing cutting edge personalized or precision medicine services to their patients, but these were actually unnecessary. There were two other versions of claims that actually came about. One was payment for services not rendered, and those situations, physicians didn’t even land a printing patients or only saw them by a cursory telemedicine consult. So again, this brings in the concept of telemedicine and how that’s being used in inappropriate ways. So telemedicine should be able to augment or even sometimes replace. However, it has to be done the same way as any normal consult would be taken. A simple cursory telemedicine consult is likely to not meet the standards.

Darshan: Another situation in which these pharmacogenomics tests were being abused was that labs may be upcoding, which means billing payers for more expensive tests than those that were actually performed. So again, since this is relatively new, the Medicare and other insurance auditors have found it difficult to actually crack down since this information is simply not available. So we’ve got four typical methods in which the DOJ is alleging that there’s fraud occurring. One is kickbacks, one is Stark violations and medically unnecessary tests. One is payments for services not rendered. Finally, there’s upcoding. So keep each of these in mind as you continue.

Darshan: If you are a pharmacist providing pharmacogenomic testing and assisting in interpretation of what this means to your drugs or to the types of services being used, keep that in mind because again, just because you’re a pharmacist doesn’t mean you wouldn’t be targeted. In fact, there might be other claims that come in as well. Another thing to think about is where is this going? Again, for the most part, the FDA has performed what’s referred to as prosecution discretion where they basically say that, “You know what? We want to see the industry develop before we actually go after people unless there’s some serious effects of safety or efficacy.” So we might start seeing more information around that as we continue. I would also expect that in the coming months and years, we’ll see the DOJ continue to prosecute in this format. So keep aware of what’s going on here.

Darshan: If you have any questions, feel free to reach out to me. Again, you can reach out to me on Twitter, @Darshantalks. You can also reach out to me via my website, and I would love to hear from you. If you think that pharmacogenomics has been especially useful for you, feel free to leave a message, feel free to contact me. If you think that pharmacogenomics has actually harmed you, feel free to reach out to me and feel free to talk to me. I’d be happy to help in any way I can. If you actually are a practitioner and you find that there have been concerns where you don’t fully know how to integrate this into your practice and how do you market this, feel free to reach out to me, I’d be happy to help. If you are a pharmacist and you’re trying to understand, do you have a role to play in pharmacogenomics, feel free to reach out to me.

Intro: This is the DarshanTalks Podcast, regulatory guy, irregular podcast with host Darshan Kulkarni. You can find the show on Twitter, @darshantalks or the show’s website at


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