In a session at AMCP Nexus 2025, Steven Kheloussi, PharmD, MBA, FAMCP, and Jennifer Billings, PharmD, BCGP, provided a comprehensive overview of the rapidly evolving precision medicine landscape and the payer considerations that accompany it. The discussion framed precision medicine as a data-driven, individualized approach to disease prevention and treatment—where genetic, environmental, and lifestyle factors guide therapy selection.

Kheloussi emphasized that this rational therapeutic approach underpins the work of managed care professionals. Importantly, he differentiated precision medicine from personalized medicine, the latter encompassing broader patient factors such as age, gender, and socioeconomic status.

Why Precision Medicine Matters

The presenters cited a growing body of evidence showing improved survival in patients—particularly those with non-small cell lung cancer—who receive first-line treatments aligned with biomarker test results. Yet, despite strong clinical and financial rationale, significant gaps persist in biomarker testing and application. Data indicate that only about one-third of eligible patients ultimately receive a targeted therapy consistent with their test results.

Beyond oncology, precision medicine is expanding into chronic and rare diseases, driving both clinical innovation and economic implications. Spending on oncology and molecular diagnostics under Medicare Part B has increased sharply over the last decade, underscoring the importance of managed care involvement.

The Complex Precision Medicine Ecosystem

Kheloussi described precision medicine as a “complex ecosystem” involving a vast array of stakeholders—payers, laboratory benefit managers (LBMs), policy vendors, laboratories, data and analytics firms, regulators, and patient advocates.

LBMs, in particular, play a growing role, handling coverage, network design, and claims related to laboratory benefits.

Guideline organizations like the National Comprehensive Cancer Network (NCCN) and the American Society of Clinical Oncology (ASCO), along with clinical pathways, are central to aligning payer policy with evidence-based care.

Health care providers and navigators bridge gaps between patients and payers, while pharma and biotech firms continue to invest heavily in targeted therapies and companion diagnostics.

Biomarkers and Diagnostic Technologies

Billings provided a detailed review of biomarker classifications and testing methodologies, explaining that biomarkers can be genetic, molecular, histologic, or physiologic. She highlighted the growing sophistication of testing—from immunohistochemistry (IHC) and polymerase chain reaction (PCR) to next-generation sequencing (NGS).

While targeted single-gene tests remain widely used, multigene panels and comprehensive genomic profiling are becoming more accessible, though cost, turnaround time, and availability still pose challenges. Billings noted that test selection often depends on disease type, specimen availability, test access, and payer reimbursement.

Companion Diagnostics, LDTs, and Payer Implications

The speakers discussed distinctions between US Food and Drug Administration (FDA)-approved companion diagnostics (CDx)—which are required for certain drug approvals—and lab-developed tests (LDTs), which are created and validated in CLIA-certified labs without FDA oversight.

While LDTs facilitate rapid innovation and fill gaps in test availability, their variable oversight raises payer concerns about validity and reproducibility.

These differences also influence drug label language and payer policy alignment. Some drug labels explicitly require an FDA-approved test, while others are more flexible, creating inconsistencies in coverage.

Managed Care Considerations: Aligning Policy and Practice

Billings and Kheloussi drew parallels between drug management and biomarker test management, citing similarities in coverage evaluation, distribution networks, and contracting processes. Managed care organizations face challenges in balancing evidence-based policy, patient access, and cost containment.

Key payer considerations include:

• Analytical validity, clinical validity, and clinical utility of tests
• Alignment with national guidelines such as NCCN and ASCO
• Cost-effectiveness, particularly the role of step-therapy and frequency limits
• Variability in coverage across Medicare, Medicaid, and commercial lines

Billing and coding complexities further complicate reimbursement, as most tests are billed using broad CPT codes rather than unique identifiers. This lack of specificity can lead to inconsistent payments and administrative burden.

Findings From the AMCP Partnership Forum

Kheloussi highlighted outcomes from AMCP’s June 2025 Partnership Forum, which convened payers, laboratories, biopharma, and policy experts to address challenges in defining clinical utility, pathologist-initiated (reflex) testing, and guideline alignment.

Clinical utility remains inconsistently defined across payers, regulators, and stakeholders. While consensus definitions emphasize outcome improvement and informed decision-making, operationalizing these measures in policy remains difficult.

Pathologist-initiated testing, or “reflex testing,” has been shown to improve timeliness and outcomes but presents reimbursement challenges due to provider credentialing and variable payer recognition.

Guideline alignment is further complicated by the sheer volume and frequency of updates in oncology and other therapeutic areas.

Emerging Trends and Next Steps

Billings closed by emphasizing that precision medicine is extending beyond oncology into rare diseases and chronic conditions, with biomarkers increasingly informing treatment decisions for neurological, metabolic, and inflammatory diseases.

She also discussed state biomarker testing mandates, noting that approximately two-thirds of states now have enacted or pending legislation requiring coverage for biomarker testing supported by medical evidence. However, variability in definitions of “clinical utility” and exclusions for screening-only tests pose ongoing implementation challenges.

AMCP’s ongoing initiatives include:

• Partnering with payers, LBMs, and guideline organizations to improve coverage principles and policy alignment
• Publishing real-world evidence (RWE) on guideline adherence and access disparities
• Expanding educational efforts and policy engagement beyond oncology

Conclusion

The AMCP Nexus 2025 session made clear that precision medicine is reshaping the managed care landscape—bringing both opportunities and operational complexity. As payer frameworks evolve, ensuring equitable access, consistent policy alignment, and evidence-based test utilization will be critical to realizing the promise of precision medicine for all patients.

Reference

Kheloussi S, Billings J. Precision Medicine 101: The Role of Managed Care in Bridging Coverage Gaps. Presented at: AMCP Nexus 2025; October 27-30; National Harbor, MD.