How Could Cheaper Genomic Sequencing Affect the Clinical Testing Industry?

June 01, 2023

When Illumina launched its new NovaSeq X Series of next-generation sequencing (NGS) systems at the end of September 2022, Kári Stefánsson, the founder and CEO of biopharma company deCODE genetics, hailed the new tech as an advancement that “will accelerate our path towards the $100 genome.”¹

Illumina chief executive officer Francis deSouza added in the same press release that the enhanced speed and power of the new production-scale sequencers “will empower researchers, scientists, and clinicians in the fight to diagnose, treat—and eventually cure—disease while making genomics more sustainable and accessible to millions more people around the world." The systems were also touted in a Wired article as the start of the “era of fast, cheap genome sequencing,” helping bring the cost of sequencing down from the current $600 to $200.²

While cheap genome sequencing sounds great for researchers, it will likely be a while until the benefits reach those on the diagnostic testing side. As the Wired article points out, Illumina’s new machines are more beneficial than previous genome sequencing options for researchers, but for testing healthy people, there isn’t currently enough evidence showing that the benefits of genome sequencing justify the cost.

Why It Won’t Benefit Clinical Labs Any Time Soon

A molecular pathologist who heads labs at a major US academic and healthcare system, but asked not to be named for this article, told G2 Intelligence that while it’s impressive that Illumina’s new technology reads sequences faster and more cheaply, it likely only benefits those who are running thousands of sequences at once. According to him, diagnostic labs like his do not perform a lot of genome sequencing because sequencing data analysis is cost-, labor-, and time-intensive.

For this molecular pathologist, when selecting a new technology for a lab, his team has two main considerations: cost, and matching the sequencing need to the need in the labs. For his labs, which focus on medical genetic sequencing and acquired cancerous mutations, the labs are looking at small panels of several hundred genes, rather than the thousands of genes researchers would be exploring in a large-cohort, pre-clinical study. But, he explains, the cheaper $200 per genome cost is likely only realized if the Illumina machine is running fully loaded.

“At $200 per genome, the coverage depth is probably not sufficient for the analysis of acquired mutation testing in cancer,” the pathologist tells G2 Intelligence. “At the price point of $1 million…I don’t think we will see rapid adoption in the clinical [diagnostics] space.” Nonetheless, he agrees that cheaper genome sequencing is an important step forward and adds that if the same technology were offered in small-throughput instruments such as Illumina’s NextSeq line, his labs would be very much interested.

Other Costs Related to Sequencing

The pathologist also points out that the new technology assists with only one part of the total cost of sequencing—the “wet work” involved in NGS—which has now been surpassed by the bioinformatics required to make sense of the huge amount of generated data. He believes that the new Illumina technology does not yet address the significant bioinformatics expertise and infrastructure required to take the NGS data, analyze it, hone in on clinically relevant results, and turn it into a lab report that can be used to guide patient care.

Currently, the pathologist explains, making sense of that data involves employing highly educated experts to scour existing literature to see what the data mean in the context of current knowledge, which takes a lot of time and effort. While keeping up with the literature on newly discovered mutations, particularly in the context of specific diseases, is currently a big bottleneck in genetic testing, “decreasing the cost of any one component of this process has the potential to decrease total costs,” he adds.

And although the new Illumina machines are automated and “produce a report comparing each sample against a reference genome” so labs with small numbers of staff can run them,² the pathologist doesn’t think this will reduce costs much for clinical diagnostics labs.

Reimbursement Challenges for Genetic Testing

Another challenge with genetic testing that the new technology likely won’t help with is reimbursement, since the rates are determined by the Centers for Medicare & Medicaid Services (CMS) and private payers¾though the lab leader points out that CMS reimburses fairly well.

According to the National Human Genome Research Institute, reimbursement for genetic testing is challenging because there are roughly 70,000 tests on the market, but fewer than 200 Current Procedural Terminology (CPT) codes for them. This makes it difficult for payers to figure out exactly which test was performed, if that test was medically necessary, and if the test “is scientifically valid.”³ This will be a continuing challenge as more NGS tests are added every day, and more growth is expected. According to a 2018 report from healthcare technology company Concert Genetics, the US genetic diagnostic market is growing quickly, with more than 75 percent of that growth thanks to NGS tests.⁴

However, the genetic tests that are covered have some of the highest reimbursement rates, making them a profitable area for labs. For example, five of the top 25 tests that made up Medicare Part B spending on lab tests in 2021 included genetic tests, with reimbursements ranging from $508.28 for gene analysis for colorectal cancer to $3,873 for a test detecting genes associated with breast cancer.⁵

While the cheaper genome sequencing offered by the new Illumina machines and other systems entering the market will benefit only researchers at this time, the pathologist points out that many advances in the research space eventually reach the clinical diagnostics realm.

“I don’t want to diminish the importance of this technology,” he says. “Every step eventually finds a meaningful application in the clinical space. It’s an important advance, but the immediate application to clinical is not clear to me.”

Key Players in Cheaper NGS

Other key companies planning to offer new tech for cheap genome sequencing in the near future, according to a recent Science article:⁶

Ultima Genomics announced a low-cost, high-throughput sequencing platform claiming to provide “the $100 genome”⁷
MGI
Element Biosciences
Singular Genomics

References:

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This article originally appeared in G2 Intelligence, Diagnostic Testing & Emerging Technologies, May 2023.

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