Correspondence on “cost or price of sequencing? implications for economic evaluations in genomic medicine” by Grosse and Gudgeon

We appreciate the opportunity to respond to the letter by Grosse and Gudgeon regarding our article, “Cost-effectiveness of genome-wide sequencing for unexplained developmental disabilities and multiple congenital anomalies.” Grosse and Gudgeon present a robust and valuable discussion on the role of economic evaluation in health care decision-making and the importance of distinguishing cost and price of genomic tests. As they rightly point out, cost-effectiveness analyses (CEA) conducted from the public health care payer perspective should use costs rather than prices wherever possible. This is because costs can more closely reflect the opportunity costs, which represent the monetary value of resources forgone, whereas prices represent the amount of money charged inclusive of nonresource elements such as markups. The problem with using a price rather than deriving an opportunity cost is particularly acute for genome-wide sequencing for which, regrettably, pseudoeconomic statements (e.g., the “$1000 genome” or “rapidly falling costs”) have been used as arguments for investments in the absence of evidence of value for money. We also agree with Grosse and Gudgeon that there are specific challenges in estimating the costs of genomic tests, especially in the pediatric population. The purpose of our CEA of genome-wide sequencing for children with unexplained developmental delay or multiple congenital anomalies was to inform a recommendation about whether sequencing should be publicly funded in the province of Ontario, Canada. At the time of the completion of our economic evaluation, no Ontario laboratory was licensed to perform exome sequencing (ES) or genome sequencing (GS) for patient care. However, clinical ES was available to eligible Ontario patients by sending samples out of the country (usually to US labs) through the Out of Country (OOC) Prior Approval Program. In the absence of other cost estimates, we chose to use the estimated costs for GS (proband and trio) from a 2019 Ontario microcosting study conducted in the specific target population (i.e., children with congenital anomalies and developmental delay) that used research sequencing resource use data to emulate costs in a clinical setting. Although the costs for ES (proband and trio) were also available from the same microcosting study, we chose to use the average price of ES paid by the Ontario OOC Prior Approval program ($4589.40; 90% trio) for the reference case analysis because it represented actual payments borne by the health care payer (the Ontario Ministry of Health) and as such was considered the most appropriate estimate. We used the costs of ES from the Ontario microcosting study in a scenario analysis to assess the robustness of our findings. As indicated by Grosse and Gudgeon, OOC prices for ES used in the CEA were higher than the local microcosts of ES, and thus our approach was conservative because it reduced expected savings.

The increasing use of ES through the OOC program was a strong signal for the need to perform a health technology assessment to support a local public funding decision for ES and GS in Ontario. The context of the economic evaluation was focused on the Ontario healthcare landscape at the time of evaluation. However, the lessons learned from this evaluation may be relevant and applicable to other similar publicly funded health care systems considering changes in their current use and access to ES and GS.