MYGN
#Yes, I think both of those contributed.
The LabCorp agreement gets at one portion of our strategy which is broadening access to the test.
As you are aware, only about 50% of rheumatologists order the test and for those that don't order the test, the majority of those is attributed to the fact that they did not have access to patient service centers.
And so that's what the LabCorp collaboration allowed us to integrate with LabCorp and have access.
And so a portion of the increase was certainly attributed to that broader access.
And the practice integration program is driving increased frequency in physician practices.
For physicians that use Vectra, generally they only use Vectra on about 9% of the appropriate patients and so there's ample opportunity to drive deeper in those.
So equally those contributed to the growth that we saw in this quarter.
And I think what's important is that the practice integration program really was only in its pilot phase.
And now that we've rolled that out across the nation in the third quarter, we're expecting beginning Q4 but then probably more even so in FY17 to see the impact from that broader practice integration program.
So both are important.
Both have contributed significantly to the 18% volume growth we saw in the quarter.
This is <UNK>, I'll take the question.
I think the dynamics that went into our guidance as we laid out on the last call with respect to some of the puts and takes with respect to Prolaris' back pay, the Vectra CPT code changed.
And then also the United impact that we saw in the current quarter was a factor in that.
I think those were the things that we looked at.
When you look at our business on a sequential basis and we see growth in the hereditary cancer business, I think that's what would be expected in our fiscal fourth quarter.
From a companion diagnostics perspective, as we've always said, ovarian cancer patients which were the initial indication for BRAC CDX were always within guidelines and therefore we believe that was a cannibalization of our existing business.
As we look at the impact again, first it is important to note that virtually every payer had some preauthorization requirements.
In fact, some of those preauthorization requirements are very similar to United.
So this has really been the trend in the industry for at least a decade.
Because everybody ---+ all payers want to make sure that only appropriate patients are being tested.
And so we, long ago, put in some very expensive quality control measures to ensure that only appropriate patients were getting tested.
And in fact we published data on the extent of our quality systems and how effective they are at ensuring only patients generally that meet NCCN criteria are being tested.
So, for us this is really nothing new.
We built up the processes and the relationships with our physicians in order to comply with all these preauthorization requirements.
Now we do understand from many other laboratories, this is very unique and cumbersome.
And I know for some of them it has posed some challenges but in our view this is just the requirements for engaging in hereditary cancer testing.
As we've look at United, obviously we can look at the work in process for United, how many samples are awaiting release, and we have lots of historical data and current data on that.
So based on those trends and what we've seen through the third quarter as we began to implement these processes, that's why we're very comfortable saying that we aren't anticipating any additional impact from the United process in the fourth quarter because we've already adjusted all of our processes accordingly.
As far as your other question about proactive steps, again because most payers already include some sort of preauthorization requirements, these aren't necessarily unique and so we are always engaging with discussions with our payers and always are offering any information that they may want about the appropriateness of the patients that are tested under their plan.
So I mentioned we published on that, we can and do provide payer-specific data, if they would like to look at that.
And so there's a variety of things we can do to continue to ensure that we are testing appropriate patients.
And so we don't believe that other payers are necessarily going to invoke all this additional paperwork because it's cumbersome for them as well.
But in the event that another payer were to decide that they wanted some additional paperwork, it is not something unusual and we'll be prepared to provide any of the paperwork that we might need.
Thanks.
I think the code you are mentioning ---+ I can't remember the number, because we actually don't use that code.
That's not one we currently use nor is it one we would expect to use in the future.
So I think in this case that doesn't necessarily apply to us.
The codes we use are ones that we've discussed and agreed upon with all payers including both public and private payers and those are the codes that we bill.
I think it's important to note that for public payers, the pricing on our codes is going to be set by the PAMA legislation and in the future that's a weighted median private payer rates which, given our market shares, we would anticipate those to be our rates.
And so that's how we would expect public rates to be set in the future.
And to the extent that private payers look at those rates, those are going to be those median private Myriad rates in the future as well.
So that's how we would expect this to continue to unfold in the future.
I will make a note we've had some questions about PAMA, and for those who aren't aware, this might be useful information, that the PAMA regulations are in their final form.
They are actually in the hands of OMB.
That's the last step before the PAMA regulations become final.
And so typically OMB would review those sometime in 30 to 60 days, and so relatively soon we would expect to see those final PAMA regulations.
And that will dictate whether, in fact, the PAMA prices are in effect on January 2017 or there is some speculation that that may become effective in January 2018.
The last comment I would make is regardless of which scenario occurs, that January 2017 or January 2018, the prices that will be used to set those are going to be prices that are already dictated by our long-term contracts, because even if it's January 2018, those contract prices will be determined, in all likelihood, in January of 2017 to June of 2017 or maybe even March 2017.
So all of those are going to be covered by our current long-range contracts.
So we have good visibility as to what the PAMA prices will be, that will set the public prices and those will be the visible public prices that payers will ultimately see when those contracts come up for renewal in 2018 and 2019.
Thanks, <UNK>.
As you know, as we negotiated these contracts over the last three years, there has been a variety of laboratories out there advertising a wide, wide range of prices, even in the PAMA markets.
And we've been very effective at sitting down with payers and talking about the value that myRisk provides relative to other alternatives that are out there.
Again you have to remember from their perspective that a wrong answer in this industry in this particular application is extraordinarily expensive to a payer.
A false positive means that a patient is going to undergo very expensive interventions that are unnecessary.
And a false negative means that a patient that could've prevented a cancer may very well end up getting a cancer.
And this isn't just for the patient, this is an impact that's felt across the entire family, because generations will live with those wrong answers.
And it's been those very effective arguments that we've been able to make that here's the value that a highly accurate test provides to you and your plan.
Here's what Myriad does that is very different on getting both the sequencing accurate and the interpretation of that sequencing.
And we've been able to very clearly differentiate the performance of our product relative to others that are out there that purport to provide these similar results.
And so we would expect that differentiation to actually just continue to expand.
As I mentioned, our variant data base is growing exponentially.
Our advantages there are actually becoming more pronounced and so many of the arguments that we've made in the past, I think, actually are being accentuated.
The other thing that's important to note is that in the midst of this you also have the FDA that has expressed interest in regulation and that's either going to occur through FDA regulation or legislation.
Either one of those scenarios winds up with the FDA evaluating each of these high risk tests to ensure that all the appropriate claims are being made.
Obviously we have experience with that.
We're the only laboratory-developed test ever approved by the FDA.
They've seen all over our variant processes and we're obviously comfortable in that approval.
And so you need to begin to look at that as a reality in the kinds of timeframe that you're asking.
And the last I'll reemphasize that when it comes to what payers will see, the PAMA prices they will see will be the Myriad pricing because we will be the median for the codes that we use and that's essentially what payers are going to continue to see as the public payer pricing.
So I think when you put all that together it's not that different from what we've faced over the past three years.
And I think we have and will continue to be very successful at differentiating our product and offering the highest value product.
Yes, I think we continue to stick to the capital deployment strategy that we laid out previously with respect to prioritizing R&D first, M&A second and share repurchase.
And our stated goal has been to match free cash flow to share repurchases.
But to your point we don't include share repurchases in our guidance.
So I guess that's all I can really say about that.
It's just that, again, we state that we plan to match free cash flow to share repurchases.
If you want to build it in, that's up to you.
I wouldn't characterize it any differently than what it has been in the past.
It's a market with a lot of companies out there with negative burn rate ---+ burning cash.
In terms of the market dynamics, certainly what's happened recently, I think has probably put a lot more of those potentially in play.
But I wouldn't characterize it as different than what we've seen in the past.
Thanks, <UNK>.
These contracts are all commercial lives and not Medicare Advantage lives.
We generally include those when we talk about the Medicare segment because the coverage decisions made by Medicare are obviously enforced at Medicare Advantage.
So these 28 million were actually in the commercial side.
Some of these are low risk; some are all patients.
We're not going to probably provide that level of granularity nor necessarily payer information, per se.
And some of these could have a value component to those, so there were multiple payers in here and so each of those contracts, as you might imagine, are a little payer specific.
But overall, it was really some very nice progress from our managed-care team just in the last three months.
Great question.
Obviously we only cover a portion of the urologists with the sales team we currently have out there.
We have about 40 salespeople out there.
And so in order to deepen that penetration, it is something that we are evaluating now to see when it would be appropriate to add additional salespeople into that channel so that we can deepen penetration.
Given the level of reimbursement we are starting to obtain, we think it is an appropriate consideration and so we're going through that process as we speak and as we prepare for our FY17 budget.
Obviously at that point as we give FY17 guidance, we can provide some additional color on what the FY17 outlook is for Prolaris.
We've been very pleased with the growth rates we've seen.
You did see in our five-year plans that we had over 30% compounded annual growth rates for Prolaris, so you can see at least from the five-year plans that we made public that we do believe there's opportunity for continued and sustainable significant growth over the next five years.
Thanks, <UNK>.
Good question.
We're going to stay with the philosophy that we used this year.
As everyone on the call is well aware, predicting reimbursement is difficult to do in this environment globally.
And so as we look to provide guidance for FY17, we will stay with the same approach we used, which is that we will only factor in known reimbursement for guidance.
And then we'll characterize, as we did last year, what are upsides and potential downsides to whatever that guidance is that we might provide which, of course, upsides then would be additional reimbursement that we don't have line of sight to.
So we think that's the only reasonable way to address that uncertainty, but at least we can quantify the magnitude of what some of those upsides could be where reimbursement to potentially come for other products through FY17.
Thanks.
This concludes our earnings call.
A replay will be available via webcast on our webcast for one week.
Thanks, everyone, for joining us this afternoon.
