General Medical Necessity Criteria for Approval of Drugs with Companion Diagnostics

Number 5.01.543*

Effective Date November 20, 2014

Revision Date(s) 11/10/14; 12/09/13

Replaces N/A

*This coverage is managed through the Pharmacy benefit.

Coverage Guideline

The following coverage criteria applies to drugs with companion diagnostic tests, whenever there is not a specific medical policy covering the situation:

Drugs that have a specific companion diagnostic test may be considered medically necessary when

  • The diagnostic test has been performed, AND
  • Test results predict that the drug will be of benefit to the patient for whom it is prescribed, AND
  • The drug is prescribed for a labeled indication in a patient that meets the FDA-approved criteria for prescribing it.

Such companion diagnostics may be considered medically necessary for any patient in whom use of the drug is contemplated and the test informs whether use of the drug is expected to yield benefit to that patient.

If a drug-specific medical policy addresses the case circumstances, that policy will take precedence over this more general policy.

Other uses of these drugs are considered not medically necessary.

NOTE: Requests for approval of the drug should be accompanied by documentation of test results. In cases where the FDA has approved a drug with a specific branded companion test, determination of medical necessity may be based on that test, or any reasonable equivalent, whether specifically named in the label or not.

Related Coverage Guidelines / Policies


Cytochrome p450 Genotyping


Genetic Testing for Lynch Syndrome and Other Inherited Colon Cancer Syndromes







BCKDHB (branched-chain keto acid dehydrogenase E1, beta polypeptide) (e.g., Maple syrup urine disease) gene analysis, common variants (e.g., R183P, G278S, E422X)


BCR/ABL1 (t(9;22)) (e.g., chronic myelogenous leukemia) translocation analysis; major breakpoint, qualitative or quantitative


BCR/ABL1 (t(9;22)) (e.g., chronic myelogenous leukemia) translocation analysis; minor breakpoint, qualitative or quantitative


BCR/ABL1 (t(9;22)) (e.g., chronic myelogenous leukemia) translocation analysis; other breakpoint, qualitative or quantitative


Medical policies are systematically developed guidelines that serve as a resource for Company staff when determining coverage for specific medical procedures, drugs or devices. Coverage for medical services is subject to the limits and conditions of the member benefit plan. Members and their providers should consult the member benefit booklet or contact a customer service representative to determine whether there are any benefit limitations applicable to this service or supply. This medical policy does not apply to Medicare Advantage.

Additional Information

Personalized Medicine

Personalized medicine is a general term that may be used to refer to any set of strategies used to select therapeutic approaches that are tailored to specific patients. Therapies may be identified by any clinically valid means, including demographic factors, genetic, phenotypic or biochemical markers, imaging techniques, etc.

Companion Diagnostics

Companion diagnostics are specific tests used to predict responsiveness of a patient to specific drugs or other treatments. In a more restrictive sense, the term is usually used to refer to genomic, proteomic or metabolomic testing. Genetic tests may identify a single nucleotide polymorphism (SNP) or a panel of SNPs that correlate strongly with positive response.

Evaluation of Companion Diagnostics

Evidence demonstrating the value of a companion diagnostics is categorized in three stages:

Analytic validity How accurately and reliably the test measures the genotype or other marker of interest.

Clinical validity – How consistently and accurately the test detects or predicts the intermediate or final clinical outcomes of interest.

Clinical utility – How likely the test is to significantly improve patient outcomes.

Demonstration of clinical validity is normally expected when vetting a companion diagnostic; however, clinical utility requires longer term studies and will probably not be validated for months or years following product launch.


Development of new technologies such as whole genome assay studies (GWAS) and biobanking of clinical trial tissue samples have greatly increased the potential for identifying companion diagnostics. A previously identified marker may also be found to correlate with therapeutic outcomes, such as the Philadelphia chromosome and Bcr-Abl mutation, which have been found to have a high predictive value for response to imatinib and other targeted kinase inhibitors. The intent of this policy is broadly inclusive; covering any diagnostic methodology specified in the drug’s approved labeling, regardless of whether it is a specific proprietary test or a generic one.

The completion of the human genome sequencing project a decade ago launched a period of rapid growth in the field. The impact of modern high throughput sequencing and DNA microarray chips has dramatically increased the power of genetics research and the resulting pool of information. In the past six years, more than 1000 regions of the human genome have been associated with specific traits and diseases. In this decade, commercialized specific diagnostic test and drug pairs are beginning to emerge from the pipeline and receive final FDA approval. These represent the first of a flood of such products expected to follow.

In some cases, e.g., imatinib and the Bcr-Abl mutation, the pairing will be unquestionable, and review for medical necessity may prove unnecessary. In others, potential off-label uses will develop rapidly and prescriber demand may precede the corresponding scientific evidence. For instance, ivacaftor, a recently approved novel therapy for cystic fibrosis patients, acts to improve function of CFTR chloride transport channels in patients with a G551D point mutation. This is only one of over 23 identified polymorphisms that may result in cystic fibrosis. Ivacaftor is currently under investigation for use in several other mutations, but results of these studies are not yet available; however, requests for these off-label uses are already beginning to be made. This example illustrates the need to manage off-label use. With the growing number of new diagnostic/drug pairs being approved, a more generalized approach to managing utilization is required.

As genetic science advances rapidly into this field, investigators are encountering new orders of magnitude of complexity. Despite the milestones achieved since 2001, we are still far from understanding the mechanisms behind most of the diseases being studied. Given the desperation of patients and physicians faced with incurable chronic diseases, experimentation beyond the limits of evidence-based medicine is bound to occur. This policy is designed to provide a simple administrative means of ensuring that clinical practice does not outpace research.

2013 Update

No changes were found that indicate need for change to this policy.

2014 Update

No information was found that indicates a need for changes to coverage contained herein.


  1. CDC EGAPP Initiative. Public Health Genomics: Genomic Testing: ACCE Model Process for Evaluating Genetic Tests. Available at Last accessed October 29, 2014.
  2. Burke W, Zimmern R. Moving Beyond ACCE: An Expanded Framework for Genetic Test Evaluation. A paper for the United Kingdom Genetic Testing Registry, PHG Foundation, 2007. Last accessed October 29, 2014.
  3. Bochud M. Genetics for Clinicians: From Candidate Genes to Whole Genome Scans. Best Pract Res Clin Endocrinol Metab. 2012;26(2):119-32.
  4. National Human Genome Research Institute. A Catalogue of Published Genome-Wide Association Studies. Last accessed October 29. 2014.
  5. Knight JC. Resolving the Variable Genome and Epigenome in Human Disease. J Intern Med 2012 Apr;271(4):379-91.





New policy. Add to Prescription Drug section.


Code update. Codes 81205 – 81208 and 81235 added to policy; these are new codes effective 1/1/13.


Minor Update – Clarification was added to the policy that it is managed through the member’s pharmacy benefit; this is now listed in the header and within the coding section.


Replace policy. Policy updated with review; no changes to policy statement.


Update Related Policies. Add 12.04.506.


Annual review. Covered to Benefit Coverage Guideline template; no change in coverage criteria.


Coding update. CPT code 81235 removed from the policy; this applies to policy 2.04.125.

Disclaimer: This medical policy is a guide in evaluating the medical necessity of a particular service or treatment. The Company adopts policies after careful review of published peer-reviewed scientific literature, national guidelines and local standards of practice. Since medical technology is constantly changing, the Company reserves the right to review and update policies as appropriate. Member contracts differ in their benefits. Always consult the member benefit booklet or contact a member service representative to determine coverage for a specific medical service or supply. CPT codes, descriptions and materials are copyrighted by the American Medical Association (AMA).
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