Grail's cancer blood test nears landmark FDA approval, but insurance coverage looms
An advisory panel to the US Food and Drug Administration has handed Grail (GRAL) a milestone win for its Galleri blood test, concluding that the early cancer detection test's potential benefits outweigh its risks and moving it a step closer to approval.
The FDA is not required to follow the panel's recommendation but often does, and Wall Street analysts expect the agency to rule in Grail's favor in the coming months.
Approval would pave the way for what analysts see as the crucial next step for Grail's test and others like it: securing US health insurance coverage. No such test is FDA-approved, and private insurers and government health programs, including Medicare, generally do not cover them.
Galleri and Abbott's (ABT) Cancerguard are marketed in the US as laboratory-developed tests under the Clinical Laboratory Improvement Amendments. Neither is covered by Medicare, leaving patients to pay about $700 and $900, respectively, out of pocket.
FDA approval could make the tests eligible for Medicare coverage from 2028 under a law passed this year. Private insurers would also likely have to cover them if the US Preventive Services Task Force recommends their use. CVS (CVS) and Humana (HUM) declined to comment on their coverage plans, while UnitedHealth (UNH), Cigna (CI) and Centene (CNC) did not respond to requests for comment.
Widespread coverage could create a $60bn-a-year US market by 2030, based on 120mn adults aged 50 and older taking a $500 test annually, according to Elena Meng, portfolio manager and research analyst at Gabelli Funds. She put the global opportunity at $150bn. Meng expects 30 percent to 50 percent penetration over five to 10 years, which would still imply a US market of $18bn to $30bn.
The tests aim to fill a significant gap in cancer screening. Only five cancers currently have established US preventive screening guidelines: breast, cervical, colorectal, prostate and lung. Prostate cancer is the only one screened for with a blood test; the others rely on mammograms, Pap or HPV tests, stool tests or colonoscopies, and low-dose CT scans, respectively.
"There's a big gap . . . we have over 200 types of cancer but only five recommended screenings," said Shlomi Madar, chief executive of SpotitEarly, which makes at-home multi-cancer pre-screening tests. He added that just 14 percent of newly diagnosed cancers are detected through routine screening.
Multi-cancer early detection tests seek to close that gap by detecting tumor biomarkers in a single blood draw. Artificial intelligence and machine-learning models analyze the signals to identify a cancer "fingerprint" and determine its likely tissue or organ of origin.
Grail says Galleri can detect signals for more than 50 types of cancer and identify the likely origin of a signal with 93.4 percent accuracy. A negative result does not rule out cancer, while a positive result requires further diagnostic testing.
Whether such tests provide enough actionable information to improve patient outcomes remains a subject of debate among doctors and researchers. A three-year UK trial of asymptomatic adults aged 50 to 77 found that Galleri did not significantly increase early cancer detection or reduce late-stage diagnoses compared with standard care, Grail reported earlier this year. Full results presented in May, however, showed a 26 percent reduction in stage IV diagnoses across 12 deadly cancers by the third round of screening.
The tests have also drawn support from the Make America Healthy Again movement associated with Health Secretary Robert F. Kennedy Jr. Grail's chief executive highlighted their potential benefits at an industry conference in Washington, which Grail sponsored. "We welcome every opportunity to engage policymakers, patients, and advocates seeking to elevate prevention and early detection of disease as national priorities," a company spokesperson said.
Doctors and researchers have nonetheless raised concerns about the anxiety and medical costs that can follow a positive result. "Detecting early-stage cancers through blood-based assays is biologically and technically challenging, as early tumors typically shed very limited signal into the circulation," said Aadel Chaudhuri, professor of radiation oncology at Mayo Clinic Comprehensive Cancer Center, who noted that a positive result can trigger costly follow-up testing.
"No screening test is 100 percent accurate," he said. "Sometimes we have to take a step back and make sure that we're not applying a higher bar to these tests than we are to other diagnostic tests."
Karthik Giridhar, an oncologist at Mayo Clinic and principal investigator of Grail's Pathfinder 2 study, said FDA approval and insurance coverage could extend access to people beyond those able to pay out of pocket. But he cautioned: "We do not know yet if this type of screening ultimately leads to fewer cancer deaths."