Veracyte - France

FNA results:
Benign = 62.8%
Non‐diagnostic/ Inadequate* = 13.6%
Malignant = 2.6%
Suspicious = 21.1%
*Initial FNA results in an inadequate result, a repeat FNA is conducted; if the result is still
inadequate, the patient is sent to surgery
We could assume there is ½ chance the 2nd FNA result is inadequate
→ Non‐diagnostic/ Inadequate sent to surgery = 6.8%
→ Non‐diagnostic/ Inadequate not required surgery = 6.8%

Costs:
FNA test* = $1,516
Surgery = $4,428
Lifetime hormone replacement medicine = $3.42 per month for 40 years = $1,648
Total cost of surgery + lifetime hormone replacement medicine = $6,076

*FNA test cost include consultations, first and repeated FNA, and result analysis
→ We can assume the other three patients group benign, malignant and suspicious do
only one FNA test
→Assume that performing FNA test in the U.S costs the same in France = $225
→ FNA test for benign, malignant and suspicious group: $1,516 - $225 = $1,291

Cost per patient group:

Benign (pay for FNA) = 62.8% × $1,291 = $810.75
Non‐diagnostic/ Inadequate not required surgery (pay for FNA) = 6.8% × $1,516 = $103.09
Non‐diagnostic/ Inadequate sent to surgery (pay for FNA + surgery + medicine) = 6.8% ×
($1,516 + $6,076) = $516.26
Malignant (pay for FNA + surgery + medicine) = 2.6% × ($1,291 + $6,076) = $191.54
Suspicious (pay for FNA + surgery + medicine) = 21.1% × ($1,291 + $6,076) = $1,554.44

→ Average cost per patient = $810.75 + $103.09 + $516.26 + $191.54 + $1,554.44 =

$3,176.08

As of 2008 in France, the number of FNAs performed was 71,280

→Cost to medical system: 71,280 FNAs × $3,176.08 = $226,390,768.56
In a system where Afirma is adopted and is free, the 21.1% of “suspicious” patients will now be
given Afirma diagnostic. Of those patients, Afirma diagnostic will return “malignant” result for
20% of the tests and “benign” result for 80%.
→21.1% of “suspicious” patients using Afirma diagnosis:
80% pay FNA test (assuming Afirma is free)
20% pay FNA + surgery + medicine (assuming Afirma is free)
→21.1% × [(0.8 x $1,291) + (0.2 x ($1,291 + $6,076))] = $528.80

→ Average cost per patient = $810.75 + $103.09 + $516.26 + $191.54 + $528.80 =

$2,150.44

→Cost to medical system: 71,280 FNAs × $2,150.44= $153,283,363.20

If adopt Afirma:
→ Average savings per patient: $3,176.08 - $2,150.44 = $1,025.64
→ Aggregate saving to the medical system: $226,390,768.56 - $153,283,363.20 =
$73,107,405.36

Price estimate in 25%, 50% and 75% saving pool:

25% 50% 75%
Aggregate saving to the medical system
($73,107,405.36 × % saving pool)
Annual revenues for company $18.3 million $36.6 million $54.8 million
Only 21.1% patient using Afirma of
total pool of 71,280 FNAs ÷15,040 ÷15,040 ÷15,040

Afirma price estimate $1,215 $2,430 $3,645

With three pool of national health providers demand of the economic value created by
Veracyte’s thyroid diagnostic, the highest annual revenues could be generated is $54.8 million.
With a low incidence case as compared to U.S, and the price estimate for Affirma is higher than
the total health expenditure per capita, it is not feasible to enter France market