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Cologuard, made by Exact Sciences, sponsored a golf tournament this year. Photo: Darren Carroll/Getty Images

Exact Sciences, maker of the colon cancer test Cologuard, has signed a multimillion deal with drug giant Pfizer to increase and share in the costs of marketing the test — a move Wall Street cheered yesterday.

The bottom line: Physicians and other medical professionals should be ready for an onslaught of calls and face-to-face pitches from the companies' sales armies, even though there is evidence the costly Cologuard test can lead to false positives.

The big picture: This marketing blitz inevitably will push more people to get checked for colon cancer, which public health experts say is a good thing. Colon cancer is the second-leading cause of cancer death in the U.S.

But experts also say it will come at a steep price with potentially harmful and wasteful care.

  • A doctor must prescribe Cologuard, an FDA-approved home kit where people mail their stool to a lab for DNA testing.
  • Medicare pays $509 for Cologuard. Most other commercial health insurers cover it, and likely pay more than Medicare.
  • The U.S. Preventive Services Task Force says Cologuard is acceptable for colon cancer screening. But when compared with cheaper tests, Cologuard was tied to "more false-positive results, more diagnostic colonoscopies, and more associated adverse events per screening test," and it "may potentially lead to overly intensive surveillance," according to the USPSTF.
  • "Worried patients and/or providers may feel obligated to order additional tests — which could be imaging or invasive — to determine whether there could be a cancer elsewhere in the body, thus potentially adding to the costs and risks of Cologuard screening," Richard Hoffman, a professor of internal medicine and epidemiology at the University of Iowa, said in an email.
  • An Exact Sciences spokesperson referred to a company-funded study on why it believes Cologuard is better than other tests.

By the numbers: The financial terms of the agreement are lucrative for both sides.

  • Pfizer will spend nearly $70 million in Cologuard marketing and promotion from October through the end of 2021.
  • Exact Sciences will maintain its baseline marketing spend of at least $80 million per year and match Pfizer's additional spending.
  • Any profits that are earned over certain Cologuard revenue thresholds will be split 50-50, and Pfizer can get a royalty of up to 3% of Cologuard sales for three years after the deal ends in 2021.
  • A Pfizer executive told investors it made the deal because it had a sales team for Lyrica, a drug that is losing market exclusivity, that could shift to Cologuard instead.
  • Exact Sciences expects to bring in at least $1.2 billion in Cologuard revenue by 2021.
  • CEO Kevin Conroy made almost $50 million over the past three years, including $32.3 million in 2017.

Go deeper

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Pentagon warns of ISIS-K capabilities outside Afghanistan

The site of an airstrike conducted by the U.S. against a planner for ISIS-K in Nangarhar province, Afghanistan in August. Photo: Xinhua via Getty Images

U.S. intelligence believes ISIS-K has the "intent" to eventually launch attacks outside of Afghanistan and could be capable of doing so "somewhere between six or 12 months," a top Pentagon official told senators Tuesday.

Why it matters: The U.S. withdrawal and subsequent Taliban takeover of Afghanistan has raised fears that terrorist groups will reconstitute and potentially pose a renewed threat to the U.S. homeland.

Exclusive: Billionaires back new media firm to combat disinformation

Illustration: Aïda Amer/Axios

A new public benefit corporation backed by billionaires Reid Hoffman, George Soros, and others is launching Tuesday to fund new media companies and efforts that tackle disinformation.

Why it matters: Good Information Inc. aims to fund and scale businesses that cut through echo chambers with fact-based information. As part of its mission, it plans to invest in local news companies.

Dan Primack, author of Pro Rata
2 hours ago - Economy & Business

Scoop: Sequoia Capital just blew up the VC fund model

Illustration: Aïda Amer/Axios

Sequoia Capital, one of the world's oldest and most successful venture capital firms, is forming a single fund to hold all of its U.S. and European investments, including stakes in publicly-traded companies, Axios has learned.

Why it matters: Venture capital is the money of innovation, but the industry itself rarely innovates. This is a radical exception.