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COMMENTARY

The coming age of in vitro testing

John Place

There are significant differences in per capita healthcare expenditures and per capita IVD product sales among global regions.

Taking the broad view, one has to conclude that the term in vitro diagnostics is really a misnomer. IVDs are used in medical diagnosis and health screening, but also in theranostics (tests that help direct therapeutic interventions by providing feedback on the biological effects of a drug), genetic testing, genomics, self-testing, self-ordering, forensics, veterinary diagnostics, agriculture, food testing, environmental testing, and research. The IVD industry and the medical professions should emphasize the broad applications of IVDs in healthcare rather than in disease diagnosis. IVDs should be spun positively as tools of health and well-being, not disease management.

It is sometimes our habit to think of IVDs in terms of technology and biochemical data, when all the customer wants is useful information. Currently, patients are playing a bigger role in their own healthcare. The empowerment of patients, people's widespread interest in health information, the growing emphasis on genomic pharmaceuticals and wellness, the importance of theranostics, and the provision of evidence about the effectiveness of medical interventions: all of these factors will have a positive effect on the global market for in vitro testing. There can be little doubt that evidence-based medicine will continue to drive an increased demand for testing.

European Market Growth

According to a study conducted for the European Commission by LEK Consultants (London), IVDs constituted about 17% of the total European medical device market in 1993. In 1998 they were probably only about 13% of that market. The European Diagnostics Manufacturers Association (EDMA) has very accurate estimates of the IVD market in the European Economic Area (EEA), obtained via an independent audit of invoiced sales. The 1998 EEA market for IVDs was 5640 million euros (5091 million $U.S.). The industry employed about 35,000 people and spent a massive 11% of turnover on research and development (though that figure was also down, from 13% five years earlier).

The full cost of laboratory testing in Europe, including personnel costs and operational overhead, is about 4–6% of total health expenditures for the region. One does not need to be a health economist to understand that focusing on the other 95% of spending might be a more successful way of containing healthcare costs. Not to mention that in vitro diagnostics can return value for money such that cost-cutting becomes less of an issue.

There are also significant differences in per capita healthcare expenditures and per capita IVD product sales among global regions. In 1997, a typical resident of the United States was spending almost twice as much as the average European, with the Japanese somewhere in between. Although this might be a case of comparing apples with oranges, the fact does suggest that perhaps either the United States is overspending or Europe is underspending, or both.

The IVD industry has growth opportunities in Europe. Partly, that is because the countries of central Europe (for example, Poland, Hungary, the Czech Republic, and Turkey) represent large and expanding markets. Europe should spend more on healthcare and on in vitro testing, not so much because the continent is falling behind other advanced nations but, more important than that, because early and correct diagnosis of a patient's condition ensures that subsequent medical treatment is relevant and cost-effective.

Is Europe a single market? The large number of harmonizing directives pertaining to its commercial products gives reason to think it is. Industry is trying hard to ensure that the applicant countries streamline their own legislation to match the European regulations. But the Late Payments Directive had to undergo a conciliation procedure, because the member states of the European Union (EU) resisted the European Parliament's amendments that pointed to the public sector as a bad payer. The medical device industries in Portugal, Spain, Italy, and Greece must wait months to be paid. In Andalusia, almost two years will pass before a provider of medical products is paid for goods already delivered and used.

The infrastructure and demographic trends of the countries of the EU are similar from nation to nation. Europe is characterized by compulsory health insurance, high coverage, and public ownership of hospitals. One of the most important factors of uncertainty in European business, the exchange rate risk, has largely disappeared with the creation of Euroland (encompassing 11 countries so far), and a euro conveniently close to the dollar in value.

Of course, there are major differences among the Europeans. At least 50 languages are spoken in Europe, and countries are insisting, for political reasons only, that national languages appear on product labeling. Tax and labor laws vary from country to country, as do social security systems. Above all, there are widely differing and continually changing reimbursement and payment procedures among the national healthcare delivery systems.

Regulation and the European Market

European market access for IVDs will soon be determined by compliance with the requirements of the IVD Directive 98/79/EC. Ideally, manufacturers should be allowed to set their own prices in a competitive market. With the increasing insistence on evidence-based medicine, perhaps the levels of reimbursement for medical interventions in the future will be determined by medical utility and healthcare priorities. But for now, the principles on which repayment and reimbursement are based are unclear.

The world can be divided into areas covered by one or the other of the two main types of regulation, the FDA type and the EU type. The industry goal of global access can probably not be reached by harmonization alone, even though the Global Harmonization Task Force is succeeding in promoting convergence. Instead, or in addition, mutual recognition agreements, based on recognition of results of quality system audits carried out by conformity assessment bodies (also called notified bodies), are the means for transcending barriers.

Before the medical device directives were introduced, European national regulations were light and varied. Regulations naturally increase the cost of healthcare, so the benefits of regulation ought to outweigh the costs. The IVD industry asked for a harmonizing directive mainly to avoid the proliferation of diverging national measures that followed in the wake of the blood scandals. This is somewhat ironic, because the scandals did not arise as a result of product failures, but rather as a result of poor decisions by those in authority. The outcome has been rather heavy regulation of IVD products in general.

The IVD Directive is based on Article 100a of the EU Treaty and regulates products. It does not regulate the procedures that involve use of the products, that is to say, the practice of medicine. The directive therefore pertains mainly to the safety and quality of the IVD devices themselves in their intended uses and cannot relate to the effectiveness of diagnostic procedures.

It is noteworthy that the definition of an in vitro diagnostic medical device in the directive mentions the use "intended by the manufacturer" and the purpose of "providing information." Both of these phrases have important repercussions for clinical laboratory medicine. Who is the intended user? Recital 22 assumes that "competently trained professionals" will use the products. The exception is products for self-testing, whose users are not expected to be trained and for which there are therefore third-party design assessments. Logically, if diagnostic product use assumes competently trained users, then some form of accreditation of laboratories and users should be mandatory. Point-of-care testing and other out-of-laboratory use needs to be carefully controlled.

If a manufacturer makes medical claims for a product, it will be considered a medical device and must be CE marked. (The first possible application of the IVD Directive was June 7, 2000. The CE mark is mandatory for marketing on or after December 7, 2003.)

A manufacturer must also review each product's postproduction experience, during which process it may become aware of a medical application of a product not originally claimed. When the product is used as the manufacturer intends, the concept includes service and maintenance as intended by the manufacturer. Manufacturers must demonstrate that reagents work in conjunction with the instruments they are intended for, and vice versa. All this implies that laboratories that decide to do their own servicing and maintenance, to make their own reagents, or to reuse single-use devices must also demonstrate that they fulfill the requirements of the IVD Directive, because they have become in effect manufacturers themselves. Not to do so will leave them open to liability and could result in a withdrawal of accreditation.

The Medical Reformation

Medicine can be compared in many ways to religion. Medicine has developed an establishment that is difficult to challenge or change. Many medical interventions are grounded in traditional beliefs with no real evidence to support them. Stretching the point, medical activities often are conducted in large buildings built at great cost, and doctors have been known to speak Latin. This establishment has popular support, but the congregation is becoming increasingly skeptical. Alternative (heretical?) systems of medicine are growing in popularity. Meanwhile, a medical Reformation is emerging, based on the provision of information as a replacement for antiquated practices founded on belief.

The potential for needing healthcare can be traced to two basic types of health risk: that which arises by chance (for example, genetic predisposition or trauma) and that which derives from choices made (for example, diet or lifestyle). Healthcare needs attributable to chance are generally a collective responsibility and natural for the medical professions to address, whereas choice and its attendant risks are the responsibility of the individual. Nevertheless, though individual choices can greatly increase the risk of incurring disease, collective insurance, either public or private, still covers the consequences.

No doubt, better individual choices lead to better health. It is important, therefore, that people develop an attitude of personal responsibility for their own health maintenance. In vitro testing provides information to support better decisions in healthcare. A study carried out by Watson Biomedical in the United Kingdom revealed, however, that most family doctors are unaware of the large range of specific IVD tests available, and are unable to exploit the accurate data the tests provide. Consequently, they are not able to convey awareness of the value of these tests to their patients. People are beginning to take notice of the imperatives for preventive healthcare all the same. The Internet is one avenue by which they are learning more about the value of in vitro testing. People are beginning to approach their doctors about these tests.

Both the diagnostic industry and the clinical laboratory professions need to be more positive about what they do. They must emphasize health, wellness, and the exciting possibilities of tailoring treatment to suit the individual patient. They can speak with assurance about the key role of in vitro testing in providing evidence for evidence-based medicine. And they can state with confidence that early and correct diagnosis ensures that subsequent medical treatment is relevant and effective.

John Place is director general of the European Diagnostics Manufacturers Association and serves on IVD Technology's editorial advisory board.