Medical Device Link.

Originally Published IVD Technology September 2004

Commentary

Tiffany Olson is vice president—molecular diagnostics at Roche Diagnostics (Indianapolis). This article is based on her presentation, “Molecular Diagnostics’ Future from the IVD Perspective,” that was given at the 2004 Executive War College on Lab and Pathology Management. She can be reached at tiffany.olson@roche.com.

One of the most fundamental risks in business is being too focused on day-to-day work issues and not adjusting to changing times. The risk of becoming competitively irrelevant is especially pronounced in the IVD industry today because of the advent of molecular diagnostics. Molecular diagnostics will revolutionize the types of tests that IVD manufacturers develop, laboratories perform, and patients demand. 

Societal healthcare trends will also affect IVD manufacturers. In addition, the pace of change is faster than many realize. In some cases, the future has already arrived. 

To survive and remain competitive in the IVD industry, IVD manufacturers have to determine which way the trends are moving and set their course accordingly. How will molecular tests affect diagnosis and treatment in the future? What will it take to get labs and physicians to adopt the new technologies? How will the technologies be paid for? This article explores some trends, projections, and suggestions regarding molecular diagnostics and its future. 

The Changing Face of Healthcare

Several trends are already affecting the IVD industry and molecular diagnostics, with greater changes to come. Such trends include the following: 

Reimbursement. Both large employers and governments are realizing that quality health outcomes save money. As a result, they are using key quality benchmarks to reward high-performing healthcare delivery systems and penalize laggards. 

However, clinical measures do not capture the full value that molecular diagnostics brings to the healthcare system. IVD manufacturers need to provide economic data as well as clinical studies to support their products’ value. Such economic data will demonstrate a molecular test’s worth to a hospital-at-large with better diagnosis, treatment, and prevention, even if the tests do not justify themselves in actual revenues to the lab. 

Nonetheless, such information alone may not make a difference at institutions where every department must justify its own budget. IVD manufacturers might also consider demonstrating the value of molecular diagnostics to a hospital’s chief financial officer or other executives who take a broader view of a hospital’s finances. 

New Infectious Agents. Due to increased global travel, an infection from almost anywhere can become a pandemic in a matter of weeks. For example, in 2003, the severe acute respiratory syndrome (SARS) virus started in a remote location in China and infected more than 8000 people in 30 countries in less than a month. The threat of a bioterrorist attack is another way that globalization is affecting healthcare. 

Labs play a crucial role in such situations. The spread of SARS spurred hundreds of labs worldwide to work on isolating the virus. The crisis also highlighted a knowledge and technology gap regarding this virus: the lack of a test to diagnose and triage patients. 

IVD manufacturers need to make their operations as flexible as possible in such a volatile global environment. The most successful companies will be able to reprioritize projects instantly and reallocate financial and human resources as new infectious agents emerge. 

The economic value of developing tests for rare diseases or diseases that mainly plague poor nations may not always be apparent. However, out-of-the-box thinking can reveal opportunities that are hidden to most. For example, developed nations are starting to see that vaccines are a cost-effective way to help underdeveloped countries reduce their disease load and become less reliant on foreign aid. Such thinking is triggering greater investment in both vaccine development and global vaccination programs. 

Consumer-Directed Healthcare. Consumers today are far more actively involved in healthcare decision making than in the past. In addition, the Internet now enables consumers to quickly compare service options and price, and order tests on-line for illnesses such as HIV, HCV, and HBV. Their options will increase as consumer versions of molecular tests are developed. 

Most IVD manufacturers are oriented more toward marketing to labs than to consumers. Selling directly to consumers requires different skills and marketing strategies than selling to providers. Manufacturers will have to embrace the consumer marketplace if they expect to continue to compete. 

Demographic Shift. In 2000, 12% of the U.S. population was 65 or older. By 2030, that segment is anticipated to grow to 20%, burdening the healthcare system with increased numbers of cardiovascular, neurological, and other age-related diseases. IVD manufacturers should greet this expanding market with greater product development and marketing of assays, including molecular tests, for age-related conditions. 

Labor Shortage. As the number of patients increases, the number of lab technologists is falling. This is a particularly difficult hurdle for molecular diagnostics, since conducting such tests is currently more labor-intensive than other assays. That will change as the technologies develop. In the meantime, IVD manufacturers should focus on automating other assays to free up labor for molecular testing. 

Molecular Diagnostics and the Laboratory of the Future

Despite such major challenges facing the healthcare system, a bright future can be expected for both patients and the IVD industry. Technological developments should meet most of the challenges posed by global and societal changes. And labs will lead the charge by using more molecular diagnostics. However, big changes also mean new winners and losers will emerge in the future. The following projected developments in molecular diagnostics may determine how successful IVD companies are: 

Molecular diagnostics will soon become as integral to traditional labs as hematology, chemistry, and microbiology are today. Molecular testing will become a lab’s MRI, providing the best tests for old and new diseases. IVD manufacturers should show labs that their ability to remain competitive depends on their investing in both the technologies and the talent to conduct the tests. However, as noted above, this does not simply mean promising a new large stream of reimbursement dollars. Rather, manufacturers must provide economic data that demonstrate the cost reductions molecular diagnostics creates throughout the healthcare system, and help labs demonstrate the savings to hospital administrators. IVD manufacturers can also boost public demand for their tests with print and electronic advertising. 

As with any technological transition, the transition to the molecular diagnostics era can be inhibited by the market’s resistance to new ideas and methods. To overcome this resistance in the laboratory market, IVD manufacturers might note what other companies are doing today. For example, once Roche Diagnostics (Indianapolis) obtains FDA approval for a molecular assay, its marketing of the new assay includes making sure potential customers understand the technology and how a molecular testing lab can be set up to use it.
Molecular technologies will increase a lab’s value to the healthcare system. Labs are undervalued today. They provide up to 80% of the information involved in clinical decision making, but represent only about 4% of a typical hospital’s budget. The IVD industry needs to do a better job of communicating the lab’s value to healthcare administrators and the public at large.

Molecular testing will broaden a laboratory’s value to the healthcare economy by expanding the information a laboratory provides. Again, that value is best expressed in economic data that supplement clinical research. 

Such data will show that molecular diagnostics can provide early, accurate screening and prediction of diseases in their asymptomatic stages, years before symptoms appear or diseases actually begin. Whether a lifestyle change or a treatment regimen, intervention can start at that early point, perhaps preventing the disease entirely. Such an ability will allow the healthcare system to transition from reactive to preventive medicine, improving overall healthcare efficiency and saving healthcare dollars. 

Economic data will also establish how molecular tests increase the value of the healthcare system to patients, by reducing infections, morbidity rates, and mortality rates for acute illnesses. Consider, for example, that the development process for molecular diagnostics has become increasingly more sophisticated and faster. It took 6 years to develop an HIV monitoring test, 8 months to develop a test for West Nile virus, but only 2 months to develop a molecular test for SARS. Whenever the next frightening virus appears, molecular diagnostics will be the primary tool that will hold it in check. 

In addition, molecular diagnostics will become an important technology for detecting resistance to antibiotics, a major hazard in the hospital setting. In the future, molecular tests should be able to determine within 2–3 hours not only the nature of an infection but also any potential resistance. 

Molecular tests will run virtually unattended. Today, molecular tests require not only more manual handling than other assays, but also specialized training. While this is currently a marketing challenge for IVD manufacturers, it will not last. Some medical futurists predict all lab tests, including molecular testing, will be completely automated, with all of the work performed by instruments, transport systems, and robots. Other predictions go farther, envisioning technological advances that will allow an entire lab to be placed on a chip or series of chips, perhaps within two decades. Should that occur, lab tests of all types will be able to be performed just about anywhere. 

Even the more limited vision of a fully automated lab means that a hospital’s need for highly specialized technicians will diminish. The equipment will deliver flawless results regardless of operator experience, and may be affordable to labs of all sizes. Indeed, automation is already more cost-effective for smaller hospitals, as long as the test volumes justify it, than many such institutions realize. 

Diagnostics’ role will expand to include determining individual responses to customized drug therapies. It is crucial for IVD manufacturers to understand and communicate to the marketplace how profound the impact of molecular diagnostics can be. For example, pharmacogenetics will enable physicians to individualize therapies by prescribing the most effective drugs for each patient, thus avoiding adverse drug reactions and improving treatment response. 

Today, patient dosage levels are based on age, sex, and weight, as determined by empirical studies. However, specific drug metabolism may be as individualized as one’s fingerprint. Imagine the improvement in treatment efficacy if a pharmaceutical dose could be based on one’s specific genetic analysis and not on the outcomes of other patients. In the future, molecular diagnostics may be able to direct physicians to the right drugs for every patient, no matter what the illness. 

Challenges for Labs Implementing Molecular Diagnostics

Despite the tremendous promise of molecular diagnostics, labs that use them will inevitably face challenges endemic to any new technology. IVD manufacturers must recognize such challenges so they understand what their customers, and the physicians they serve, are experiencing. 

First, labs may struggle to find qualified staff because schools have not kept pace with developments in the molecular field. Second, physicians may be slow to adapt to molecular test results because of the steep learning curve required for using the results and understanding their impact on ordering treatment algorithms. Third, labs will have to absorb start-up and upgrade costs as they transition from traditional to molecular methods. They may also have to change the way their facilities are staffed, organized, and physically designed. 

The healthcare culture must change as well before molecular test results are fully accepted. The medical community and the general public are accustomed to illnesses being treated reactively. Molecular diagnostics changes the paradigm to preventive testing and treatment. 

IVD manufacturers can help speed up the acceptance of molecular diagnostics in several ways. By providing the above-mentioned consultation and training to labs, manufacturers can reduce transition costs and staff resistance. The economic data IVD manufacturers provide can help labs sell their administrators on molecular technology. In addition, manufacturers can help labs educate physicians about the benefits and use of molecular assays by providing training and tools. 

The bottom line is that transformative changes brought on by molecular diagnostics, and affected by overall healthcare trends, are coming. The anticipated changes are largely good ones. The IVD manufacturers that survive will be those that embrace such changes sooner rather than later. 

Copyright ©2004 IVD Technology