SAN DIEGO, Calif. (GenomeWeb News) – Industry experts at the Discovery 2 Diagnostics Conference held here this week urged microarray firms developing molecular diagnostic products to take a more global view and focus on reimbursement to increase the likelihood of their products succeeding in the marketplace.
Speakers on a panel Wednesday addressing the market for microarray-based diagnostics spoke broadly about bringing molecular diagnostics to market and the myriad factors that can determine whether a product will succeed or fail. But the primary focus was on microarray-based tests, which have thus far accounted for only four FDA-cleared molecular diagnostic products: Roche’s AmpliChip, Agendia’s Mammaprint, Osmetech’s cystic fibrosis test, and Pathwork Diagnostics’ Tissue of Origin test.
Harry Glorikian, managing partner of consulting firm Scientia Advisors, said that despite the fact that only those four microarray-based tests have been cleared in the US so far, their share of the overall molecular diagnostics market is expected to grow over the next several years. He estimated that while the global molecular diagnostics market will grow from $3 billion last year to $7 billion in 2012, microarray-based tests will grow from $160 million to $600 million during that same time period.
He urged attendees — which included representatives from molecular diagnostics and clinical diagnostics services companies — to not be “so US-centric” but rather focus on the global market. He pointed to growing demand from labs overseas, more widespread and rapid adoption of molecular tests, and an expected increase in molecular diagnostic labs in China as growth drivers for microarray firms getting into diagnostics.
However, Glorikian also said that improvements in automation and sample prep are needed before microarrays make a “real impact” on the molecular diagnostics market.
He also urged microarray-based firms to seek the highest price that they can possibly get in reimbursement for their tests. “Pricing and reimbursement will be the life and death of your product,” said Glorikian.
However, reimbursement remains a difficult obstacle for many molecular diagnostic firms, Robert Wells, a partner of public policy firm Healthfutures, pointed out. He said that although there is still some skepticism regarding genomic-based tests, payors and policymakers realize that personalized medicine is no longer a question of “if” but “when.”
Wells also said that a central challenge to healthcare reform in the US is moving from a cost-based to a value-based healthcare system. As part of this reform, Wells and other speakers at the conference repeatedly noted that reimbursement codes needs to be updated to reflect the costs that go into developing molecular diagnostic tests and the value they provide.
In addition, the panelists agreed that a firm’s sales strategy and resources would play a crucial role in driving adoption of molecular diagnostic tests.
For example, Glorikian noted that Genomic Health introduced a new in vitro diagnostic model when it decided to build a large sales force to directly target oncologists rather than focus on partnerships with clinical lab firms, enabling it to recover the substantial amount of money that went into developing Oncotype Dx. Under this model, genomic Health is operating “more like a pharmaceutical firm,” said Glorikian.
But this may not be the strategy of choice of many other molecular diagnostic firms, particularly those that are privately held and/or cash-strapped.
Over the past few months, several firms developing molecular diagnostic tests have purchased small clinical labs to offer tests themselves. This is in addition to firms that have decided to build their own labs.
David Craford, vice president of Pathwork Dx, who was one of the panelists, said that his company is pursuing a dual strategy of offering its test through its own lab while selling directly to oncologists and seeking additional marketing partnerships.
Craford and panel chairman Matthew Lorence, vice president of marketing and sales for TessArae, ended the discussion on a positive note. Both said that they have had very positive interactions with the FDA in working on commercializing array-based diagnostics. But the question remains whether a lack of resources will have a detrimental effect on the agency’s ability to quickly review and work with molecular diagnostic firms seeking clearance.