Point-of-care diagnostic–market opportunity
Apr/01/09 10:11 Filed in: Medical products | Pharmaceuticals
Over the past year, I’ve been observing the growth of a class of medical products called point-of-care diagnostic testing. These tests are easy to use, are accurate, and provide rapid results for the patient and clinician. Some are intended for home use, but the market growth is in the physician office, hospitals (especially the point of entry such as emergency departments), managed care, and other clinical areas. Several companies are in the market, including Quidel, Inverness Medical Innovations, OraSure, and Bayer. The diagnostic tests, manufactured and marketed by these companies (and several others, too numerous to mention), are used mainly for drug abuse screening, cholesterol levels, infectious diseases (including HIV), urine chemistry, blood glucose, hemoglobin A1C, prothrombin time, cancer screening, fecal occult blood, pregnancy, and other areas of clinical diagnostics. The tests can provide results in a manner of minutes, rather than sending the patient to a laboratory to await results hours or days later.
To be used in a physician’s office, these tests need to be waived by the US Department of Health and Human Services Centers for Medicare and Medicaid Services under the Clinical Laboratory Improvement Amendments (CLIA). To be waived, the test needs to meet three criteria:
As of now, there are over 110 analytes that have been approved for home use by the FDA and are CLIA-waived. To use these tests in a clinical setting, a Certificate of Waiver is necessary. The regulatory requirements are clearly less stringent than those for laboratories performing moderate or high complexity.
It is clear that these products have a number of features and benefits to the clinical market:
From a qualitative and quantitative perspective, I believe that point-of-care testing can be a critical foundation for lowering health-care costs in the US. Insulin resistance pathophysiology in Type II diabetes is becoming an epidemic in the US, and early screening can help prevent difficult to manage and potentially costly complications. Rapid testing for infectious diseases such as flu, hepatitis C, HIV, and others will be useful to managing care appropriately at a lower cost. The short-term cost may be high if we employ this type of testing at the primary care level, but the long-term savings can be large–isn’t that the goal of Obama’s healthcare plan?
By Michael W Simpson
To be used in a physician’s office, these tests need to be waived by the US Department of Health and Human Services Centers for Medicare and Medicaid Services under the Clinical Laboratory Improvement Amendments (CLIA). To be waived, the test needs to meet three criteria:
- Employ methodologies that are so simple and accurate as to render the likelihood of erroneous results negligible
- Pose no reasonable risk of harm to the patient if the test is performed incorrectly
- Are cleared by the Food and Drug Administration for home use
As of now, there are over 110 analytes that have been approved for home use by the FDA and are CLIA-waived. To use these tests in a clinical setting, a Certificate of Waiver is necessary. The regulatory requirements are clearly less stringent than those for laboratories performing moderate or high complexity.
It is clear that these products have a number of features and benefits to the clinical market:
- Alternate-site (non-hospital). There are two major benefits of this type of testing for this market: first, improved patient care by providing results faster and before the patient leaves the office. For example, a rapid strep test can provide results immediately, allowing the clinician to write a prescription for some type of antibiotic immediately, saving the patient time and worry. Secondly, for many of the CLIA-waived tests, the physician can apply for reimbursement directly from the third-party payor. This payment can be an additional source of income for the physician’s office.
- Hospital. Similarly, the rapid nature of obtaining results from these type of tests can have a strong benefit at the point of entry into a hospital, usually an emergency department. Many of these tests are already part of the armamentarium of diagnostic tests available in this area of the hospital.
- Managed care. As the third-party payors attempt to manage long-term costs of their patients, one area that is a potentially large market opportunity for point of care diagnostics is providing the ability to cost-effectively screen large number of patients to identify diseases early. For example, hemoglobin A1C testing can be used to screen for early signs of Type II diabetes. With that information, the managed care organization can proactively treat the patient, possibly reducing risks of cardiovascular disease.
From a qualitative and quantitative perspective, I believe that point-of-care testing can be a critical foundation for lowering health-care costs in the US. Insulin resistance pathophysiology in Type II diabetes is becoming an epidemic in the US, and early screening can help prevent difficult to manage and potentially costly complications. Rapid testing for infectious diseases such as flu, hepatitis C, HIV, and others will be useful to managing care appropriately at a lower cost. The short-term cost may be high if we employ this type of testing at the primary care level, but the long-term savings can be large–isn’t that the goal of Obama’s healthcare plan?
By Michael W Simpson