A New Day Dawning for Novel IVD Products
If you're in the
diagnostics business, get out your green eyeshades and sharpen your pencils. Get ready for some serious economic analysis. And be prepared to invest a little (or a lot) more cash in getting your next product to market. That's because the FDA and various insurers are conspiring to require more clinical and healthcare cost data from you as conditions for generating revenue from your wonderful innovations. This is a potential game-changer for sure.
The "new day" actually dawned on September 7, 2006 when FDA issued its draft guidance entitled, "In Vitro Diagnostic Multivariate Index Assays [IVDMIAs]". An additional FDA guidance was issued in July 2007. Both documents were in response to the important emerging need to regulate the marketing and conduct of lab tests of multivariate molecular assays ultimately useful as companion diagnostics in so-called personalized medicine.
Suppliers will be - and already are - required to provide compelling evidence of clinical relevance and efficacy for these tests, and that obviously requires expensive clinical trials closer to the drug model than to the historical IVD model for FDA clearance, a burden that may argue convincingly for a pharma partnership. To recover these up-front costs, IVD suppliers must command premium pricing for these tests ($2,000-$4,000 for the products in evidence so far). That will require insurers to buy in -- no mean feat. That's where the green eyeshades come in; suppliers of these biomarker tests must build convincing and complete economic models that demonstrate the short-term and long-term cost savings resulting from application of the new assays. (Best of luck if you cannot demonstrate cost savings.)
But there's more. This amplified need for relevant clinical and economic data will almost certainly "trickle down" to less-novel assays of various kinds. New assays are likely to require both kinds of data, while older assays may require only economic data to justify increased IVD reimbursement compared to their currently anemic levels. This need to demonstrate cost minimization is the very same need I expressed in more general terms, and for a wider swath of producers,
. The market for green eyeshades will expand in great measure!
One more potentially discouraging word on companion diagnostics and personalized medicine: Several University of Pittsburgh statisticians have recently cast doubt on the validity of genome-wide SNP genotyping in guiding clinical decisions on individual patients. See their
for details. On the other hand, Dr. James Prudent, CEO of Centrose, provides a slightly more positive spin in his
in IVD Technology.