Mark Crawford, Contributing writer11.11.15
In-vitro diagnostics (IVD) are tests that can detect diseases, conditions or infections. They typically are conducted in laboratory and healthcare settings, or by consumers at home. IVD testing is an essential healthcare tool that can identify conditions such as cancer, diabetes, cardiovascular conditions, infectious diseases, HIV/AIDS, autoimmune diseases, substance abuse and other applications. It can provide early diagnosis of many acute or chronic conditions. IVD testing for cancer is the fastest-growing segment of the market, with a projected compound annual growth rate (CAGR) of nearly 10 percent from 2015 to 2020, according to market research firm Markets and Markets.
Analysts expect the global IVD market to reach $75 billion by 2020, growing at a compound annual growth rate (CAGR) of 5.8 percent over the same time period. In 2014, North America accounted for about 43 percent of the global IVD market, followed by Europe and Asia-Pacific (Asia-Pacific, however, is the fastest-growing region, a result of increased demand from large population groups), Markets and Markets data indicate.
The IVD market mostly is driven by increased rates of chronic lifestyle diseases in emerging economies, growing numbers of the elderly, and personalized medicine. The popularity of at-home testing also is increasing the demand for self-testing kits. Although most of the IVD “news” is about technology advancements or higher-priced “niche” testing, the vast majority of the IVD market consists of high-volume, routine tests.
“By definition, the in-vitro diagnostic market can be broken into the following major segments: hematology, hemostasis, clinical chemistry, immunoassays, molecular diagnostics, point-of-care testing and tissue diagnostics,” said Divyaa Ravishankar, team leader and senior industry analyst for the life-sciences division of Frost and Sullivan, a San Antonio, Texas-based consulting firm that provides market research and analysis. “Although the majority of the testing revenues are contributed by clinical chemistry and immunoassay segments, high-growth segments are molecular diagnostics and point-of-care testing.”
The market also can be segmented according to technology, product, end user and region. For example, the IVD market, by product, is comprised of reagents and kits, instruments, services and data management system/software. In 2014, the reagents and kits segment accounted for the largest share of the IVD product market—about 79 percent—and is expected to grow at a CAGR of 6.4 percent, industry data show.
Two top trends that are driving growth in the IVD market are increased patient awareness and patient self-testing using point-of-care equipment. A rise in the elderly population for many countries also necessitates more IVD testing.
Another catalyst for IVD growth is the Affordable Care Act—with medical reimbursements now tied to patient outcomes instead of fee-for-service, healthcare organizations are eager to do a better job of managing patient care, especially for chronic diseases such as diabetes, obesity and high blood pressure. Patients who regularly take their own healthcare data and transmit it to their medical team in real time have a much better chance of receiving appropriate medical care quickly, avoiding expensive hospital stays and more advanced or invasive treatments.
What OEMs Want
IVD manufacturers want more speed, precision, capability and reliability in their products—at a lower cost. They are eager to take advantage of rapidly expanding markets in the developing world. To be more cost effective, OEMs are pushing to reduce the volumes of fluids used and increase the overall speed and reliability of IVD systems. They also seek greater accuracy and validation for regulatory purposes.
The IVD market is highly diverse, ranging from routine blood tests to complicated molecular assays and new sequencing-based technologies. Each IVD segment essentially functions as its own industry. Hundreds of companies compete for market share within their own segments. OEMs are highly focused on the risk class and liability of their devices and must prove their products have an acceptable benefit-to-risk ratio.
“There is increased scrutiny on delivering greater consistency and safety to patients,” said Thomas Taylor, president and CEO of Foxx Life Sciences LLC, a Salem, N.H.-based provider of design and engineering services to medical device companies. “With technology advancements and new materials, companies continue to push for better results. In addition, the regulators in the U.S. and EU continue to push for more legislative regulations around IVD products.”
Not only do they want safer, higher-quality products, OEMs constantly are pressuring their contract manufacturers to reduce cost—even though they are asking for more features. With increasing technological demands, better detection limits, more assays and advanced materials, it is hard for contract manufacturers to keep costs down.
One way is improving operational efficiencies—for example, consolidating routine testing on larger instrument systems.
“Laboratories also wish to increase automation and throughput of their laboratories, while reducing time to produce their results,” said John Schueler, chief operating officer for Fujirebio Diagnostics Inc. (FDI), a Malvern, Pa.-based developer and manufacturer of critical material components as well as finished kits for immunoassays for the IVD diagnostic market. “As a result, IVD companies must expand their assay menus to provide as broad an offering as possible and consolidated on single-instrument platforms as much as possible.”
Another approach that saves time and money is reducing the amount of liquid needed for testing, thereby speeding up the analytical process and reducing cost.
“We are seeing a strong trend toward reducing the liquid volumes required for patient samples and a subsequent reduction in the volume of reagents used,” said Don McNeil, product manager for Parker Hannifin Corporation’s Precision Fluidics Division, a Hollis, N.H.-based supplier of miniature fluidic components and system solutions to the medical device industry. “The benefit here is that less blood or other sample material is required from the patient, so the cost per sample can be reduced as the reagent volumes decrease. New pump and valve technologies are often needed to meet these requirements, which typically require precision dispensing of liquids of as little as a few microliters or less.”
Point-of-Care Market
Everybody wants a piece of the point-of-care market—one of the fastest-growing segments of the IVD industry.
“Patients would rather be tested in a doctor’s office or clinic, with rapid results that can be used to make a quick diagnosis,” said Karla Horton, marketing manager for Unicep, a Spokane, Wash.-based contract manufacturer and packager of liquid and gel products. “Point-of-care testing can lower patient costs, speed up processes and help educate patients on tracking, monitoring and caring for their own health.”
“The IVD market is changing rapidly, especially for point of care,” added Blake S. Perkins, executive director for the diagnostics division of J-Pac Medical, a Somersworth, N.H.-based contract manufacturing firm that focuses on diagnostic products for the medical industry. “The point-of-care market segment, particularly with the migration of molecular biology diagnostics, is moving toward integrated, on-board platforms. Mass spectrometry capabilities in the clinical laboratories are also expanding. Both these trends reflect the clinician’s need for higher sensitivity and specificity, with low levels of analyte or pathogen.”
As a result of these demands, point-of-care devices now are being designed with more functionality and improved capabilities, such as increased sensitivity and the capacity to run a greater variety of assays. Molecular diagnostics test DNA/RNA for specific indicators of disease. Smaller microfluidic (fluid constrained to submillimeter scale) IVD devices are using laminated polymer structures and lab-on-a-chip/card technology platforms. New reagent source materials also are being developed for challenging new IVD tests.
“Critical to point of care is the concept of microfluidics, a lab-on-chip format that is gaining much attention within the in-vitro diagnostics space,” said Ravishankar. “This paves the way for faster, cheaper testing using disposable cartridges and also enables technology to be transported into a mobile set up. Technology adoption, such as digital pathology and liquid biopsy, will also boost the market valuation of modern point-of-care testing.”
“High touch at low cost” is a key goal for IVD manufacturers. The ability to offer cheaper testing by using disposables is yet another strategy for reducing the overall cost of an assay. More diagnostic manufacturers want single-use packaging solutions for their diagnostic test components such as reagents, diluents and buffers. Many of those manufacturers also are seeking clinical laboratory improvement amendment (CLIA) waivers for their testing kits, which increases their market access and creates availability of their product at additional point-of-care test sites.
“Our single-use dispensers are often used for packaging liquid diagnostic kit components that require a controlled dispense,” said Horton. “The kit components create an ease of use for point-of-care testing, especially when CLIA waivers are being pursued.”
Other Technology Advances
Microfluidics-based IVD assays and lab-on-a-chip diagnostic platforms are the hottest R&D trends in the IVD market. Research is focused on the combination of microfluidics with lab-on-a-chip, automation and multiplexing capabilities. Nanomaterials are being used to develop naked-eye and signal-enhanced assays. Paper-based IVD assays provide fast, accurate results at much lower cost, making them ideal for use in developing nations. In the near future, smartphones will have the ability to operate as point-of-care diagnostic devices.
“IVD companies are asking us for improved precision of low volume dispenses of liquids, non-pulsatile flow at very low flow rates, and precision pumps that will last the life of the instrument,” said McNeil. “We are also asked to provide manifolds and assemblies that offer complete solutions for subsystems. In combination we have been able to deliver these to improve laboratory profitability, generate better results, and increase throughput while decreasing downtime and maintenance costs.”
Consistency of the components (especially the microporous membranes) used in the assembly of the membrane lateral-flow assay is critical to the reproducibility of the assay. Over the past two years, membrane technology has greatly improved with new manufacturing equipment and test methods. “Our latest line of lateral flow membranes is twice as consistent in regards to lot-to-lot variability on flow time, compared to 10 years ago,” said Foxx Life Sciences’ Taylor.
The high-volume production of laminated polymer structures that comprise the fluid and pneumatic pathways of the microfluidic device is primarily the domain of roll-to-roll high speed laser processing, due to the complexity and small feature sizes required to produce the layers. This has been the classic production approach for volume manufacturing, because hard tooling for die cutting has not been possible to produce.
“Now, however, hard tooling has advanced and can die-cut these complex and small features, resulting in substantial productivity gains versus the laser,” said John Dillon, vice president of sales for Preco Inc., a Somerset, Wis.-based contract manufacturer of in-vitro disposable diagnostic devices. “The productivity gains can be as dramatic as 350 percent faster, with the potential of 700 percent for multiple cavity dies.”
This type of productivity gain reduces the unit cost of the device, resulting in wider market acceptance for the technology. This is critical, as the reimbursement rates already are established for existing tests that are performed by the central labs. “While the tooling cost can be high, a complete set of tools to produce all the layers is only 25 percent of the cost for the laser technology,” said Dillon. “Depending on the OEM’s product design, if a couple of features cannot be produced with a die, a hybrid approach can be taken with the die producing the majority of the features and the laser only producing the problematic features.”
Building Partnerships
IVD manufacturers must provide strong capabilities throughout the entire assay R&D cycle. They must be able to accurately plan projects, meet timelines and work closely and collaboratively with the customer’s team throughout the development process, up to the launch. Flexibility to scale up to expand or add project activity as needed to support the OEM’s own development activities is highly valued. Nimble manufacturing capabilities also are needed to respond to unexpected fluctuations in product demand or sudden market opportunities.
“IVD manufacturers must also be knowledgeable and experienced in the regulatory submission process, as well as utilize robust, sophisticated quality systems with an excellent history of regulatory compliance,” said Schueler.
Quality, reproducibility (reliability and precision) and cost-effectiveness have always been considered “table stakes” to participate in the medical device industry. According to Perkins, the best companies, whether individually or collaboratively with a partner, differentiate themselves by quickly moving product from development to commercialization, moving quickly down the manufacturing cost curve and providing a value-added, “safe” product.
“A safe product means different things to different functional groups,” said Perkins. “It may mean uninterrupted supply during market expansion, having a qualified second manufacturing source, good relations with raw material suppliers and a product that has been developed to be less complex in use. The best products consider significant input from user groups that may have multiple concerns when considering new products.”
Regulatory Issues
IVDs are regulated by the U.S. Food and Drug Administration (FDA) in the United States. The European Union continues to try to push through new legislation—for example, in 2012 the European Commission framed new proposals on how IVDs are to be regulated.
FDA oversight of laboratory developed tests (LDTs) can have a negative impact on the high growth rates of some molecular diagnostic firms that offer specialty testing. The FDA has expressed concern about the proliferation of LDTs, their marketing and the potential to mislead physicians—in 2014 the agency released a draft framework for quality, safety and validity regarding LDTs.
“The FDA found that traditional diagnostic manufacturers that comply with FDA policies to gain approval have a higher hurdle because of LDT manufacturers,” said Ravishankar. “So far, LDTs are subject to only CLIA and there has been an increased risk associated with offering LDTs.”
Another challenge for the FDA is next-generation sequencing (NGS) and its clinical applications, such as noninvasive prenatal testing. NGS, also called “high throughput sequencing,” refers to technologies that can analyze large segments of DNA. The NGS test results are then used to evaluate a person’s risk of developing diseases or conditions. NGS tests pose regulatory challenges to the FDA because they can “generate large amounts of data and consequently may have relatively broad or undefined intended uses or indications.”
Moving Forward
Several technological challenges continue to impact the IVD market. For the much larger IVD segment of routine lab testing, laboratory equipment manufacturers are working hard to add to the menu of assays and improve mass spectrometry capabilities and sensitivities. Data analytics developers are having difficulty keeping up with the rapidly expanding field of molecular diagnostics. Interpretive tools for sequencing are still being developed. Automating the process of data analysis is another challenge, especially for molecular diagnostics and point of care.
As a result, complex point-of-care tests will challenge the central lab approach to in-vitro tests. “This is especially important not only to the developed world, but also emerging markets, where investments in healthcare diagnostic testing are being pursued,” said Dillon.
“I have been developing and commercializing IVD tests for over 30 years and am amazed how quickly molecular diagnostic testing has moved onto point-of-care platforms,” said Perkins. “This is a revolutionary transformation and will be as quickly adopted as a trend as was the breakthrough conversion of batch testing to ‘random access’ testing capability on systems.”
Regulatory requirements and related costs continue to increase in the U.S. and around the world. IVD companies must have the capability to develop tests, perform the appropriate clinical studies and also be experienced in preparing regulatory submissions to the FDA and other regulatory bodies. “The products that will be most successful in the coming years will be reliable systems and assays that cover the broadest menu of tests—and also provide convenience for laboratories, with the latest data management and automation capabilities,” said Schueler.
In general, the IVD market does not change quickly because developing and gaining regulatory approval for a large menu of new tests is very costly, takes time and presents staffing challenges (ramp up, ramp down). That said, an OEM’s suppliers can be valuable partners in streamlining these challenges to get products into the market faster, and at less cost.
“OEM suppliers to global IVD companies can provide knowledgeable, experienced capabilities in R&D, regulatory and manufacturing,” said Schueler. “For companies that already have a full plate of projects and have concerns about diluting focus, an IVD OEM supplier can manage a fully integrated set of activities to bring additional products to market, while the global IVD company focuses on other core areas of their business. For smaller, early-stage companies that want to accelerate expansion of their assay menu, but don’t have enough internal resources to manage that accelerated expansion, OEM suppliers like FDI can provide the capabilities to more rapidly expand the reagent menu on a specific instrument platform.”
Mark Crawford is a full-time freelance business and marketing/communications writer based in Madison, Wis. His clients range from startups to global manufacturing leaders. He also writes a variety of feature articles for regional and national publications and is the author of five books. Contact him at mark.crawford@charter.net.
Analysts expect the global IVD market to reach $75 billion by 2020, growing at a compound annual growth rate (CAGR) of 5.8 percent over the same time period. In 2014, North America accounted for about 43 percent of the global IVD market, followed by Europe and Asia-Pacific (Asia-Pacific, however, is the fastest-growing region, a result of increased demand from large population groups), Markets and Markets data indicate.
The IVD market mostly is driven by increased rates of chronic lifestyle diseases in emerging economies, growing numbers of the elderly, and personalized medicine. The popularity of at-home testing also is increasing the demand for self-testing kits. Although most of the IVD “news” is about technology advancements or higher-priced “niche” testing, the vast majority of the IVD market consists of high-volume, routine tests.
“By definition, the in-vitro diagnostic market can be broken into the following major segments: hematology, hemostasis, clinical chemistry, immunoassays, molecular diagnostics, point-of-care testing and tissue diagnostics,” said Divyaa Ravishankar, team leader and senior industry analyst for the life-sciences division of Frost and Sullivan, a San Antonio, Texas-based consulting firm that provides market research and analysis. “Although the majority of the testing revenues are contributed by clinical chemistry and immunoassay segments, high-growth segments are molecular diagnostics and point-of-care testing.”
The market also can be segmented according to technology, product, end user and region. For example, the IVD market, by product, is comprised of reagents and kits, instruments, services and data management system/software. In 2014, the reagents and kits segment accounted for the largest share of the IVD product market—about 79 percent—and is expected to grow at a CAGR of 6.4 percent, industry data show.
Two top trends that are driving growth in the IVD market are increased patient awareness and patient self-testing using point-of-care equipment. A rise in the elderly population for many countries also necessitates more IVD testing.
Another catalyst for IVD growth is the Affordable Care Act—with medical reimbursements now tied to patient outcomes instead of fee-for-service, healthcare organizations are eager to do a better job of managing patient care, especially for chronic diseases such as diabetes, obesity and high blood pressure. Patients who regularly take their own healthcare data and transmit it to their medical team in real time have a much better chance of receiving appropriate medical care quickly, avoiding expensive hospital stays and more advanced or invasive treatments.
What OEMs Want
IVD manufacturers want more speed, precision, capability and reliability in their products—at a lower cost. They are eager to take advantage of rapidly expanding markets in the developing world. To be more cost effective, OEMs are pushing to reduce the volumes of fluids used and increase the overall speed and reliability of IVD systems. They also seek greater accuracy and validation for regulatory purposes.
The IVD market is highly diverse, ranging from routine blood tests to complicated molecular assays and new sequencing-based technologies. Each IVD segment essentially functions as its own industry. Hundreds of companies compete for market share within their own segments. OEMs are highly focused on the risk class and liability of their devices and must prove their products have an acceptable benefit-to-risk ratio.
“There is increased scrutiny on delivering greater consistency and safety to patients,” said Thomas Taylor, president and CEO of Foxx Life Sciences LLC, a Salem, N.H.-based provider of design and engineering services to medical device companies. “With technology advancements and new materials, companies continue to push for better results. In addition, the regulators in the U.S. and EU continue to push for more legislative regulations around IVD products.”
Not only do they want safer, higher-quality products, OEMs constantly are pressuring their contract manufacturers to reduce cost—even though they are asking for more features. With increasing technological demands, better detection limits, more assays and advanced materials, it is hard for contract manufacturers to keep costs down.
One way is improving operational efficiencies—for example, consolidating routine testing on larger instrument systems.
“Laboratories also wish to increase automation and throughput of their laboratories, while reducing time to produce their results,” said John Schueler, chief operating officer for Fujirebio Diagnostics Inc. (FDI), a Malvern, Pa.-based developer and manufacturer of critical material components as well as finished kits for immunoassays for the IVD diagnostic market. “As a result, IVD companies must expand their assay menus to provide as broad an offering as possible and consolidated on single-instrument platforms as much as possible.”
Another approach that saves time and money is reducing the amount of liquid needed for testing, thereby speeding up the analytical process and reducing cost.
“We are seeing a strong trend toward reducing the liquid volumes required for patient samples and a subsequent reduction in the volume of reagents used,” said Don McNeil, product manager for Parker Hannifin Corporation’s Precision Fluidics Division, a Hollis, N.H.-based supplier of miniature fluidic components and system solutions to the medical device industry. “The benefit here is that less blood or other sample material is required from the patient, so the cost per sample can be reduced as the reagent volumes decrease. New pump and valve technologies are often needed to meet these requirements, which typically require precision dispensing of liquids of as little as a few microliters or less.”
Point-of-Care Market
Everybody wants a piece of the point-of-care market—one of the fastest-growing segments of the IVD industry.
“Patients would rather be tested in a doctor’s office or clinic, with rapid results that can be used to make a quick diagnosis,” said Karla Horton, marketing manager for Unicep, a Spokane, Wash.-based contract manufacturer and packager of liquid and gel products. “Point-of-care testing can lower patient costs, speed up processes and help educate patients on tracking, monitoring and caring for their own health.”
“The IVD market is changing rapidly, especially for point of care,” added Blake S. Perkins, executive director for the diagnostics division of J-Pac Medical, a Somersworth, N.H.-based contract manufacturing firm that focuses on diagnostic products for the medical industry. “The point-of-care market segment, particularly with the migration of molecular biology diagnostics, is moving toward integrated, on-board platforms. Mass spectrometry capabilities in the clinical laboratories are also expanding. Both these trends reflect the clinician’s need for higher sensitivity and specificity, with low levels of analyte or pathogen.”
As a result of these demands, point-of-care devices now are being designed with more functionality and improved capabilities, such as increased sensitivity and the capacity to run a greater variety of assays. Molecular diagnostics test DNA/RNA for specific indicators of disease. Smaller microfluidic (fluid constrained to submillimeter scale) IVD devices are using laminated polymer structures and lab-on-a-chip/card technology platforms. New reagent source materials also are being developed for challenging new IVD tests.
“Critical to point of care is the concept of microfluidics, a lab-on-chip format that is gaining much attention within the in-vitro diagnostics space,” said Ravishankar. “This paves the way for faster, cheaper testing using disposable cartridges and also enables technology to be transported into a mobile set up. Technology adoption, such as digital pathology and liquid biopsy, will also boost the market valuation of modern point-of-care testing.”
“High touch at low cost” is a key goal for IVD manufacturers. The ability to offer cheaper testing by using disposables is yet another strategy for reducing the overall cost of an assay. More diagnostic manufacturers want single-use packaging solutions for their diagnostic test components such as reagents, diluents and buffers. Many of those manufacturers also are seeking clinical laboratory improvement amendment (CLIA) waivers for their testing kits, which increases their market access and creates availability of their product at additional point-of-care test sites.
“Our single-use dispensers are often used for packaging liquid diagnostic kit components that require a controlled dispense,” said Horton. “The kit components create an ease of use for point-of-care testing, especially when CLIA waivers are being pursued.”
Other Technology Advances
Microfluidics-based IVD assays and lab-on-a-chip diagnostic platforms are the hottest R&D trends in the IVD market. Research is focused on the combination of microfluidics with lab-on-a-chip, automation and multiplexing capabilities. Nanomaterials are being used to develop naked-eye and signal-enhanced assays. Paper-based IVD assays provide fast, accurate results at much lower cost, making them ideal for use in developing nations. In the near future, smartphones will have the ability to operate as point-of-care diagnostic devices.
“IVD companies are asking us for improved precision of low volume dispenses of liquids, non-pulsatile flow at very low flow rates, and precision pumps that will last the life of the instrument,” said McNeil. “We are also asked to provide manifolds and assemblies that offer complete solutions for subsystems. In combination we have been able to deliver these to improve laboratory profitability, generate better results, and increase throughput while decreasing downtime and maintenance costs.”
Consistency of the components (especially the microporous membranes) used in the assembly of the membrane lateral-flow assay is critical to the reproducibility of the assay. Over the past two years, membrane technology has greatly improved with new manufacturing equipment and test methods. “Our latest line of lateral flow membranes is twice as consistent in regards to lot-to-lot variability on flow time, compared to 10 years ago,” said Foxx Life Sciences’ Taylor.
The high-volume production of laminated polymer structures that comprise the fluid and pneumatic pathways of the microfluidic device is primarily the domain of roll-to-roll high speed laser processing, due to the complexity and small feature sizes required to produce the layers. This has been the classic production approach for volume manufacturing, because hard tooling for die cutting has not been possible to produce.
“Now, however, hard tooling has advanced and can die-cut these complex and small features, resulting in substantial productivity gains versus the laser,” said John Dillon, vice president of sales for Preco Inc., a Somerset, Wis.-based contract manufacturer of in-vitro disposable diagnostic devices. “The productivity gains can be as dramatic as 350 percent faster, with the potential of 700 percent for multiple cavity dies.”
This type of productivity gain reduces the unit cost of the device, resulting in wider market acceptance for the technology. This is critical, as the reimbursement rates already are established for existing tests that are performed by the central labs. “While the tooling cost can be high, a complete set of tools to produce all the layers is only 25 percent of the cost for the laser technology,” said Dillon. “Depending on the OEM’s product design, if a couple of features cannot be produced with a die, a hybrid approach can be taken with the die producing the majority of the features and the laser only producing the problematic features.”
Building Partnerships
IVD manufacturers must provide strong capabilities throughout the entire assay R&D cycle. They must be able to accurately plan projects, meet timelines and work closely and collaboratively with the customer’s team throughout the development process, up to the launch. Flexibility to scale up to expand or add project activity as needed to support the OEM’s own development activities is highly valued. Nimble manufacturing capabilities also are needed to respond to unexpected fluctuations in product demand or sudden market opportunities.
“IVD manufacturers must also be knowledgeable and experienced in the regulatory submission process, as well as utilize robust, sophisticated quality systems with an excellent history of regulatory compliance,” said Schueler.
Quality, reproducibility (reliability and precision) and cost-effectiveness have always been considered “table stakes” to participate in the medical device industry. According to Perkins, the best companies, whether individually or collaboratively with a partner, differentiate themselves by quickly moving product from development to commercialization, moving quickly down the manufacturing cost curve and providing a value-added, “safe” product.
“A safe product means different things to different functional groups,” said Perkins. “It may mean uninterrupted supply during market expansion, having a qualified second manufacturing source, good relations with raw material suppliers and a product that has been developed to be less complex in use. The best products consider significant input from user groups that may have multiple concerns when considering new products.”
Regulatory Issues
IVDs are regulated by the U.S. Food and Drug Administration (FDA) in the United States. The European Union continues to try to push through new legislation—for example, in 2012 the European Commission framed new proposals on how IVDs are to be regulated.
FDA oversight of laboratory developed tests (LDTs) can have a negative impact on the high growth rates of some molecular diagnostic firms that offer specialty testing. The FDA has expressed concern about the proliferation of LDTs, their marketing and the potential to mislead physicians—in 2014 the agency released a draft framework for quality, safety and validity regarding LDTs.
“The FDA found that traditional diagnostic manufacturers that comply with FDA policies to gain approval have a higher hurdle because of LDT manufacturers,” said Ravishankar. “So far, LDTs are subject to only CLIA and there has been an increased risk associated with offering LDTs.”
Another challenge for the FDA is next-generation sequencing (NGS) and its clinical applications, such as noninvasive prenatal testing. NGS, also called “high throughput sequencing,” refers to technologies that can analyze large segments of DNA. The NGS test results are then used to evaluate a person’s risk of developing diseases or conditions. NGS tests pose regulatory challenges to the FDA because they can “generate large amounts of data and consequently may have relatively broad or undefined intended uses or indications.”
Moving Forward
Several technological challenges continue to impact the IVD market. For the much larger IVD segment of routine lab testing, laboratory equipment manufacturers are working hard to add to the menu of assays and improve mass spectrometry capabilities and sensitivities. Data analytics developers are having difficulty keeping up with the rapidly expanding field of molecular diagnostics. Interpretive tools for sequencing are still being developed. Automating the process of data analysis is another challenge, especially for molecular diagnostics and point of care.
As a result, complex point-of-care tests will challenge the central lab approach to in-vitro tests. “This is especially important not only to the developed world, but also emerging markets, where investments in healthcare diagnostic testing are being pursued,” said Dillon.
“I have been developing and commercializing IVD tests for over 30 years and am amazed how quickly molecular diagnostic testing has moved onto point-of-care platforms,” said Perkins. “This is a revolutionary transformation and will be as quickly adopted as a trend as was the breakthrough conversion of batch testing to ‘random access’ testing capability on systems.”
Regulatory requirements and related costs continue to increase in the U.S. and around the world. IVD companies must have the capability to develop tests, perform the appropriate clinical studies and also be experienced in preparing regulatory submissions to the FDA and other regulatory bodies. “The products that will be most successful in the coming years will be reliable systems and assays that cover the broadest menu of tests—and also provide convenience for laboratories, with the latest data management and automation capabilities,” said Schueler.
In general, the IVD market does not change quickly because developing and gaining regulatory approval for a large menu of new tests is very costly, takes time and presents staffing challenges (ramp up, ramp down). That said, an OEM’s suppliers can be valuable partners in streamlining these challenges to get products into the market faster, and at less cost.
“OEM suppliers to global IVD companies can provide knowledgeable, experienced capabilities in R&D, regulatory and manufacturing,” said Schueler. “For companies that already have a full plate of projects and have concerns about diluting focus, an IVD OEM supplier can manage a fully integrated set of activities to bring additional products to market, while the global IVD company focuses on other core areas of their business. For smaller, early-stage companies that want to accelerate expansion of their assay menu, but don’t have enough internal resources to manage that accelerated expansion, OEM suppliers like FDI can provide the capabilities to more rapidly expand the reagent menu on a specific instrument platform.”
Mark Crawford is a full-time freelance business and marketing/communications writer based in Madison, Wis. His clients range from startups to global manufacturing leaders. He also writes a variety of feature articles for regional and national publications and is the author of five books. Contact him at mark.crawford@charter.net.