Imagine, for a minute, that you are a cardiologist working in the emergency department of a busy hospital. You have several patients with chest pain: some of them are having heart attacks, or are about to; others have heartburn or muscle strains. It would be great to have a diagnostic tool that quickly and accurately tells one from the other.

Physicians outside the U.S. could already have access to this type of diagnostic test. But in the U.S. it’s still pending clearance by the Food and Drug Administration. FDA-required processes for a new commercial test to gain approval for marketing and use can be costly and take years, depending on how complicated a test is.

This raises the question: Should we be making it easier for companies to bring new tests to market, rather than having a process that is so complicated and expensive that they give up? Have we set up a system so complex that we’re inadvertently stifling diagnostic innovations and possibly endangering the health of our nation?

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As vital as diagnostics are — 70 percent of health care decisions are guided by diagnostic tests — there are ever-increasing obstacles and roadblocks to getting them to market. Those coming from overseas must jump through additional barriers that are largely fueled by the perception that even well-designed clinical trials aren’t valid unless they are performed in the U.S.

While it’s essential to have policies in place to ensure that new tests and technologies are safe and effective, U.S. regulators are making it so challenging that some valuable tests never make it to patients and physicians here.

I see three main roadblocks to bringing diagnostic innovations into the U.S. market.

Roadblock 1: FDA clearance and payer coverage

The lengthy and expensive process of attaining FDA clearance does not guarantee that insurers and other payers will cover the use of a new test or diagnostic technology — an important factor in how well the innovation will be adopted by the market. Developers of diagnostic innovations must demonstrate to both the Centers for Medicare and Medicaid Services and commercial payers, which independently make coverage decisions, that the test or technology meets validity and utility requirements.

For Medicare alone, coverage requests may need to be submitted to each of the Medicare jurisdictions.

With tests taking from two to six years to gain a critical mass of positive coverage policies, I have seen too many companies close their doors simply because it was taking too long to finish the proof-of-concept stage and move on to market expansion. With a growing number of new technologies hitting the market, physicians are flooded with new options, making it extremely difficult to evaluate the growing number of diagnostic tools and decide which to adopt. Many tend to stick with what they’ve done in the past rather than adopt something new, thus slowing the demonstration-of-use phase. The volume of new tests also makes it challenging for payers to evaluate all the diagnostics that are available.

Roadblock 2: clinical adoption and value

When deciding whether to cover a new diagnostic test or technology, payers want to know that physicians are using it for their patients. Use for patients is also required to obtain a Category 1 Current Procedural Terminology (CPT) code, which is essential for physicians to be adequately reimbursed.

CMS and most payers require at least two clinical validation studies, which test whether the diagnostic tool matches its intent, and two clinical utility studies, which measure whether the diagnostic supports clinical decision-making and improves outcomes. Basically, makers of diagnostic innovations must show that they are being used properly and that physicians are using them to make decisions, such as employing a different treatment protocol or changing the dosage of a drug.

It is challenging to demonstrate clinical utility without wide-scale adoption in appropriate patient populations, and equally challenging to gain that adoption without meaningful coverage and reimbursement. It’s quite literally a chicken-or-egg situation.

Whether laboratories have developed a new test or are using one, they face the additional challenge of being unable to control whether physicians use it correctly or properly understand the results. Lab directors can educate physicians and patients about the types of tests and technologies offered, but if they can’t control how they are being interpreted or used, it makes it extremely difficult to demonstrate clinical utility.

Roadblock 3: international barriers

The U.S. isn’t the only source of clinical innovation. Diagnostic tests and technologies are being developed around the world. Bringing them to market in the U.S. requires overcoming additional obstacles. Trials performed outside the U.S. often do not meet the requirements for getting a CPT code and do not pass muster for most payers. This means additional time and money are needed for peer-reviewed studies to be done in the U.S.

Partnering with advisers who deeply understand U.S. processes and requirements can benefit international diagnostic companies aiming to enter this market. Yet when presented with the realities of the U.S. market, including realistic expectations for reimbursement and the economics of market expansion into the U.S., many international companies decide to not pursue the opportunity.

Simplifying the road ahead

I worry that the U.S. has set up a system for clearing new diagnostic tools that is so complex that we’re potentially missing out on innovative new approaches, thus preventing the possibility of giving patients the timely, necessary treatments they need. There are a few ways to expedite the process:

Parallel reviews by the FDA and CMS: Under the parallel review program, device makers can request a simultaneous, overlapping review by both the FDA and CMS. That can reduce the time between a clearance decision by FDA and a national coverage determination by CMS. Only a few companies have used this option to date.

Right to try: “Right to try” legislation gives terminally ill patients the right to use experimental medications that have not yet been approved by the FDA. Congress and the pharmaceutical industry recently adopted this policy so physicians can use a “why not try it and see” policy to determine whether an investigational drug is right for a certain patient. Taking this approach toward diagnostics could be beneficial as it speeds the availability of the test and the availability of demonstration-of-use data.

Risk sharing or coverage with evidence: On the commercial side, the diagnostic industry can consider risk sharing and “coverage with evidence” protocols that could potentially offer more expeditious mechanisms for a diagnostic to prove its clinical and economic value. Under these protocols, a payer agrees to cover a test for a limited amount of time if it feels the test has great promise but lacks proof of clinical utility. By adhering to certain data-gathering requirements, the diagnostic’s developer can gain reimbursement coverage while proving a test’s utility.

While the safety and effectiveness of diagnostic tests and technologies remain vital, we must find ways to simplify the road to clearance, reimbursement, and market adoption, not only so valuable new tests and technologies can make their way to the physicians and patients who need them, but so companies see returns on their investments.

Several international companies are opting out of bringing their diagnostic innovations to the U.S. simply because the return on investment isn’t there, either because it takes too long to get coverage or the price of the test ends up being too low — or both.

For a growing number of companies, this means not enough revenue will be made to offset development and go-to-market costs once they complete their long and winding journey to diagnostic innovations.

Rina Wolf is vice president for commercialization strategies and consulting and industry affairs at XIFIN, a San Diego-based health information technology company.

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  • It will be difficult to overcome the resistance of the health care industry to anything that improves outcomes and lowers costs. Their business model depends on people being sick, and they own congress.

  • Good column, thank you Rina Wolf. The Lown Institute just ran a critique of this piece, https://lowninstitute.org/news/are-we-over-regulating-diagnostic-tests/, and used it to take a swipe at lab-developed tests. My comment:

    Respectfully, I’m with Rina Wolf and StatNews here. The FDA should get its own house in order regarding device and drug safety, on which it has far to go, instead of focusing on shutting down LDTs, compounding pharmacists, and otherwise strengthening the monopolistic position of the pharma-device-medical-hospital-insurance-PBM industry’s “stakeholders” – to the detriment of its most important stakeholder – the patient.

    There is another side to this issue. When conventional medicine fails or reaches its limits for patients with chronic or unexplained diseases, and they learn through personal connections, journal and Internet research, and/or social media of others having better outcomes and follow up to verify, they begin to explore and enter the world of functional or integrative medicine, and learn the value of laboratory developed tests for looking at a range of factors that push the envelope behind existing FDA approved tests. They pay for these on their own dime if they decide to try one, and over time may find they generate useful, actionable information that helps the physician tailor recommendations per diet and treatments, which they follow to good effect.

    Another issue is patient access to helpful diagnostic tests. Some states, like New York, are much more restrictive than others. Patients are recalibrating back into the driver’s seat on health, as the new explosion of knowledge and real-time access to new research and developments via the web and PubMed, and patient experience via social media, is opening up the doctor-patient relationship in new and unexpected ways. Many physicians, medical group practices, hospitals, insurance companies, pharmacy benefit managers and the like understandably prefer and defend the status quo – as well as large, well established Pharma and device companies with an interest in defending, maintaining and growing market share. Patients, especially with chronic diseases and unexplained conditions who have not been well served in this milieu, increasingly look elsewhere.

    In the global, digital, highly interconnected world where whole new worlds are only a plane ride or a few clicks away, updating Right to Try rules and procedures for drugs, devices AND diagnostic tests is a powerful force that can accelerate more people accessing more helpful tests and treatments sooner at the leading edge of medicine, vs. the lagging edge. This is especially the case for diagnostic tests. Unless a diagnostic test itself is harmful or fraudulent in claims a la Theranos, let patients willing to pay for it get the diagnostics and data fall where it may, with more Consumer Reports and Yelp-type ratings of which tests are good, questionable and poor. This is the only way to generate more competition, lower costs, and accelerate progress. If the test results indicate a procedure or a prescription, the physician will serve as a check on doing what is within the realm of standard of care.

    In the world of Big Data, and in the complex epigenetic dance between our genetic variants and our cumulative, interactive exposures, more data is better, and standard or average results are often not relevant or helpful clinically to those on the tail ends vs. middle of the bell curve.

  • Seems like Ms Wolf can’t actually name a single amazing test that is being kept from American users. I don’t understand how it can be that users are flooded with new options AND that FDA and CMS are holding too many back. Perhaps these agencies are actually doing their jobs and making sure only the best products see the light of day. As a researcher in the diagnostics space, I rarely see or hear of a new product (certainly not in the cardiovascular realm) that offers any dramatic improvement over what we already have.

  • Great read!!!
    The US makes it difficult for just about everything. I run a small biz in NYC, almost not worth having a biz in NYC.

  • The very first thing anyone reading this article needs to be aware of is that the woman who wrote it works for Xifin, which is a medical IT company. In other words, they are part of the Medical Device Industry. So, why this column is being run in STAT is a question in itself. Did an Industry Rep approach STAT and ask them to run it? Is Xifin or a Medical Device Industry marketing group a financial supporter of STAT? I am not against innovation and, in some cases, a fast-track system for getting a life saving device into the hands of Physicians. But I do not want a specious marketing strategy to be the reason. Evidence-based reporting must be required. Diagnostic Error and Failures are the single most-often cited cause of Patient Death due to Medical Error, by a long way. Arthur Elstein, PhD, who is a well-known researcher in diagnostic reasoning has estimated that the rate of diagnostic error in clinical medicine is approximately 15%. That is an extraordinarily high percentage of error considering it is only one facet of the entire range of Medical Error. We need to be focusing on drastically lowering this percentage rate, not rushing new technology to the market. If a company such as Xifin can show that a new, technologically-advanced, device can help Physicians ameliorate error from the Diagnostic Process, I am all for it. But since “physician overconfidence” is the greatest cause of Diagnostic Error, that device better be impressive.

    • No one approached STAT to publish this story as part of a marketing strategy. The article is clearly labeled as OPINION as part of STAT’s First Opinion section. The author is clearly identified as working for XIFIN.

      Pat Skerrett
      Editor, First Opinion

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