Molecular Diagnostics Are in a Rut. The Industry Needs the FDA
Some of the more exciting ideas in biotech are coming up in molecular diagnostics. There’s cool science at work. A number of tests have potential to cut down on overtreatment, reduce waste in healthcare, and give physicians clever new ideas on how to help patients.
But this industry, which accounts for less than 2 percent of healthcare spending, is stuck in neutral. If it’s ever going to grow into a bigger business that delivers lots of valuable information about health, the molecular diagnostics industry needs a tough, science-minded, credible regulator. It needs a thorough, predictable, and efficient third party who can comb through complex data sets and say with confidence what’s real, what’s clinically meaningful, and what’s BS.
Physicians, patients, and payers aren’t just going to do this by themselves.
Just like the pharmaceutical industry, the diagnostics world needs a strong FDA.
“We have to have some kind of pathway that gets rid of the uncertainty hanging over the whole space now,” says Kim Popovits, CEO of Redwood City, CA-based Genomic Health (NASDAQ: GHDX), a leader in molecular diagnostics.Kim Popovits, CEO of Genomic Health
While the FDA has done some things in recent years to improve how it reviews companion diagnostics that help guide treatments for cancer, there is still a vast swath of the diagnostics world that is lightly regulated at best. It allows for skepticism about these tests to fester among payers, and spawns fear among investors who worry the payers will never pay. “We’d like a process that has clarity and some certainty around how you do it,” Popovits says. “When you develop a drug, you go through Phase I, II, and III, and then you go to FDA. They say ‘yea or nay,’ and then you get reimbursed. That’s a process we need.”
For sure, the idea of tough, consistent FDA regulation of diagnostics isn’t new. The FDA has been making noises for years about getting more aggressive about regulating “high-risk” laboratory-developed tests (LDTs) that influence big healthcare decisions like how to treat a cancer patient—where the consequences of a false test can be dire. AdvaMed, the trade group for medical device and diagnostic companies, has said the FDA should regulate “higher-risk” tests. Industry leaders Brook Byers of Kleiner Perkins Caufield & Byers and Mara Aspinall of Roche’s Ventana Medical Systems unit co-wrote an op-ed for the Boston Globe in 2011 about why they think the FDA should bring more rigorous regulation to the diagnostics business.
“For one thing, both payers and physicians need and deserve to have confidence that the advanced diagnostic methods being used are reliable and accurate,” Byers and Aspinall wrote. “As it stands today, diagnostics are regulated by a variety of state and federal agencies, but there are, as yet, no clear policies in place for the approval of new molecular diagnostics.”