3 min readDiagnostics – Its crucial time
In-vitro diagnostics is in the midst of a major change. Last year, the IVD industry was the centre of media attention as it witnessed one of the largest industry consolidations within the healthcare sector. The entry of medical technology giant Siemens and the aspirations of GE to enter this market, have heightened this interest, as the IVD industry is traditionally considered a low-profit business in the life sciences space.
Diagnosis and treatment are no longer considered as separate entities in disease management. The growing importance for proteomic and molecular approaches to identify disease targets and specifically target the relevant disease population, calls for more integrated approach between pharma and diagnostic companies. The industry is certainly moving from being reactive to proactive to address future healthcare needs.
So how is diagnostics industry going to evolve in the next few years?
Frost & Sullivan believes that the leaders are going to bear the torch through earlier disease detection and effective treatment.
Siemens, with the acquisition of DPC, Bayer and Dade Behring, is focusing on integrating in-vitro and in-vivo together to provide a continuum of care to patients. It has created a unique model in the industry which spans from disease prevention to detection to diagnosis to therapy to ongoing care. Frost & Sullivan expects that it will be very interesting to monitor the success of this model and its impact in the IVD industry.
Roche Diagnostics, the IVD leader, has made its objectives very clear in the market by acquiring Ventana Medical in 2008. The expertise of Ventana in immunohistochemistry is likely to strengthen Roche’s product portfolio, as it previously lacked technologies to look at protein expression. This has been noted as an important step towards companion diagnostics. The concept of companion diagnostics is to develop pharmacogenetic tests which will aid in developing safer and efficacious therapies by targeting the correct patient population.
Other recent collaborations include strategic decisions between Dako and Bristol-Myers Squibb. This particular collaboration is aimed at developing pharmacodiagnostic tests to identify patients who are more likely to benefit from the cancer drug candidates currently under development by BMS. The expertise of Dako in cancer testing will help both parties.
Another hot topic to watch out for is biomarker discovery, which is predicted to revolutionize the diagnostics field. Biomarkers are biological signatures which can be used as an indicator for a specific disease condition. Their development does however still face major challenges. The largest of these is the need for a large number of clinical samples to identify disease biomarkers and to clinically validate them, which calls for huge investments. Frost & Sullivan predicts that successful partnerships between pharma and diagnostic companies are therefore essential to conceptualize this idea. IVD giants such as Roche are already in a good position, as they have an arm in both the sectors which gives them an edge in the market. However this is still far from reality, as biomarker discovery is still confined to life sciences research. There will be several barriers to overcome before it can be applied in a clinical setting.
The industry should move-on to develop next-generation diagnostic systems that are capable of quantifying biomarkers with high precision and sensitivity. Increased collaboration between life sciences researchers and diagnostics companies should be more encouraged to translate and apply the research findings into clinically significant ones.
Although the diagnostics industry is slowly transforming and positioning itself towards personalised medicine, the major concern at this point is the economic recession. The success of any technology aimed at patient use largely depends on government support, in terms of reimbursement, in order to gain wide acceptance. History suggests that any slump in the economy is likely to affect the spending on healthcare. The economic slump in 70s and 80s had its impact in healthcare budgets, which should not repeat in the current financial meltdown.
A recent survey conducted by Emergo Group, on the current and future prospects (2009) of medical device companies provided encouraging results. More than 60% of the respondents are positive about their sales and they expect to improve in the next year. Feedback suggested that a big change in current business volumes is not expected, and it is likely to remain unaffected by these economic factors. Companies will continue to spend on their R&D programs as they are currently, which is profitable for the market.
However, what is yet to be seen is the government’s standpoint in healthcare budgets, considering the financial meltdown. It will be apt to note here the concerns of Dr. Yoram Blachar, the new President of the World Medical Association (WMA). He has urged the WMA and national medical associations to moderate the destructive impact of the financial crisis. Though a hit in healthcare budgets is inevitable in many countries, it’s all about waiting and watching to know what the exact impact is going to be on the diagnostics field. Considering that diagnostics has traditionally been given a lower priority in healthcare spending by governments, its value may be undermined further in the periods of severe financial crisis.