Doing more with less is a goal of manufacturing across all industries, including companies making IVDs. Manufacturers want to make high-quality products in large volumes but with simpler, more-streamlined machinery, and with less waste.
To learn more about the current state of manufacturing and processing technologies in the IVD industry, Richard Park spoke with Sharon Bracken, Divisional Vice President, Global Operations, Diagnostics at Abbott.

IVD Technology: What have been the most significant advances in IVD manufacturing and processing technologies during the past few years?

Sharon Bracken is Divisional Vice President, Global Operations, Diagnostics at Abbott. Prior to joining Abbott in 2005, Bracken held various senior posts with Johnson & Johnson, L’Oreal, Metrologic, and Ingersoll-Rand in supply chain, operations, engineering, and new product and process development. She can be reached via Darcy Ross at darcy.ross@abbott.com.

Figure 1. Rising procalcitonin (PCT) values with severity of sepsis.6

The incidence of sepsis is rapidly increasing, causing significant challenges for hospital critical care physicians who typically treat the condition. A common and frequently fatal condition, sepsis results from an inflammatory response to an infection. Infants, children, the elderly, and people with weak immune systems are particularly susceptible to sepsis. The infectious agent travels from the initial site infection to other organs via the bloodstream, which in severe cases can lead to organ failure, hypoperfusion, and hypotension. As a result, septic shock can occur, causing multiple organ dysfunction syndrome and death.
By definition, sepsis is characterized by a known or suspected source of infection plus two or more criteria of the systemic inflammatory response syndrome (SIRS) which are the following: fever, rapid pulse, respiratory depression, and abnormalities in the white blood cell count. However, these SIRS symptoms are very general and mimic other disorders, both viral and bacterial in nature. This presents many challenges for diagnosis and treatment. The ability to determine quickly and accurately if a condition is bacterial can lead to a more rapid diagnosis of sepsis infections, more appropriate treatment decisions, and efficient use of antibiotics.
Physicians often prescribe antibiotics to suspected sepsis patients as a precaution even before an infection is confirmed through testing. Laboratory tests can be time-consuming, and the longer a diagnosis takes, the more antibiotics and fluids are given to a patient to stop a presumed infection. However, administering antibiotics in conditions that mimic sepsis but do not actually have an infectious component can be deleterious. Moreover, some researchers believe that the imprecise use of antibiotics can worsen sepsis as certain antibiotics increase the breakdown of bacteria and the release of toxins into a patient’s bloodstream. Using unnecessary antibiotics can also damage a patient’s kidney, liver, or other organs.
Research has identified procalcitonin (PCT) testing as a rapid and dependable diagnostic approach for hospitals and physicians to identify and treat sepsis patients. This article discusses the advantages and efficiency of a PCT biomarker assay as a risk stratification tool, which allows physicians to detect rapidly the presence and severity of a bacterial infection, helping to reduce treatment-related costs and the unnecessary use of antibiotics.
PCT
PCT is produced in the thyroid as a peptide precursor of the hormone calcitonin. However, PCT is produced and secreted in a completely different manner from calcitonin. Normally, there is little to no procalcitonin circulating in the body. In response to mediators of a bacterial stimulus, PCT is produced and constitutively secreted from nearly every cell type in the body. In vira

Figure 2: Cumulative effect of antimicrobial initiation following onset of septic shock-associated hypotension and survival.7

l infections, this stimulus is lacking; therefore, PCT is not secreted in significant amounts. PCT appears to be blocked by viral mediators, which gives it a unique edge in identifying bacterial infections (see Figure 1). The procalcitonin molecule is an immune modulator with various specific putative biologic functions that distinguish it from other active inflammatory molecules.
The most interesting biologic function is that PCT is a particularly robust indicator of bacterially induced systemic inflammatory reactions. Since PCT levels are usually very low in the blood of healthy humans and systemic bacterial infections cause the protein to be produced by almost every organ in the body, an infection produces a rapid rise of PCT levels in the blood. This rapid rise of PCT levels can be detectable as early as three hours after the onset of a bacterial infection and can reach maximum values after 6-12 hours. This allows for the rapid identification of bacterial infections in a way that no other IVD test has previously allowed.
The severity of a bacterial infection can also be determined by assessing the PCT levels in the blood. Slightly elevated concentrations (<0.5 ng/ml) appear in cases of minor systemic inflammatory response, and intermediate values (0.5.-2.0 ng/ml) in significant but still moderate inflammatory reactions. These levels can often represent a localized infection. During severe systemic inflammatory reactions that are most likely due to sepsis, PCT levels will range between 2 and 10 ng/ml, and will reach very high values in cases of severe sepsis and septic shock (>10 ng/ml; see Figure 2). This dynamic analyte range makes PCT an effective tool for helping physicians assess the risk of sepsis and severe bacterial infection. Evaluating which patients are at high risk for developing severe sepsis or septic shock by measuring PCT can also aid physicians in deciding on patient management strategies, thereby improving outcomes.
A study of inflammatory markers, in which the accuracy of sepsis diagnosis was based on clinical models with and without PCT, found that PCT was the only marker that made a significant contribution to the clinical diagnosis of sepsis. In the study, PCT yielded the highest discriminative value—97% sensitivity and 78% specificity—to differentiate between patients with SIRS and those with sepsis-related conditions. The study concluded that adding PCT to a model based solely on standard indicators made a significant improvement on the ability to detect sepsis (likelihood ratio test; p=0.001), increasing the area under the receiver operating characteristic curves value for the routine-based model from 0.77 to 0.94.¹ This indicates that while physicians without PCT measurements may be able to diagnose sepsis, a physician aided with PCT measurements is able to do a better job.
This study also found that PCT is useful in assessing the severity of sepsis. High PCT levels were associated with poor patient prognosis, and a rapid decrease of PCT levels during the first week after ICU admission signified a positive prognosis.1 A slow decrease or no decrease in PCT levels 48 hours after admission was consistently associated with a poor outcome. Virtually all patients in the study who died of sepsis or related complications had PCT levels that never fell below 1.1 ng/ml.¹
PCT Biomarker Testing
Adding a PCT biomarker assay as a risk stratification tool for hospitals and physicians can help in identifying and treating severe systemic bacterial infections in patients. Quantitative diagnostic PCT biomarker assays can help to detect the production of PCT from the body’s organ systems in cases of systemic bacterial infection.
Clinicians using a PCT assay can identify patients who are at risk of severe sepsis. For example, the B·R·A·H·M·S PCT assay by Thermo Fisher Scientific enables clinicians to measure PCT levels in patients, allowing for appropriate clinical actions to be taken, with high levels indicating severe sepsis and low levels indicating minor systemic inflammatory response. This allows for quicker and better decisions to be made and ultimately more effective treatments. Unlike traditional infection diagnostic tools such as blood cultures, a PCT test can be done rapidly, with results often available to treating physicians within an hour. PCT testing has been a key element in infectious disease management in much of Europe for more than a decade. Recently, its use and applications have been increasing worldwide.
One reason for PCT’s growing popularity is that it has helped physicians in their risk assessments. If certain conditions can be excluded, others can be more readily identified, leading to more effective treatments. Healthcare professionals can make faster and better triage decisions, including therapeutic strategies as well as more targeted decision-making about hospital and intensive care unit admissions.
As with any other IVD test, understanding the kinetics and limitations of PCT testing is important. There are a few situations in which PCT levels may be low in the presence of an infection (e.g., very localized infections such as an abscess or the earliest hours of a systemic infection). Similarly, there are cases in which PCT levels may be high in the absence of serious bacterial infections (e.g., C cell carcinoma of the thyroid). As with any IVD test, it is important to keep the test’s performance parameters in mind and use the test within the context of overall clinical decision-making.
PCT Biomarker Testing in the ICU
Sepsis presents complex challenges in an ICU setting, and traditional methods of dealing with bacterial infections have many disadvantages that can negatively affect a patient’s health and increase ICU treatment-related costs. Providing hospital care for patients with sepsis is costly, according to a study that found annual U.S. hospital costs associated with septic patient care totaled $16.7 billion.² Patients with sepsis typically have longer ICU stays than non-sepsis ICU patients. Moreover, the total length of hospital stays is longer for sepsis patients than patients with other medical conditions.
Traditionally, patients with SIRS symptoms are given antibiotic therapy before sepsis is confirmed through testing. This is based on the knowledge that the critical determinant of a patient’s survival from septic shock is the early administration of antibiotic therapy: the sooner patients receive antibiotics after the onset of sepsis-related hypotension, the more likely they are to survive (see Figure 3). Such testing as white blood cell count (WBC), blood cultures, and chest x-rays are used to establish the effectiveness of the antibiotic being administered.
 

Figure 3: Receiver operating characteristic curve (ROC) of PCT improving the accuracy of clinical diagnosis.1 (Reprinted with permission of the American Thoracic Society.)

However, these tests are not always time efficient or reliable when dealing with bacterial infections. For example, it can take days for definitive blood culture results to become available; leukocyte counts and differentials can be influenced by non-infectious disorders and are known to be influenced by many common medications, which reduce their utility. This not only results in the patient receiving unnecessary and ineffective treatments but can also increase the risk of developing resistance to those antibiotic therapies that are incorrectly prescribed.
ICU physicians can use PCT testing to determine the severity of a patient’s condition less than an hour after a blood sample is taken. For critical-care physicians, timing is critical when treating severe bacterial infections as the progression of the illness is directly affected by when patients receive appropriate treatments. Research has shown that early diagnosis and treatment result in positive outcomes for patients. By monitoring PCT levels, physicians can make risk assessments earlier and treat patients sooner.
PCT biomarker testing allows physicians to identify the presence or absence of bacterial infections at an early stage and prescribe the appropriate treatments to patients. This is demonstrated in a 2010 study on using PCT to predict bacteremia in patients with community acquired pneumonia (CAP). Current guidelines recommend blood culture sampling from hospitalized patients with suspected CAP. However, this method can cause patient harm through unnecessary phlebotomies, increase treatment costs, and cause medical errors (blood cultures are subject to both false positive and false negative results with potential mistreatment ramifications).
In this subset of the proHOSP study, both PCT levels and blood cultures were taken from patients with CAP. The results showed that PCT levels accurately predicted blood cultures positivity in patients, demonstrating the potential of PCT to predict bacteremia and reduce the number of blood cultures drawn in the ICU.³ Using PCT in targeting rational blood culture utilization allows for more direct allocation of limited healthcare resources while maintaining patient safety.
Treatment-related costs such as ICU stay and hospital stay are also reduced as a result of administering appropriate treatments. Researchers have found that PCT testing can reduce the economic costs associated with sepsis. In a 2004 study of patients with suspected lower respiratory tract infections, patients with PCT values of less than 0.25 were considered non-indicative of a bacterial infection, and antibiotic use was discouraged. Patients with PCT levels between 0.25 and 0.5 μg/L were considered indicative of a possible bacterial infection, and the treating doctor was advised to initiate antibiotic treatment. For PCT values of 0.5 μg/L or greater, antibiotic treatment was strongly advised. The study concluded that PCT testing substantially and safely reduced antibiotic overuse in the patients studied and antibiotic exposure by 50%, equating to 39 fewer antibiotic courses per 100 patients. Significantly, the study found that withholding antibiotic treatment was safe and did not compromise outcomes.⁴
In a 2007 randomized trial of PCT for guiding antibiotic therapy, antibiotics were stopped when PCT levels decreased by approximately 90% from the initial value, but not before day three (if baseline PCT levels were <1 μg/L) or day five (if baseline PCT levels were ≥1 μg/L). This was in contrast to the control patient treatment group in which clinicians based the duration of antibiotic therapy on empirical rules (standard practice unaided by these PCT guidelines). The PCT guidance resulted in a median four-day reduction in the duration of antibiotic therapy, an overall reduction in antibiotic exposure, and an ICU stay of two days less without any apparent patient harm. These results indicate that using PCT testing to identify sepsis and help guide antibiotic therapy in septic patients can reduce unnecessary use of antibiotics and shorten the duration of treatment. The study authors pointed out that the judicious use of PCT testing to guide therapy had a positive effect on costs by reducing costly antibiotic doses and an impact on treatment-related costs from reductions in the lengths of hospital and ICU stays.⁵
Conclusion
Sepsis continues to be a considerable problem in hospitals and ICUs, presenting significant challenges to physicians due to time-consuming diagnostic methods and the lack of specific clinical symptoms and indicators. This can lead to suboptimal treatment decisions, high treatment-related costs, and increased morbidity and mortality.
Studies presented throughout this article found that PCT is a reliable biomarker of sepsis and bacterial infections. The PCT biomarker assay has proven to be a rapid and dependable alternative diagnostic and risk assessment tool to traditional methods such as blood cultures. ICU physicians can use the test to detect quickly the presence and the level of severity of infection and provide the most efficient and effective treatment, helping to minimize risk of progression to severe sepsis and unnecessary use of antibiotics.
In conjunction with other laboratory findings, the PCT biomarker test helps to reduce not only health risks in critically ill patients but also the treatment-related costs of sepsis. The length of ICU stays and inappropriate antibiotic treatments can be significantly reduced with rapid diagnosis, ultimately resulting in a decline in hospital costs. In the United States, FDA cleared the PCT biomarker assay in April 2008. According to FDA, PCT testing is intended for use in conjunction with other laboratory findings and clinical assessments to aid in the stratification of patients on the first day of ICU admission for progression to severe sepsis and septic shock.
The adoption of PCT testing has not been as robust in the United States as it has been in Europe. In most of Europe, PCT testing is available on a variety of common laboratory platforms. However, due to regulatory delays in the United States, many of these IVD commercial platforms do not yet have PCT testing on their North American test menus. In these days of tight laboratory budgets, lab directors have been waiting until this test is made available for their lab equipment in their institutions. It is important to note that at the systems level, this wait incurs substantial costs for both hospitals (in terms of unnecessary admissions, delayed discharges, inappropriate level of care assignments) and patients (in terms of prolonged hospital stays, loss of quality of life, and unnecessary antibiotic exposure).
Through the use of PCT testing, physicians have the ability to identify quickly sepsis in ICU patients and prioritize those who are at most risk of progressing to severe sepsis. This ensures efficient and effective treatments for patients and could potentially reduce the current high fatality rates caused by sepsis.
References
1. S Harbarth, et al., “Diagnostic Value of Procalcitonin, Interleukin-6, and Interleukin-8 in Critically Ill Patients Admitted with Suspected Sepsis,” American Journal of Respiratory and Critical Care Medicine 164 (2001): 396-402.
2. Angus, et al., “Epidemiology of Severe Sepsis in the United States: Analysis of Incidence, Outcome, and Associated Costs of Care,” Critical Care Medicine 29, no. 4 (2001).
3. Muller, et al., “Procalcitonin Levels Predict Bacteremia in Patients with Community-Acquired Pneumonia: a Prospective Cohort Trial,” Chest (2010).
4. Christ-Crain, et al., “Effect of Procalcitonin-Guided Treatment on Antibiotic Use and Outcome in Lower Respiratory Tract Infections: Cluster-Randomised, Single-Blinded Intervention Trial,” Lancet 363, no. 9409 (2004): 600-607.
5. Schuetz, et al., “Effect of Procalcitonin-Based Guidelines vs Standard Guidelines on Antibiotic Use in Lower Respiratory Tract Infections: the ProHOSP Randomized Controlled Trial,” Journal of the American Medical Association 302, no. 10 (2009): 1059–1066.
6. M Meisner, “Procalcitonin: Biochemistry and Clinical Diagnosis,” Uni-Med Science, 2010.
7. A Kumar, et al., “Duration of Hypotension Before Initiation of Effective Antimicrobial Therapy is the Critical Determinant of Survival in Human Septic Shock,” Critical Care Medicine 34, no. 6: 1589-1596.

Sean-Xavier Neath, MD, PhD is assistant clinical professor of medicine in the Department of Emergency Medicine at the University of California, San Diego. He can be reached at sxneath@ucsd.edu.
 

The late Angus Maddison, an economist from the University of Groningen, compiled data that suggests China and India were the biggest economies in the world for almost all of the past 2000 years. They only lost this position during the Industrial Revolution. It now appears that China will regain its place as the world’s largest economy, overtaking the United States, sometime during the next decade.¹
The IVD markets of China and India, two countries that account for approximately one-third of the world’s population, have demonstrated remarkable growth during the past 15 years. The IVD markets in what is coming to be known as “Chindia” have seen steady growth rates of 10-20% per year during most of that time, although the growth in India is starting from a substantially lower point. Recently, the pace of growth for both countries has increased, with China at around 25% and India at about 18%. This article will examine the similarities and differences in these two markets, the fastest growing large IVD markets in the world.
China
According to official figures, China’s economy has grown at an average rate of 9.1% during the last decade, but the real growth could be even greater. The Chinese economy has also been remarkably steady, and the increasing prosperity is one of the main drivers of IVD market growth in China. The other main driver is urbanization. Factory workers and office employees are more likely to be customers for diagnostic products than farmers in the countryside.
India
India’s economy has grown at an average annual rate of 6.1% during the last decade. Twenty years ago, faced with a financial crisis, India went to the International Monetary Fund (IMF) for help, and as part of the assistance package, India agreed to open its economy, lower tariffs, reduce licensing requirements, and allow more foreign ownership of companies in India. The result has been a remarkable increase in labor productivity and prosperity. Even though progress in economic reform has slowed down, it does continue, and Goldman Sachs has predicted that India will be the world’s third largest economy by 2050.
During the last 15 years, India’s IVD market has, like China’s, grown continuously. While the annual growth rate was around 10% a decade ago, it has increased and is currently at approximately 18%. The same two key drivers (increasing prosperity and urbanization) that are propelling China’s market have also contributed to India’s impressive growth in IVD spending.
Population
With 1.33 billion people, China currently has the world’s largest population. However, sometime between 2025 and 2030, China’s population will be surpassed by India’s, which currently has 1.14 billion people. This is because India’s population

Figure 1. Revenue figures for China's IVD market, 1995-2011, in billions of U.S. dollars.

growth rate is 1.27% while China’s, which is constrained by their single-child policy, is 0.61%. This difference in growth rates has resulted in India’s having a much younger population. Only 20% of China’s population is under 15 years old, while 31% of Indians are under that age.
It has often been said that China will be the first country to grow old before it grows rich because its working-age population (15-60 years old) will decline during the next twenty years. On the other hand, India’s younger population will result in an increase in workers throughout that period.
Both countries, albeit China to a much greater extent, will start to see increases in health problems from chronic diseases (e.g., diabetes, heart disease, and cancer), which are common in developed countries. This will be the result of an aging population, changes in lifestyle and diet, and increased economic prosperity.
Economy
The global economic crisis of 2008-2009 had much less impact on China or India than on the world’s developed economies. Both China and India saw a temporary drop in growth followed by a rapid recovery, and neither country has the continuing problems still seen in the United States and Europe. China’s current GDP growth rate is 8.2%, and India’s is 7.8%.²
Both China and India are members of the World Trade Organization (WTO). India joined in 1995; China in 2001. Therefore, both nations are parties to the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. While difficulties in enforcing and protecting intellectual property (IP) rights exist in both countries, China and India are now developers of intellectual property and will increasingly view IP rights as important to their growth. Continued, gradual improvements in IP enforcement are expected to be seen.
IVD Market Size
McEvoy & Farmer’s 2011 report on China’s IVD market estimates the size of the market to be $2.1 billion with a growth rate of about 25% (see Figure 1). Other reports give higher estimates for both market size and growth rate. McEvoy & Farmer’s 2011 report on India’s IVD market estimates the market size to be $531 million and growing at approximately 18% (see

Figure 2. Revenue figures for India's IVD market, 1996-2011, in hundreds of millions of U.S. dollars.

Figure 2). Aside from the difference in size, several characteristics of these IVD markets vary, which are discussed in more detail below.
IVD Instrumentation
While both countries are buying and using large numbers of automated IVD systems, China is a better market for instrumentation, particularly automated chemistry systems. While the total IVD market in China is roughly four times as large as India’s, its total number of automated chemistry systems is more than six times as high.
There is also a difference in the semi-automated chemiluminescence immunoassay (CLIA) market. These systems are converting low- and medium-volume labs from enzyme immunoassay (EIA) testing to CLIA testing and are keeping some of the market growth from going to imported closed immunochemistry systems. China has a vibrant domestic CLIA sector, with more than 13 local manufacturers that have supplied the market with roughly 8,000 instruments and the reagents they require. Of these systems, about 98% are semi-automated, but at least three local IVD companies have developed automated CLIA systems and are selling them aggressively.
In India, the CLIA sector is smaller, with about 2,300 semi-automated instruments. A single company, Lilac Medicare, is responsible for most of this market. There may be some local assembly of these systems, but for the most part, they are imported.
Molecular Testing
China and India have substantial differences in their molecular testing markets. At $112 million, China’s molecular market is more than ten times the size of India’s. This is due to the large volume of PCR testing for infectious diseases done in China using domestically produced kits. These tests account for about three-fourths of China’s molecular market, which sell at prices that no foreign IVD company is willing to match. As a result, the multinational companies are mostly selling instruments. However, emerging disease areas such as oncology will start to give international firms a greater presence in the molecular reagent market since there is no significant local competition.
Qiagen is the one exception to the local dominance of China’s molecular market. The company is active in two very different ways. First, Qiagen’s purchase of Digene gave it almost 100% market share of the domestic HPV market, and even though that share has been slipping due to increased competition, it is still the leader in this segment. Second, Qiagen acquired local PCR manufacturer PG Biotech of Shenzhen, the number-two supplier of PCR kits in China.
A lot of research and development activity in the area of microarrays and gene chips is taking place in China, but they are not yet a significant part of the molecular market. Such activity started in October 8, 2001, when China’s English language newspaper, the People’s Daily, reported that the country’s first Gene Chip Research Center had been established in Tianjin. Five government-funded national chip centers in China are now located in Beijing, Shanghai, Tianjin, Chengdu, and Xi’an. A proliferation of about 100 private companies has also been pursuing chip-based technologies.
India’s molecular market is the opposite of China’s with foreign products accounting for approximately 80% of the market, including both instruments and reagents, and about 20% coming from domestic production and homebrews. While India’s total molecular market is one-tenth the size of China’s, the international portion is only about one-third the size.
Clinical Labs
The structure of clinical laboratories in each country is quite different. China’s healthcare system continues to demonstrate uniformity that originates from its communist past. Historically, IVD testing has been done at hospitals where the labs served both inpatients and outpatients. The laboratory was the hospital’s second most important profit center, behind drugs and ahead of medical services, so the hospitals were unwilling to send tests out. All hospitals were owned by government bodies at various levels, state-owned enterprises, or the military. Doctors were not allowed to set up private practices, but instead worked for the hospitals.
While this is still the general structure of the healthcare system and IVD testing in China, there have been some changes. Private hospitals now exist, but they are mostly small specialty centers that account for less than 5% of the total beds in the country. Private medical practices appear to be on the upswing, but they are still a very small component of China’s healthcare system.
The total number of clinical laboratories in China is estimated to be around 20,000, which corresponds to the number of hospitals in the country. Almost all of these labs have automated chemistry systems. Many other healthcare facilities in the country, including clinics in small towns and the Chinese Center for Disease Control labs, also do some IVD testing. China continues to build new hospitals, adding about 500 per year.
Private labs also now exist in China, and they are becoming more important in the market. In most countries, private lab chains have emerged when a regional leader buys many smaller labs in the area and then continues to purchase other similar labs in other parts of the country. However, since there were no small private labs in China, new private companies are setting up their own labs around the country.
Four major groups are building national laboratory chains in China. Kingmed (Guangzhou, China) is the leader with 19 labs. Adicon (Hangzhou, China) is second with 15 labs. They are followed by Da An (Guangzhou, China), the leading supplier of locally made PCR kits with five labs, and Lawke (Beijing). While private laboratories have been slow to enter the marketplace and they still do only a modest proportion of China’s IVD testing, they will grow in importance in the coming years.
India’s laboratory structure is more complex, due to the long history of diverse institutions. There are hospitals that are run by the government, charities, and non-profit organizations as well as a group of world-class private hospitals. In addition, there is a rapidly growing number of private lab chains.
India is estimated to have more than 30,000 active clinical laboratories (other sources estimate as high as 40,000). The number of laboratories continues to grow, which is true for not only automated labs but all types of labs as new laboratories of all sizes continue to open. For example, the number of automated chemistry laboratories in India has grown from approximately 700 in 2004 to about 2,700 today. At some point, the private-sector portion of the lab market is expected to change with smaller laboratories coming under pressure from the rapidly expanding national lab chains.
Super Religare Laboratories (SRL) is India’s largest chain with 57 labs. Second is Dr. Lal PathLabs with 56 laboratories. Thyrocare is following a different path for expansion by implementing the Federal Express business model. It consolidates all of its testing in Mumbai, with specimens flown in from 20,000 local collection points during the day and testing done at night. But unlike the other labs, they are not growing via acquisition. Thyrocare is the largest processor of thyroid tests in the country and has added ToRCH to its specialties. Quest Diagnostics has established a 70,000-square-foot laboratory at the edge of New Delhi, but it is not known how well it is doing in the local market.
IVD Product Registration
IVD product registration is an area in which the two countries differ greatly. Product registration is going to get more difficult in India, but it still remains relatively inexpensive and rapid. India’s government is making changes in the regulations for medical devices and IVD products. According to industry contacts and Ministry of Health officials, a notification is expected that would bring a group of medical devices and IVDs under the regulatory framework. The authority regulating medical devices and IVDs will be the Central Drug Standard Control Organization (CDSCO) in the Ministry of Health.
In China, the situation is very different. The State Food and Drug Administration (SFDA) is responsible for regulating drugs and medical devices. Both IVD instruments and reagents must be registered, and all products must be re-registered every four years.
Two different SFDA branches are involved in IVD product registration. One is responsible for drugs, and the other for medical devices. The pharmaceutical branch originally registered diagnostics, but in July 2007, it became official that IVD products, with some exceptions, would be regulated as medical devices. (Only blood screening, RIA tests, human tissue cell reagents, and bio-chips continue to be registered by SFDA’s pharmaceutical branch, which remains more expensive and time consuming.) Eventually, it is expected that SFDA’s medical device section will also take over the remaining tests.
Products made domestically in China follow a registration process that is different for imported products. As such, the registration of locally manufactured products is considerably easier and faster than foreign products.
It takes 1-2 years to register an IVD product in China (closer to two years if the product has to be registered as a drug). However, this assumes that the application is done correctly. If there is any problem with an application, SFDA will return it, and the process will take longer. This is quite common since it is safer for an SFDA official to return an application for an error than to accept the responsibility for approving it. This issue came to light with the 2007 death sentence for Cao Wen Zhuang, one of the drug approval directors. He had approved products that led to several deaths in the country.
One of the commitments China made with its accession to WTO was to make all processes like product registration transparent and only as costly as is needed to administer them. This clearly has not yet happened in the case of IVD product registration. While it is expected that at some point all IVD products being sold in China will be registered at reasonable speed and cost, it is difficult to make a prediction as to when that will happen.
Local IVD Manufacturing
Local IVD manufacturing is a second area in which the two countries are very different. While there is local manufacturing of IVD products in both countries, China is much more prolific in this area. For example, McEvoy & Farmer’s recent report on India profiled 32 local manufacturers, while a similar China study had 138 local manufacturer profiles. In total, more than 300 Chinese companies are making IVD products.
Also, Chinese IVD companies have a greater presence in other countries around the world. For example, Mindray has an office in Brazil, while Brazilian companies distribute products by Autobio, ABON, IND, URIT, Dirui, Sunostik, Cornley, Beijing Blue Cross, and Sinnowa. Meanwhile, no Indian company has an office in Brazil, and it appears that only Transasia/Erba Mannheim and Span are present in the market.
Similarly, Mindray has an office in Mexico, and while Mexican companies distribute products by InTec, Rayto, Sinnowa, Dirui, and IND. The only Indian companies in Mexico are Transasia/Erba Mannheim and PMC, a company making rapid HIV tests.
Emerging IVD Companies
While there is more IVD manufacturing in China, both countries have impressive IVD exporters. The two companies discussed below are the best examples of what the rest of the world can expect to see from these countries in the coming years.
Mindray Medical. Mindray Medical is based in Shenzhen and is located across the border from Hong Kong. The company was established in 1991 and is listed on the New York Stock Exchange. It has more than 6,000 employees and manufactures IVD, patient monitoring, radiology, and ultrasound systems.
Historically, Mindray’s strength in the IVD markets has been hematology systems, but it has also added chemistry, urinalysis, and EIA systems to its product line. The company exported its first IVD products to the United States in 2007 and now has offices in 16 countries. Its 2010 sales totaled $704 million, of which IVD products accounted for $175 million.
Transasia Bio-Medicals. Founded in 1979, Transasia Bio-Medicals of Mumbai is a privately held company that is managed by its founder. The company is a distributor as well as a manufacturer, and has a long-term relationship with Sysmex. It represents Medica, Diesse, IMMCO, Wako, and Gen-Probe, among others.
For years, Transasia has been India’s leading IVD company. Now the company is becoming an exporter of IVD products and is growing by acquisition. ERBA Diagnostics Mannheim GmbH, a subsidiary of Transasia, manufactures chemistry instruments and has recently acquired three other IVD companies. The first was Lachema Diagnostika of the Czech Republic, which has a subsidiary in Russia; the second was the U.S. company IVAX with its immunology focus; and on January 14, 2011, Transasia announced the 100% acquisition of Diasis Diagnostik Sistemler Ticaret Ve Sanayi AS of Turkey. Diasis focuses on chemistry, hematology, and urinalysis.
Conclusion
Both China and India are inspiring success stories, lifting millions of their citizens out of poverty, providing better healthcare, and positioning themselves to play major roles in the global IVD market in the future. The growth rates of the IVD markets in each country have been very impressive during the last 15 years. It is sometimes asked if this growth will slow down in the future. As long as the two main market drivers—increasing prosperity and urbanization—continue, strong growth in the Chinese and Indian IVD markets is expected for many years. Even after 15 years of growth, the two countries combined are spending only about one dollar per person per year on diagnostics. Compared to the $25-30 per person per year spent on diagnostics in developed countries, it is clear that the IVD markets in Chindia are nowhere near market saturation.
References
1. “Becoming Number One: China’s Economy Could Overtake America’s Within a Decade,” The Economist, September 24, 2011.
2. “The World in 2012,” The Economist. Available online at http://www.economist.com/theworldin/2012.

Carl McEvoy is a partner at McEvoy & Farmer (Seattle). He can be reached at carl@mcevoyandfarmer.com.

Nonclinical diagnostic applications are typically more loosely regulated than their clinical counterparts, which is attractive to manufacturers. However, working effectively in nonclinical markets requires that manufacturers know what their nonclinical clients are seeking, what technology is required, and whether and how the final product is going to be used long-term.
To learn more about the benefits and challenges of working in nonclinical diagnostics, IVD Technology editor Richard Park spoke with Paul Kinnon, president and CEO of ZyGEM, a company specializing in DNA and RNA extraction and analysis that is active in the biodefense, animal-genetic-testing, forensics, and clinical markets.

IVD Technology: How did ZyGEM first get involved in the area of nonclinical diagnostics and developing technologies for biodefense testing?
Paul Kinnon: ZyGEM’s strategy is to develop DNA and RNA extraction technology that addresses multiple markets, including the nonclinical market. Originally the company launched DNA and RNA extraction products into basic research and forensics markets. ZyGEM’s proprietary technology for the extraction of DNA and other nucleic acids from diverse samples uses thermophilic enzymes produced by extremophile organisms. The unique properties of ZyGEM’s EA1 protease, the key ingredient in the company’s prepGEM, forensicGEM, livestockGEM, and RNAGEM families of nucleic acid extraction kits, make possible cost-effective and flexible solutions for researchers performing a wide variety of studies, including human genotyping, animal testing, and basic research.  This enzyme has characteristics that make it well-suited for DNA and RNA extraction in a closed tube, where a simple temperature shift modulating enzyme activity rapidly provides high-quality DNA and RNA that is ready for analysis by most PCR-based methods, while avoiding the contamination and low yields that can be encountered with other approaches.
Currently we have around 20 specialized kits that are globally available to extract and generate DNA and RNA from everything from blood and tissue to saliva and hair. These products have applicability in a wide range of markets, not just nonclinical biodefense testing. In addition to our own ZyGEM-brand products, we have partnerships and OEM relationships with other companies that incorporate our technology into their kits.

Paul Kinnon is President and CEO of ZyGEM. A life science industry veteran, he has more than 18 years of management experience in developing and marketing. Paul joined ZyGEM from Invitrogen Corp., where he held the positions of Vice President of Global Strategic Alliances and Vice President and General Manager of the Applied Markets Business Unit. He can be reached via Jennifer Anderson at janderson@biocompartners.com.

This kind of partnership allows us to work with opinion leaders who have unique detection technologies to test, evaluate, and develop a product with us to ensure we meet the specific market’s needs and demands. Our DNA/RNA technology is applicable to clinical diagnostics, and we are pursuing this area.
We also have partnered in the forensics market with Lockheed Martin and Morpho, which is a subsidiary of Safran. With these partners, we are developing a microfluidics platform that is currently nearing commercialization for forensic/security applications, and we expect it will have utility in the clinical testing arena as well.
Nonclinical diagnostics has been part of the history of ZyGEM since its founding, and we are now pursuing clinical applications where we believe our technologies could have potential.
Can you give us a little more history of ZyGEM’s involvement in the forensics-testing market area?
ZyGEM has had DNA extraction products for the forensics market for around five years. The DNA extraction technology is used as a sample-prep solution directly for the forensics market due to its ease of use and readily usable method.
About two years ago ZyGEM acquired MicroLab Diagnostics in Charlottesville. With that we formed a stronger relationship with Lockheed Martin as our development partner for our microfluidics device. The microfluidics platform leverages the latest in microfluidic research and development to accelerate the DNA identification process—essentially building a laboratory on a small, single chip that reduces the processing steps and time needed for DNA analysis. The device has the potential to replace and decentralize the current methodology for doing human identity testing in forensics labs.
The device will be available in a pilot stage this year and then commercialized toward the end of this year or the beginning of next year, and it will take us into the decentralized market for human identity testing for the police, military, and other federal applications.
Please tell us about the partnership and collaboration you set up with the United States Army Medical Research Institute for Infectious Diseases (USAMRIID).
We are essentially looking at pathogen threats that USAMRIID is interested in. And really it comes down not so much to an optimization of a target pathogen, it’s much more about what the customer needs in terms of where the test is carried out, how the test is carried out, and the benefits that our technology can bring to bear there.
The extraction technology that we’ve got, generally speaking, can extract RNA and DNA from almost any sample, and the beauty of it is that the enzyme is totally inactivated below 75 degrees Fahrenheit, so you can ship at room temperature. You can transport it. You can move it around. It doesn’t become active until 75 degrees. And at 95 degrees, it dies outright.
So what it gives you is a very, very rapid and very, very simple extraction technology that can be used in a laboratory, in a field, in almost any environment, and it allows you to then integrate it into technologies and other platforms. It is a very flexible system.
That’s why we’re working with USAMRIID on pathogen detection and the end-user application, identifying the real applicability and how it can be used in those areas.
Are the biodefense testing technologies that ZyGEM is working on adopted from other previously developed diagnostic technologies? If so, how did ZyGEM adopt those technologies to be used for biodefense testing purposes?
The technology we’ve developed comes from a unique strain of organisms that were identified, that allowed us to find this novel and unique enzyme. We then developed very robust methodologies for sample prep. We adopted those for different applications: forensics, basic research, livestock.
And in terms of the biodefense, it’s using the same  pathogen, the same targets that we’ve looked at for clinical and other applications, and concluding that we can use it as well in the biodefense marketplace.
The answer is that we do a bit of both: taking from other technologies, and also coming up with new ones. We optimize a previously developed technology for the customer’s need.
It’s not necessarily just the target or the assay. It’s also how the enzyme and the product are going to be used in that application that we need to consider.
You mentioned developing robust methodologies that could be used in both the lab and the field. What sort of challenges does that present to a company like ZyGEM in terms of developing biodefense test technologies that can be used in challenging environments?
Both the climate and the environment are critical factors. A lot of the technologies in the market today from the historical players require a lot of equipment and also a lot of processing and assay development. The beauty of our system is that it’s easy to use, very simple, and very robust, thereby minimizing those requirements. The main question then becomes, How do we interface with a platform that’s going to be used as part of a finished system for detection and amplification applications?
What we have to do is work very closely with the end-user to make sure that the test method that they’re using as the final method is interfaced with ours. And the beauty of our enzyme is that it is flexible. It’s easy to use. And it’s very, very robust.
We estimate the enzyme is over 100% more active than other enzymes on the market currently. We actually ship it around the world in plain packaging. We don’t need any ice to transfer it, because it’s inert. So it gives us a major advantage, and it is a lot easier to use. And the temperature profile is very  flexible, as I mentioned earlier.
But I think one of the things to emphasize is that this is one of the benefits of working with biodefense. You have got to understand what the end-user wants to do, not just in terms of how the assay has to be able to perform, but also what the environmental conditions are, and that’s one of our major advantages. It’s an advantage to understand the customer’s needs, but it’s also an advantage to have an enzyme and system that are very flexible to meet those needs.
Is this the first time that ZyGEM has been involved in developing biodefense testing technologies in conjunction with USAMRIID, or do you have prior experience developing such technologies?
I have worked with the government in the past when I was at other companies. I was with Life Technologies, and I ran the federal systems group there that was collaborating with DARPA, the government body. In terms of ZyGEM, this is the first time ZyGEM has actually had a CRADA agreement with USAMRIID. In the past, we have had tests of our technology done by independent people within the government, and that’s what has driven this CRADA.
Overall it has probably been a 12-month process of getting to know USAMRIID and others, understanding them, and getting to a pivotal point where they came back and said, “Look, we would like to form this relationship. Does this work? And can we move forward with this schedule?”
This is how these relationships develop. It is a process of getting to know them, and you actually get to know them when they evaluate your product. At that point you have formed a more detailed, strong relationship with the USAMRIID staff.
What is the process involved in developing biodefense testing technologies? Do IVD companies identify specific pathogens and develop completely new technologies for those agents, or do companies adopt current clinical IVDs to detect those agents?
In my opinion it’s very similar to any of the detection products developed these days. However, developing a product that’s in a non-IVD environment means you can avoid the long and expensive FDA approval process and other regulatory hurdles associated with a clinical product. Obviously that’s a benefit in terms of cost and time.
But even before you start that, you need to have done a lot of work on ensuring you know what the agency is after, what technology is required, and whether and how the product is going to be used long-term.
Is the product going to be adopted? You have got to ensure there’s a market for the product and that there is an opportunity there long-term; otherwise, you’ve wasted your time. Many companies in the past have gone out and built businesses on the idea that they are going to build a vaccine for the government, for example.
And in reality, with this customer sometimes no business comes until after maybe five or six years, when there is a real need, so it’s critical to understand what the customer wants and have a very strong relationship with that customer. When you reach this point, you can just transfer your relevant technology from the current marketplace into that area, and avoid going through all of the hurdles that are associated with clinical products.
What, then, are the primary challenges for IVD companies? What challenges are involved in developing biodefense testing technologies, and how do IVD companies overcome such challenges?
The biggest job is knowing the key demands and the needs for the technology. In addition, it is important to understand the environment and the marketplace in terms of whether and how the end-user is going to use the product.
These are the critical things, because you are adopting an application from a clinical or an IVD use into the biodefense marketplace. It varies by customer.
One example would be the United States Postal Service, which had a very, very rapid demand a few years ago for an anthrax detection system, and companies chased after that business and worked for it, but their products couldn’t be applied to a field or a military application in the jungle or a desert, for example.
The requirements for these different environments are very specific and very difficult to achieve, but basically the major challenge becomes understanding them, designing your product to meet those specifications, and ensuring you’re doing it in conjunction with the potential customer.
For these applications, there’s no point going out and developing a product without really understanding what the customer’s needs are, even if, as in this example, it is very close to biodefense. You’ve got to have a really good relationship, and having a collaboration like this is critical to doing that, because you’ve got to be connected with these people. You’ve got to understand their market.
And these aren’t the sort of specifications that are published in the public domain.
Another challenge I’ve heard about in speaking with other biodefense testing developers is getting access to samples. I’m thinking of anthrax, botulism, smallpox. Could you comment on that challenge and how it is overcome?
It is a significant challenge in terms of certain materials being very contagious and dangerous. You’ve got to be very careful with them. You’ve got to have a very controlled and monitored safety system. You’ve got to have special certifications so that you can work with some of these samples.
You don’t want to work with their real samples if you don’t have to, and in reality what you tend to do is get similar performance with samples that may not be as dangerous as the ones you mentioned, because obviously those are contagious and they’re very dangerous to handle.
Additionally, you get the end-user-who has probably got better access to samples-to handle them. You provide them with the solution rather than taking the samples from their facilities. That way, you actually enable the testing to occur rapidly, without taking the risk yourselves.
We have also got some safety certifications and qualifications  approvals for our R&D labs. In our laboratories we use those to test similar organisms, which may be not as virile and as dangerous as the ones that are being tested at USAMRIID.
Have biodefense testing technologies been developed for all of the major pathogens, and which agents are ZyGEM and other IVD companies still working on and developing biodefense technologies for? And what is the status of those efforts?
There are products adaptable to the end-user in terms of the diseases and infections and testing that they want. Can your product be adaptable to it? The opportunity lies in moving your technology from a clinical and IVD application into the biodefense area.
There are a few areas and a few targets we are working on that are specific to this project, and we can’t disclose those, but there are tests available for most biothreat agents that are commonly known, and everyone has them already.
I have some additional questions about your alliance with USAMRIID. You had said that USAMRIID came to ZyGEM with specific pathogens in mind that they wanted to develop custom technologies for. Do you know why they specifically selected those pathogens for developing biodefense testing?
No. They don’t disclose to us specifically what the reason is for their development need. They just said which areas they’re looking at and the types of organisms they’re going to be testing.
You don’t know whether their need is due to a lack of testing for those pathogens, or whether it was based on any intelligence they have received?
No, they have not shared with us what their reasons are. They’re obviously looking at these as areas of need, or they’re looking at them from a project point of view.  I cannot speculate on their reasons—you would need to ask them.
I found it interesting that you said that it was a 12-month process getting to know USAMRIID and developing that relationship.
When I say a 12-month process, it’s not, “Hey, we’re now going to start working and doing diligence with USAMRIID.” It’s more informal-you have to form relationships with the right people. You have to get to know them. You have to explain to them what your technology is and get them to understand and see the benefits.
It could be a shorter process. But in reality it takes time for anybody within the government and these bodies to become comfortable with new technologies. You need to demonstrate that your technology is applicable, that your product could be used, and it’s going to be a benefit to them.
You can’t rush these things. If you look at the general sales process, even the basic research element in industry still takes a long time, although it probably doesn’t take 12 months. It can take anything from five to 10 to 20 days, or two years depending on what you’re selling and to which market.
The process involves getting the people that you’re going to be working around comfortable with you. It involves convincing them that your technology works and that other people are using it, that there have been publications that have covered it, that it’s important, and that you’re a reasonable company to work with.
There are ways the process can be hastened, such as when a BAA or a grant comes out, or an application comes out that can be accelerated, but really it’s just building confidence with the body that you’re working with. You’re communicating to them that you have a technology that’s applicable, that it can benefit them, and that there’s ways to work together to benefit their project.
What efforts will ZyGEM continue to make in order to develop biodefense testing technologies that are better, faster, more efficient, and more cost-effective?
We have a war chest with enzymes in our culture collection. In that portfolio we can make and develop new tests that are better, faster, and easier. These could involve core enzymes or a combination of enzymes, or the combination of our enzymes and others’ technology.
We have assays and methods that will enhance and simplify the current cumbersome methods that are used. And over time we’ll bring those out-as we develop them, as we optimize them for specific applications, be they for specific pathogens or other applications of the technology.
And we’ve talked about the fact that we’re working with Lockheed Martin and Morpho on our human-identity applications. That system is basically a DNA extraction, CR, and capillary electrophoresis detection platform all in one cartridge and one device.
And we are developing decentralized applications that could move into point-of-care biodefense testing in the future. There also is the potential to do whole swaths of microbes in one assay-anything from zero to 30 different tests in one assay on our integrated system.
And we’re looking at moving these applications forward in the future, along with other novel technologies that we intend to bring to bear for biodefense and other applications.
These biodefense testing efforts that you’re currently involved in with USAMRIID---are you planning to develop relationships with other government bodies, branches of military, first responders in major cities, and the like?
The answer is both yes and no. Yes, we expect to develop stronger relationships over time because this data will be shared internally within the U.S. government and other federal applications. And it will give us more visibility and more coverage within those organizations.
We already have a customer advisory board that involves people in government for our human-identity testing system with Lockheed Martin; however, we won’t use this avenue to contact end-users such as first responders and the like. We’ll do that through our partners, Lockheed Martin and Morpho.
We have talked about ZyGEM’s involvement in forensics. Is ZyGEM involved in developing technologies for other areas in nonclinical testing; for example, veterinary testing, food, and environmental? How does ZyGEM plan to parlay its biodefense testing technologies and experiences into developing other non-clinical diagnostic technologies?
We do expect to use the technology in other areas. We are already investigating those areas, including veterinary applications, food testing, and others, and whether our DNA and RNA extraction technology can be applicable. That is another area where we see the growth of the business in the future, because these markets are not as regulated as the clinical market.
We see these areas as an opportunity for us to expand our business and the applications of our technology. We will work with the partners that we’ve got, and we will also secure new partners in those markets to allow us to expand our business and grow more efficiently and effectively.
Of course, one of the major complaints that IVD companies have is that FDA regulation is just so incredibly difficult and stringent that it can take a very long time to get FDA approval for a clinical test. Is it a relief knowing that the regulatory hurdles for nonclinical testing are not as high?
Yes, one hundred percent. Obtaining regulatory approval for clinical products is cumbersome. It’s very costly to do the tests for FDA to get certification, not just in the United States but also in Europe.These applied markets, as we can call them, or adjacent markets, are a lot easier to penetrate, and give you a lot more access. All the large companies are looking at these markets for growth as the NIH budgets and other clinical budgets are cut.
It represents a big opportunity. Innovative companies and companies with strong relationships with the people in these markets will grow and succeed. And, really, it’s an area of expansion that everyone is looking at because it’s easier to enter. There are opportunities there, but you have to be aware of what the opportunities are and really know how to grow the business in the context of their special requirements.
What future challenges do you foresee in developing biodefense testing technologies?
The major limitation is the limited budget, the changing structure for defense spending, and funding going forward. We all know that both the United States government and foreign governments are short of funds, and the budgets will be cut, and they’ll reduce their spending, and they’ll look for much more collaborative partnerships.
So, as long as you’re in a collaborative mood and you’re willing to share your R&D costs, you can expand. There won’t be the massive government spending saying, “Here’s one million dollars; develop something for me.” It’ll be much more collaborative.
Additionally, the companies have to be nimble and creative to get their own work in with the partners. The biodefense people will be looking for innovative technologies that can both save money and do things simpler, quicker, and easier.
And everything is going to be decentralized. Everyone wants a simpler technology that can be used much more rapidly in a decentralized way.
The need for innovation, the technologies demanded, and limited budgets are the main challenges.
What, then, are your overall views and impressions of the nonclinical diagnostics market? More specifically, what are the business prospects of the nonclinical diagnostics market moving forward?
This is where the growth and expansion for the industry of life science in general is going to come from. The market for clinical applications is massive and will be bigger. But the industry’s opportunity to grow fast and expand in the nonclinical area is definitely a prime reason for people’s focusing on it now.
It will be one of the most competitive markets because everyone will be there, whether you’re small or large. And, really, it’s a matter of having innovative technology that is effective and can be used in a very, very simple way.
I think small, innovative companies can and will grow here, and they will probably be the most optimal partners for the biodefense industry in the short term.
You know, there are companies who’ve spent a long time nurturing this marketplace, growing it, but the larger providers are now looking at it as well, and you can see from the recent reports at the JP Morgan conference that everyone is aware of the nonclinical marketplace, and everyone is trying to move into it.
But I think the biggest challenges will be, as we’ve talked about, making sure that you understand the use of the product, the technology, where it can be utilized. And can you partner effectively and collaborate well with the end-users in a manner that they need?

After more than 35 years of industry and FDA device and diagnostic evolution, it remains difficult to measure regulatory effectiveness because we are still seeing a moving target in submission reviews and enforcement. Examples include performance testing, clinical data, and quality system regulation (QSR)-related information and claims. While the FDA-requested Institute of Medicine report published last summer called for a rewrite of the 510(k) process, in part based on perceived 510(k) process deficiencies, the effectiveness of that process can be better managed and measured without a total rewrite.
FDA management can fix the 510(k) process starting with top-level conceptual policy updates separating compliance from the content of a submission. FDA leadership, including leadership at OIVD, should do the following:
1. Rebalance staffing and duties between headquarters and field investigations. Requesting more manufacturing data in submissions is not necessarily the best path to take to resolve or evaluate QSR compliance. Product quality failure after initial demonstration of substantial equivalence (SE) on production units should be addressed via inspections and enforcement.
2. Coordinate all aspects of lab developed tests (LDTs) and companion diagnostics (CDx) as a single project rather than issuing a series of unrelated guidance documents.
3. When products have significant QSR issues, treat new regulatory submissions for these products as de novo submissions requiring clinical data and other actions to address the specifics of the recall trends.
Regarding the IVD SE process, OIVD should further clarify that comparing individual product aspects to more than one predicate is acceptable. Technology doesn’t really matter as long as the clinical data show results are correct and understood by the physician  to be substantially equivalent to information from products previously available, with no new significant questions of safety or effectiveness. This approach should be formalized for OIVD. For the rest of CDRH, where there has not been clinical data, ODE should apply the de novo 510(k) process (for low- or moderate-risk products) using the existing pre-IDE and IDE processes, allowing IDE exemptions for nonsignificant-risk studies. Alternatively, providing product-specific guidance within the current regulatory framework, such as exists for infusion pumps, would be appropriate. The draft infusion-pump guidance clearly demonstrates the flexibility of the current 510(k) system.
So, as a policy matter, what will it take to update systems as described? The answer is enhanced leadership, not new 510(k) regulation. And, as mentioned, a reallocation to the field of resources to premarket reviews is warranted as well.
CDx assays, whether LDTs or PMA tests, are usually qualitative tests that do not reveal cut-off or precision. This is a potential source of patient harm since the products may vary. A coordinated regulatory policy is needed. This policy should require all qualitative tests to have their cut-offs and precision published. For example, when a patient is declared “mutation positive,” physicians would understand the cut-off being used and whether that cut-off and precision from a CLIA lab is the same as those of a product reviewed by FDA. This approach would go a long way to address the Genentech petition to regulate laboratory LDTs and allow regulatory effectiveness to be measured.
It is not in patients’ interest for FDA to say, “Use only the FDA-approved companion diagnostic tests,” because that is not how the LDT and FDA-regulated markets operate. This is a true opportunity for regulation to actually serve and protect the public. To improve and measure regulatory effectiveness, FDA leadership should focus inspection resources on QSR compliance and on OIVD leadership’s using current regulation to improve the 510(k) process. LDTs, companion diagnostics, and other IVDs need to provide physicians a consistent interpretation. This means a requirement that all test labeling document cut-off and precision.
Finally, where quality systems fail, FDA should hold the most senior individuals in management responsible, rather than shareholders. Imagine if a consent decree disqualified top executives when not closed in three years, and policy-based civil penalties should be considered for top executives rather than shareholders. Holding executives responsible financially would surely improve quality. With these changes, we can improve medical products and processes and the measurement of regulatory effectiveness.

Glen Paul Freiberg, RAC, is president, RCQ Consulting (Rancho Santa Fe, CA). He can be reached at glenf92067@aol.com.

Part 1 of this column appeared in the March 2011 issue.
 

Hemoglobin A1c (HbA1c) is uniquely suited for diagnosing diabetes and monitoring its treatment with a specific number of tests per year (typically on a quarterly basis). Recent initiatives by the United Nations, the World Health Organization, and the International Diabetes Federation (IDF) have addressed the worldwide diabetes epidemic and the need for better diagnosis and treatment. At the 2010 National Glycohemoglobin Standardization Program (NGSP) Manufacturers’ Forum, the president of IDF asked manufacturers of commercial HbA1c assay systems to consider how they could provide accurate, reliable HbA1c assays to underdeveloped countries that do not have the resources to make currently marketed tests available.
Some current percent hemoglobin A1c (%HbA1c) assay methods include ion exchange or affinity column chromatography-based tests, which are expensive and not

Figure 1. Reflectance change during a lateral-flow assay.

mobile. Other methods incorporate immunoassays (requiring refrigerated storage) and/or relatively expensive cartridges and meters. A technology has now been developed that allows for the design of low-cost systems that meet the needs for diabetes testing in developing countries.
At the heart of this technology (described in U.S. patents 7195923 and 7695973) is a separation matrix that has been chemically modified to contain both negatively charged groups and boronate groups. When the pH of the buffer flowing through the matrix is acidic, positively charged glycated and non-glycated hemoglobin bind to the negatively charged groups. When the pH is basic, hemoglobin loses its charge and is released from the ionic binding. At basic pH, boronate binds not only cis-diols but also the glucose of glycated hemoglobin holding the glycated hemoglobin in the matrix. The hemoglobin bound in the matrix under each condition is quantified by taking reflectance measurements of the membrane using a glucometer-type meter. The membrane can be incorporated into simple strips that can be stored without refrigeration. Systems utilizing this technology allow for more widespread diagnosis and monitoring of diabetes in developing and developed countries.
Separation Matrix Preparation
The base membrane used for the separation matrix is a hydrophilic, permeable membrane with a pore size large enough to allow red blood cells to enter. Both the Sartobind A membrane by Sartorious and the Lateral-Flo membrane by Porex Corp. (Fairburn, GA) can be used as base membranes. Movement of the sample and buffer through the membrane can be either lateral or vertical.

Figure 2. Parallel variation in two measurements.

The work described below used the membrane in a lateral-flow configuration. The membrane thickness affects the measurement sensitivity, with a thicker membrane capable of binding more hemoglobin. A 10-mil-thick membrane did not bind enough hemoglobin to provide a suitable signal in the prototype assay system. A thickness of at least 15 mil was needed to provide adequate binding and signal. Since reflectance measurements are taken on the membrane, the membrane surface should be relatively uniform to minimize strip-to-strip variations in results. Both membranes that were tested contained covalently linked carboxylic acids groups, which function as the negatively charged groups in the technology.
Boronate groups were added to the membranes by covalently binding m aminophenylboronate (APB) to carboxyl groups already in the membrane using the carbodiimide 1-ethyl-3 (3-dimethylaminopropyl) carbodiimide (EDC). As the reaction time progresses, more boronate groups are added to the carboxyl groups on the membrane. The number of carboxyl groups is reduced, and total hemoglobin binding decreases. As the number of boronate groups increases, glycated hemoglobin bindingreaches a plateau. The reaction timing is controlled to achieve the optimal glycated binding without significant total binding loss.
Assay Details
The assay is started by adding the first buffer (pH 6.5) and taking a reference reflectance measurement. The 100% reflectance for each strip is set to the measured reflectance of a reference material. The reflectance of the membrane immediately after the strip is inserted into the meter is the logical reference to use. However, the assay precision is improved by using the reflectance of the membrane with buffer flowing through it as the reference. In one experiment, the precision of assays of a normal sample was 5.5% if the reference was the membrane alone. The precision was 2.9% when the reference was the membrane with buffer flowing through it.

Figure 4. Schematic of the test strip used in the prototype assay system.

The blood sample is added and rinsed through the membrane as the buffer continues to flow. This buffer also contains a detergent that hemolyzes the red blood cells to release the hemoglobin. At pH 6.5, non-glycated and glycated hemoglobin are positively charged and bind ionically to the negatively charged groups on the matrix. This binding is rapid and occurs as the hemoglobin moves through the matrix. At pH 6.5, the boronate groups are in a configuration that does not favor the binding of glycated hemoglobin, therefore the bound hemoglobin will contain the same proportion of glycated hemoglobin as the sample. A sufficient volume of buffer is added to remove non-bound (excess) hemoglobin from the matrix. The amount of hemoglobin bound to the matrix is measured as total hemoglobin using reflectance measurements. The light source is an LED at a nominal 430-nm wavelength, using the 415-nm absorbance peak of hemoglobin for quantitation.
After the first measurement, a buffer at pH 9.5 is added and rinsed through the membrane. The charge on the hemoglobin changes, and the ionic binding is reversed. The boronate groups change to a configuration that favors the binding of glycated hemoglobin as it is released from the negatively charged groups. The binding to the boronate groups is rapid and occurs as the hemoglobin is moving through the matrix. The resulting amount of hemoglobin that is bound to the matrix is measured as

Figure 5. Plots of ratios vs. %HbA1c for five patient samples.

glycated hemoglobin using reflectance measurements. Both binding steps are rapid and allow the matrix to be adapted to either flow-through or lateral-flow methods.
Figure 1 shows the change in reflectance (%R relative to the dry strip reflectance) as an assay progresses. When the first buffer is added (1), the reflectance drops because the matrix becomes more translucent. After the blood is added (2), the reflectance drops as the front of the high concentration of hemoglobin moves through the matrix, absorbing the light. As the non-bound hemoglobin rinses through the matrix (3), the reflectance increases to a plateau, due to the ionically bound hemoglobin remaining in the matrix, and a reflectance measurement (A) is made. When the second buffer is added (4), the reflectance initially drops and then increases as the non-glycated hemoglobin front rinses through the matrix (5). The reflectance increases to a plateau due to the glycated hemoglobin remaining in the matrix, and the second reflectance measurement (B) is made. The two reflectance measurements (A and B) are used to calculate the total and glycated hemoglobin concentrations. The ratio of glycated hemoglobin to total hemoglobin is used to calculate the %HbA1c in the sample as described below.

Figure 6. Bias plot (Scripps reference method).

The assay as described can be performed using 2-5 μL of sample. The membrane thickness and the number of hemoglobin binding sites affect the minimum sample volume. The sample tested can be capillary blood, venous blood drawn in an anticoagulant (normally EDTA), frozen venous blood drawn in anticoagulant, and controls. Using the prototype system, 85 μL of the first buffer and 55 μL of the second buffer are adequate to perform the rinses. The assay time is approximately five minutes. After adding the first buffer and reading the wet strip blank, too long of a delay in adding the blood could allow too much buffer to pass, and rinsing will not be complete. Therefore, the blood sample should be added within 15 seconds of reading the wet strip reflectance. The timing of adding the second buffer is not critical.
The assay methodology offers several advantages, including the following:

•    In the ionic binding step of the assay, not only excess hemoglobin is rinsed through the strip but also other non-binding elements in the blood sample. This removes possibly interfering substances from the measurement area before the reflectance measurements are made.

•     The hemoglobin bound with the first buffer will have non-glycated and glycated hemoglobin amounts in proportion to their concentrations in the sample. Therefore, a change in the amount of hemoglobin bound with the first buffer will result in a proportional change in glycated hemoglobin bound with the second buffer. Variations in the total hemoglobin measurement are therefore parallel to variations in the glycated hemoglobin measurement. Using the ratio of glycated to total hemoglobin to calculate %HbA1c eliminates the effect of the variations. Strip-to-strip variations due to component and manufacturing variations are therefore minimized. This can be seen in Figure 2, which shows the results from multiple assays of the same sample. The variation in the concentration of the total hemoglobin bound in the different assays is parallel to the variation in the concentration of the glycated hemoglobin. The precision results provided in Figure 2 illustrate that the imprecision of the ratios is a lot smaller than would be predicted from the total and glycated hemoglobin measurement imprecision, if these two were completely independent.

•     Both total and glycated hemoglobin are measured at the same location on the matrix using the same light source and detector. Variations between the two measurements are minimized, resulting in improved assay precision.

•     The membrane is composed of only covalently bound, negatively charged carboxyl and boronate groups, and does not contain any labile proteins or labeling compounds. The membrane is inherently stable without refrigeration, making it ideal for use in developing countries.

•     The membrane is the assay’s only active component and can be incorporated into a number of designs that can be simple and inexpensive, or more complex.
Prototype System
To demonstrate the feasibility of the technology to measure %HbA1c, it was incorporated into a simple assay system. The components of the assay system include buffer A (pH 6.5), buffer B (pH 9.5), the test strips, which are stored in a desiccated

Figure 7. Stability of %HbA1c assay results.

(silica gel) vial, an applicator for easily adding samples in a line across the membrane, and a handheld glucometer-type reflectance meter (nominal 430-nm LED; see Figure 3). The test strip holder on the meter contains a well that is positioned at the end of the membrane when the strip is inserted. Buffers are added to this well, which flow into the membrane. The test strip holder was also designed with slots to hold the two legs of the applicator and correctly position the line containing the sample onto the membrane.
A Porex Lateral-Flo membrane with added boronate groups was prepared as described above and was used in a test strip design to take advantage of the lateral-flow properties of this membrane (see Figure 4). The membrane sits on a plastic support, a reflective layer lies over the read area, and an absorbent sink collects the buffers and rinsed blood. Buffer is added at one end of the membrane through the well on the meter, and the blood sample is added just downstream from the buffer. The buffer moves the sample through the membrane to the sink at the other end. Binding occurs throughout the membrane, and reflectance measurements are taken between the blood application site and the sink through a hole in the plastic support.
Test strips were assembled as cards using a manual lamination process. Ribbons of the different components were positioned onto the plastic base, which was pre-coated with adhesive and pre-punched with holes. The components were held together using layers of double-stick adhesive tape. Each card produced 50 test strips, which were cut from the card using a guillotine cutter. Batches of up to 5000 test strips were made using this process.
Calculations
In the prototype system assay, the meter measures the reflectance of total hemoglobin and glycated hemoglobin as described above. These reflectance measurements are converted to hemoglobin concentrations, which calculate the glycated to total hemoglobin ratios. The ratios are converted to reference %HbA1c values by standardizing the ratios to the %HbA1c results of a reference method. The reference method used in the studies described below is a boronate affinity HPLC method which has had its %HbA1c test results standardized to the Diabetes Control and Complications Trial (DCCT).

Table 1. Linearity and precision.

The relationship between reflectance and concentration is non-linear and is determined experimentally for the type of membrane being used. Samples with different hemoglobin concentrations are passed through the membrane under conditions in which no hemoglobin binds. Reflectance measurements are made for each concentration as the sample flows through the measurement area. The concentration versus reflectance data are fitted with a four parameter logistic equation. This equation converts the reflectance measurements made during the assay (e.g., at points A and B in Figure 1) to their corresponding hemoglobin concentration values.
The glycated hemoglobin concentration (point B measurement) is divided by the total hemoglobin concentration (point A measurement) to obtain the glycated-hemoglobin-to-total-hemoglobin ratio. This ratio is linearly related to the HbA1c concentration measured by the reference method (see Figure 5). Figure 5 shows the data obtained from multiple assays of five patient’s blood samples. This linear relationship (slope and intercept) converts ratios to referenced %HbA1c values.
Performance of the Technology
The performance of the technology was studied using the prototype system. The study included comparing assay results to a reference method, measuring assay precision, determining assay linearity, and determining test-strip stability using temperature stress.
Results from assays of blood samples using the prototype system were compared to results of assays of the same samples using an NGSP secondary reference method. NGSP provides a means to standardize HbA1c test results to two studies that established the relationship between HbA1c concentrations and long-term problems in patients with diabetes: DCCT and the United Kingdom Prospective Diabetes Study (UKPDS). NGSP sets the criterion for comparing test results from new technologies to reference method test results, based on the bias between the two sets of results. The test method is certified when the criterion is met.
Frozen whole blood samples from forty patients were obtained from the University of Missouri, a primary reference lab for NGSP. These samples were assayed by the boronate binding HPLC method which NGSP uses as a secondary reference method. They were then assayed in duplicate using the prototype system. The samples ranged from 5% HbA1c to 11% HbA1c, with nine between
5% and 6%, seven between 6% and 7%, and twenty-four between 7% and 11%.
The least squares regression analysis of the results from the assays using the prototype system versus the results of the reference method gave a regression formula of Y = 1.21X – 0.12, in which Y is the prototype A1c and X is the reference A1c. Statistical analysis shows that the slope was 1 (P=0.394) and the intercept was 0 (P=0.397). The correlation coefficient R2 was 0.971, showing that the %HbA1c results obtained using the prototype assay demonstrate a good correlation to the results obtained using the reference method. Figure 6 shows the bias plot between the prototype assay results and the reference method assay results. The 95% confidence interval range of the bias results falls within the 2011 NGSP criterion for certification of traceability to the DCCT and UKPDS study results.
The precision of the prototype system was measured by the results of multiple assays of venous blood samples (stored at 4° C), which were conducted by two operators using two lots of strips for two days. Each operator ran eight assays each day for each lot (32 total assays for each lot). Overall results for lot one were a mean %HbA1c of 5.2 with a CV of 3.1%. The results for lot two were a mean %HbA1c of 5.4 with a CV of 2.8%. A two-way analysis of variance of the data showed there was no statistically significant day-to-day variation (P=0.238) or operator-to-operator variation (P=0.238).
The linearity of the assay was demonstrated by the results of assays of admixtures of a normal and elevated control. The results illustrated that the assay has a linear response up to at least 16% HbA1c and that the precision is consistent throughout the linear range (see Table I).
The stability of the membrane was determined by putting the test strips though an accelerated aging process and storing them at an elevated temperature of 45° C. (An earlier study showed that the ionic binding of hemoglobin to the membrane was affected by exposure of the membrane to 75% relative humidity for an extended period of time. The test strips were therefore stored in closed vials containing silica gel desiccant.) Assays of a venous blood sample that was stored frozen in aliquots were carried out at different storage intervals and used a new vial each time. Test strips that were stored at room temperature were also used to assay the blood at each storage interval as a control for possible changes in the blood samples over time. Figure 7 provides %HbA1c assay results for the different storage intervals for both sets of strips.
Compared to the day-zero results, the assay results demonstrated no evidence of test-strip decay at 45° C in measured %HbA1c for at least 365 days. The test strips stored at 45° C provided the same results as the room-temperature-stored strips at each storage interval. Results from these assays also showed that there was no decay in the total hemoglobin binding or the glycated hemoglobin binding at either temperature for 365 days. This demonstrated that the negatively charged groups and the boronate groups maintained their functionality at both temperatures during the storage time.
Preliminary results testing possible interferents indicated that hemoglobin variants HbAE, AD, AC, AS, bilirubin, and lipemia did not alter assay results. It is expected that there will be little interference by blood components since most will wash through the read area before measurements are taken. Compounds must not only bind but also absorb light at the measurement wavelength in order to interfere directly. In addition, any reduced binding of total hemoglobin would be compensated by a parallel reduction in glycated hemoglobin due to the use of the ratio to calculate %HbA1c.
Conclusion
With the use of the described binding technology, it is possible to develop a low-cost HbA1c assay system. The system can utilize a handheld reflectance meter for measurements. The chemically modified membrane is stable, which allows the system to have adequate stability without refrigeration. It is therefore possible to develop a relatively low-cost system that can be used in developing countries. The technology can also be incorporated into more sophisticated systems for point-of-care use.

Ralph McCroskey, PhD is manager of R&D at Scripps Laboratories Inc. He can be reached at mccroskey@scrippslabs.com

Lowry Messenger, PhD is director of business development at Scripps Laboratories Inc. Reach him via Philip Baddour at pbaddour@scrippslabs.com

Congressman Leonard Lance (R-NJ) introduced legislation to promote the development of meaningful treatments for patients with chronic or rare diseases. The “Modernizing Our Drug and Diagnostics Evaluation and Regulatory Network (MODDERN) Cures Act” (HR 3497) would modernize the U.S. drug and diagnostics evaluation and regulatory network by encouraging the discovery and development of new treatments for the many diseases that have few or no options. It would also create a system that rewards efficiency and effectiveness to the benefit of all people with chronic diseases.
The bill would promote the production of co-developed diagnostics by allowing the developers of new diagnostic tests to apply for a temporary Healthcare Common Procedure Coding System (HCPCS) code until a permanent code is established, allowing for more timely access to new diagnostic tests. In addition, the legislation creates incentives for drug and biologics manufacturers to develop diagnostic tests for their products by granting additional periods of data exclusivity.
Some industry analysts believe that Lance’s proposed legislation would have very little direct benefit for the IVD industry. “Rather, the bill would appear to have a more indirect impact on IVD companies and clinical laboratories by encouraging drug and biologics companies to seek out companion diagnostic development opportunities,” said Jonathan S. Kahan, JD, a partner at Hogan Lovells LLP (Washington, DC).
Kahan noted that the legislation does provide an excellent summary describing the potential benefits of companion diagnostics and advanced diagnostic products. “The bill specifically highlights the uncertain regulatory and reimbursement processes that lead to the lack of development of drugs and diagnostics,” said Kahan. “The bill also points out deficiencies in intellectual property protections for therapeutic treatments as a barrier to the development of products intended to treat rare diseases.”
Kahan added that the legislation proposes mechanisms to overcome such barriers to development. For example, section 102 of the bill aims to ensure that drugs and diagnostic tests are reimbursed at higher rates when they are used together. But while higher reimbursement for IVDs certainly would be welcome, it may not be helpful if the pathways to market remain unclear.
Section 103 states that if the validity of a companion diagnostic test can be established using peer-reviewed literature, the drug or biologic for which the test is used will be granted additional marketing exclusivity. This should encourage drug and biologic companies to seek out or develop companion diagnostics, but it may benefit IVD companies only through their interactions with drug companies.
“The bill also appears unlikely to benefit IVD products directly because it does nothing to address the uncertain regulatory pathways that exist for IVDs and laboratory-developed tests (LDT),” said Kahan. “While the bill may encourage drug and biologics companies to seek out new IVD methods, it does not provide a mechanism for ensuring how such products will be regulated, either as IVDs or exempt LDTs, once they are developed.”
Other industry analysts are even more skeptical that the legislation will benefit the IVD industry. “While well intentioned, I am highly doubtful that the bill will result in adding any new incentives toward the development of dormant therapies or innovative diagnostics for chronic diseases, unless the regulatory and payment processes are streamlined and focused to expedite approval of affected drugs and IVDs,” said Thomas M. Tsakeris, president, Devices and Diagnostics Consulting Group (Rockville, MD).
Tsakeris pointed to the fact that the bill creates an additional bureaucracy, the Advanced Diagnostics Education Council (ADEC). This group is charged to “promote an improved understanding of key concepts related to innovative diagnostics by recommending standard terms and definitions for use by patients, physicians, healthcare providers, payers, and policymakers.”
“Although some representatives from the IVD industry would likely participate in ADEC activities, I am highly doubtful ADEC would be able to come to any agreement on definitional issues anytime soon related to innovative diagnostics that could accommodate all stakeholders and consumers,” said Tsakeris.
At the same time, some analysts believe the legislation could benefit the IVD industry. “The way the bill leverages existing incentives for drug development to encourage the development of companion diagnostics could provide significant benefits to the IVD industry,” said Bradley M. Thompson, JD, an attorney at Epstein Becker Green (Washington, DC).
“Under the bill, in exchange for developing a companion diagnostic with a new drug, a pharmaceutical company would be rewarded with six to 12 additional months of market exclusivity and patent protections for that drug,” said Thompson. “Depending on the drug, an extra six to 12 months could mean a lot of money, which is a clear incentive to get companion diagnostics out there. This could lead to more partnerships between the pharmaceutical and IVD industries, and creating new markets for IVDs that can predict responses to new drug therapies.”
Thompson added that the bill’s proposed reforms for reimbursement of novel diagnostics should also benefit the IVD industry. The bill establishes factors to be used in current gap-filling calculations, creates a reimbursement advisory panel with patient, clinician, and technical expert representatives, and calls on the Department of Health and Human Services to examine and develop improved rate-setting processes.
 

Late last year, FDA issued its guidance for industry and FDA staff titled “Enforcement Policy for Premarket Notification Requirements for Certain In Vitro Diagnostic and Radiology Devices.” In the guidance document’s introduction, FDA states that it proposes the “downclassification” and exemption from 510(k) requirements of the Class II devices that are the subject of the document because the safety and effectiveness of those devices is sufficiently established. These devices also have, according to FDA, sufficiently controlled risks that general controls are able to manage.

For the Class I devices that are the subject of the guidance document, FDA intends to propose an amendment to the classification regulations to exempt these devices from 510(k) requirements that currently apply.  

While FDA proposes and finalizes these downclassifications and exemptions, it will exercise enforcement discretion with regard to 510(k) submission requirements for the relevant devices.

The devices subject to enforcement discretion per this document include the following:
•     Clinical chemistry devices, such as iron (non-heme) test systems, breath-alcohol test systems, and others;
•     Hematology devices, such as platelet-adhesion tests, euglobulin lysis time tests, and others;
•     Immunology and microbiology devices, which include hemoglobin immunological test systems.

Background and Impact of the Guidance Document. Peper Long, associate director for external relations at CDRH, told IVD Technology in an e-mail that the IVD industry, via AdvaMed, presented the agency with a suggested list and process for determining a set of devices that, given current knowledge of those devices and the right controls, can safely be exempted from the premarket notification requirement. FDA considered this list and the process itself while performing its own analysis. “As a result,” wrote Long, “FDA identified many of the same devices industry had identified, but also several others.”

Long wrote that FDA believes that the guidance document “shows FDA’s commitment to using the least-burdensome regulatory controls that still allow for the safe and effective use of medical devices.” It also, she wrote, “shows that FDA is open to adjusting this balance for a particular device to reflect our experience and new regulatory tools and methods that become available.”
Long believes this document benefits IVD manufacturers by freeing up resources---“theirs and ours,” she wrote---for premarket review of devices that “really need that effort.”

A Drop in the Bucket? Thomas Tsakeris of Devices & Diagnostics Consulting Group (Rockville MD) believes that FDA’s intent to exercise enforcement discretion for certain IVDs reflects better focus of agency-oversight resources, but “only slightly.” He points out that the listed devices are relatively low-risk, conventional assays which he suspects “represent analytes for which 510(k)applications are not submitted with any high frequency.” Impact on the IVD industry, he believes, will be minimal, and his assessment is that the guidance is a nominal attempt by FDA to demonstrate regulatory flexibility. “However,” he says, “this flexibility is being applied in diagnostic test areas where flexibility is not significantly sought by the IVD industry.”

Tsakeris adds that while the reclassifications and exemptions described in the guidance document may not be particularly significant, what is remarkable is the method FDA is using-issuing a guidance document rather than “implementing formal and burdensome rule-making procedures.” FDA has been criticized in the past, he says, for attempting to extend its regulatory reach via guidance document rather than the making of rules, such as with the regulation of multivariate assays and LDTs. In this case, however, Tsakeris believes that reducing the regulatory burden, “even for a few low-risk IVDs,” via the guidance process will be well received by industry. 

Last December, PwC released a new report, “Diagnostics 2011: M&A Surges, Companion Diagnostics Accelerate, and Early Detection Offers New Prospects.” This report provides an overview of merger and acquisition deal activity in the IVD industry during the past two years and the factors driving it, an assessment of the development of new prospects for early detection testing, and a review of significant events for the development of personalized medicine. The report also includes an in-depth discussion about trends in companion diagnostics and business model considerations for pharmaceutical companies.
The report highlights how multibillion-dollar deals in the IVD industry during the first seven months of 2011 more than tripled the merger and acquisition deal value from 2010 to more than $15 billion. According to the report, investor interest in the global IVD market is expected to grow in 2012-2014, following a surge in merger and acquisition deal values, an acceleration of companion diagnostics partnerships, and the emergence of new prospects for early detection testing.
Interest in the IVD market is coming from not only existing players but also new entrants such as financial investors, life sciences research groups, clinical laboratories, and medical technology players. The report expects that the competitive landscape in the IVD industry will be redefined by new market leaders and larger deals as players bulk up on market share. However, sustained momentum of companion diagnostics partnerships with pharmaceutical companies will depend on actions taken by governments, regulators, payers, and industry to support diagnostics innovation.
The report covers the following themes that will likely shape future merger and acquisition activity in the IVD industry until 2015:
•    New entrants continue to add IVD businesses. For some newer IVD entrants, recent deal activity may represent only a beginning. Such companies could pursue additional acquisitions to maintain the momentum that is required to achieve critical mass quickly.
•     Historical major IVD companies responding in kind. If current IVD industry leaders do not respond with significant acquisitions, they may lose market share in key segments. Making deals might be challenging because of increasing competition for the most compelling new technologies.
•     Private equity companies searching for opportunities. An increase in bigger private equity–backed deals is likely to crystallize, provided capital markets do not slump.
•     Major pharmaceutical companies buying molecular or tissue diagnostics businesses. Though this kind of deal activity has been slow in recent years, some major pharmaceutical companies will be increasingly motivated by the confirmation of the drug-diagnostic co-development model. Those drug firms that are not part of a company with a significant IVD division have started building business development teams with diagnostics expertise to support better licensing decisions. Some of these companies will also consider buying a diagnostics business to deepen their expertise, increase technology options, and provide direct commercial access.
•     Significant players moving into early detection. Several companies are driving the development of a wave of new tests for early detection of major cancers. Only time will tell whether the market adopts the concept of using noninvasive IVDs for early detection. If it does, a major diagnostics or pharmaceutical company could move to acquire one or several of the promising new ventures in this field.
“It is obvious that PwC spent a great deal of resources to produce this market research piece,” said Harry Glorikian, MBA, managing partner at Scientia Advisors LLC (Cambridge, MA). “The near-comprehensive M&A and partnering coverage utilizing only public sources in the IVD industry is commendable, particularly in this quickly changing industry. The outlook on cancer screening and early detection is consistent with our internal thought leaders and, to our knowledge, is the first publicly available thought piece.”
“However, where the report predominantly falls short is in understanding the complex interactions within and beyond diagnostics, and how these forces will affect personalized medicine,” added Glorikian. “Whether by choice or by necessity, the report opted to concentrate on trendy segments within diagnostics. However, traditional diagnostics players will continue to play an instrumental and strategically adept role to remain dominant forces.”
“The PwC report hints at the improving state of the IVD industry,” said Manfred Scholz, PhD, MBA, president, Scholz Consulting Partners (Medford, MA). “While some of the M&A activity was encouraged by favorable valuations in the recent recession, the key drivers are structural changes in the IVD industry. The key themes are and continue to be content and utility.”
Scholz noted that content is important and reflected in acquisitions such as Ipsogen and Caris. Ipsogen provided a set of new assays to Qiagen, and Caris anchored patient stratification for Miraca Holding. Meanwhile, utility is reflected in the acquisitions of Accuri and Claros. Although neither Accuri nor Claros offered fundamentally new technology platforms to their buyers BD and Opko Health, they made their respective technologies much more user friendly. For example, Accuri put flow cytometry on the benchtop, and Claros delivered immunoassays from fingerstick samples that can be performed anywhere without the need for venipuncture, centrifuges, and power-hogging lab systems.
Additional information about this report is available here.