By: Don Powers

What a rollercoaster ride the IVD industry has been on over the last five years! Major changes on the economic, political, and scientific fronts have sent IVD manufacturers, regulators, and laboratories scrambling to cope with the new uncertainties. Every event seemed to serve as a constant reminder of the global nature of our industry.

The move toward “personalized medicine,” in part a consequence of the Human Genome Project, is finally happening. Although much more is still around the corner, reliance on IVDs to determine a therapeutic path is increasing, as is the recognition of diagnostics as a companion for therapy. Among the successful pioneers are the genetic tests for sensitivity to warfarin, which are now available on automated platforms. Each year, about two million people start warfarin therapy to prevent or treat blood clots, and 43,000 cases end up in emergency rooms with warfarin-related problems. Only insulin is implicated in more adverse drug events than warfarin.

Screening tests for the ability to activate clopidogrel and for certain proteins to assist in selecting therapy for breast and other cancers have appeared. Strategies for when to incorporate the use of a companion diagnostic in drug development and the associated regulatory hurdles and implications are just two of the new challenges facing IVD manufacturers. The need for sensitive and specific tests for biopharmaceuticals was nowhere more evident than in the case of the entry of toxically contaminated heparin into the world market.

The issue of patenting genes was thrown up in the air by a recent U.S. District Court ruling that genes are products of nature and cannot be patented. Myriad’s BRCA 1 and BRCA 2 patents were summarily voided, at least pending appeal. It is difficult to predict the ramifications for the genetic testing industry as well as targeted therapy based on genetic test results should the court’s decision be upheld.

Multiplex assays that can simultaneously identify many different organisms in a sample by their DNA are using increasingly creative detection methods. Nanoliter genomic systems are bringing “the affordable genome” closer to reality by permitting human genome analysis that is expected to approach $10,000 per person, and perhaps even much less. At an informational meeting later this year, the Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS) will be exploring how “disruptive technologies” allowing whole-genome analysis will change the healthcare landscape.

Microfluidic lab-on-a-chip technology features a network of channels and wells etched onto glass or polymer chips. Picoliter volumes are moved in a controlled manner through the channels enabling sample handling, mixing, dilution, electrophoresis and chromatographic separation, and staining and detection on a single miniature integrated testing system.

Closed, self-contained, molecular analytical systems automate on-board sample preparation and real-time PCR (polymerase chain reaction) amplification and detection functions to produce timely, accurate results with minimal risk of contamination. These systems are designed to purify, concentrate, detect, and identify targeted nucleic acid sequences, delivering test results directly from unprocessed samples.

DNA genotyping methodologies for red cell antigens, HLA (leucocytes) and platelet-specific antigens, for both donors and patients, will also impact the blood transfusion services. Providing better matched blood to individuals who require frequent transfusions could significantly reduce the immunization rates. More widespread use of this technology will depend on the reimbursement situation and availability of automated instruments in order to reduce total test time and the need for specialized individuals to perform the testing.

The downturn in the global economy has created less demand for IVDs around the world, or at least a reduction in the frequency and level of testing. At the same time, the global IVD market has continued to expand, with robust markets developing for IVD products in China and India and increased access in emerging countries to newer laboratory medicine technologies.

Consolidation of the IVD industry continued the trend begun in the 1990s, with a new diagnostics industry leader emerging from Germany. Siemens’s acquisition of Bayer, Dade, and DPC, as well as its partnership with Syva, made it the largest global IVD player almost overnight, and signaled a noteworthy trend toward the integration of diagnostic imaging and laboratory diagnostics. Molecular markers are a factor in bringing these two diagnostic areas together. Although GE HealthCare’s acquisition of Abbott Diagnostics fell through, Beckman Coulter purchased Olympus’s Lab-Based Diagnostics Business, and Inverness continues to pursue several new acquisitions. Labs are challenged to keep track of which players are partners and which are competitors. A continuation of the consolidation trend is now involving acquisitions of blood bank reagent manufacturers by larger diagnostic companies. To highlight the enhanced identity of the IVD industry, AdvaMed recently created a new IVD division, and the Global Harmonization Task Force (GHTF) has created an IVD subgroup within its Study Group 1.

The IVD marketplace has been affected by the continued proliferation of integrated health networks in the United States, and in the UK and other parts of the EU there has been a move toward managed service contracts, as more hospitals subcontract the management of their diagnostic laboratory services. These managed service contracts can last for five years to fifteen years and upwards. This has meant further belt-tightening for industry, much leaner manufacturing processes, and reductions in overall manufacturing costs while trying not to compromise product quality or performance. Some major corporations with IVD interests have downsized 10–20% of their workforce worldwide, and the diagnostic sectors had to take their share of the cuts as well.

Perhaps the biggest changes have come on the regulatory front. Regulatory affairs professionals anguish that all the rules seem to have changed over the past five years, and they expect the rules will continue to change for some time to come. Medical device reporting for IVDs, once relatively infrequent because IVDs were thought to have inherently low risk, are now fairly common for even routine assays. This is supported by the oft-quoted Lewin study, which concluded that 60-70% of medical decisions are influenced by IVD test results, also demonstrating the value of diagnostic testing since the cost comprises less than 5% of total hospital costs.

The 510(k) process has been under scrutiny (industry cynics say “under attack”) by Congress, and the current review of CDRH’s policies has led to a significant increase in submission requirements and performance expectations for IVDs. The effects have been especially evident over the last 18 months. Clinical outcome studies are now being required for IVD submissions, with much less emphasis on performance studies that demonstrate substantial equivalence and more emphasis on matching outcome claims for existing devices. It is feared this will significantly inhibit the introduction of novel technologies, and the situation is compounded by the fact that the guidelines and regulations to implement many of these changes for some technologies are still under review at FDA.

The retirement last year of OIVD’s founder and first director, Steven Gutman, roughly coincided with a new government administration and a change to more aggressive leadership at FDA. A tougher enforcement stance has accompanied the appointment of Margaret Hamburg as FDA commissioner. The success of the OIVD experiment was affirmed by expanding its scope to include other diagnostic medical devices. It remains to be seen how OIVD will face the challenges of the new technologies, broader intended uses, and growing congressional concern over device safety and limited resources that cannot possibly keep pace with all these demands. Plus, the IVD industry has been demanding that FDA level the playing field with respect to laboratory developed tests (LDTs).

Commercial labs are worried about the prospect of overbearing regulations on the novel tests they have been introducing, perhaps exemplified by the controversial draft guidance on IVD multivariate index assays. This guidance provoked a heated debate between IVD manufacturers and commercial laboratories over an uneven playing field, and conveyed the message that FDA was serious about considering LDTs within its jurisdiction. The regulation of LDTs to the same standards as IVDs has the potential to directly impact many genetic tests. FDA also clarified the analyte-specific reagent regulations with updated FAQs and renewed enforcement.

More regulations for IVD manufacturers to contend with have proliferated in the EU as well, including new environmental legislation, chemical safety regulations, the batteries directive, and recent updates of the packaging, low-voltage, EMC, and machinery directives. The additional oversight of clinical trials required by the revised MDD, as well as by FDA, has helped ensure a more rigorous process but has also added further complexity and costs to product development. The regulation of software for IVDs is under active review in the EU and will most likely be implemented in the next two years. In the meantime, manufacturers of software-controlled analyzers are receiving varied interpretations, with individual Notified Bodies issuing differing opinions. New regulations are also appearing in China, Singapore, India, Pakistan, Saudi Arabia, Morocco, Russia and the Commonwealth of Independent States, South Africa, Argentina, Brazil, and Mexico. Regulatory hurdles have increased the complexity of introducing devices based on new technologies to the domestic and overseas markets.

The promise of the harmonized GHTF regulatory system has not yet been realized, although the active participation of many of these “new” countries in the GHTF continues to raise hopes. It is still too early to say, but with the exception of China, there is at least a chance that some progress toward harmonization could be made in the next few years—and this would have a very positive impact on the IVD industry.

The other force for harmonization has been the series of global standards from ISO/TC212, which replaced mandated European standards and helped avoid a proliferation of local standards. The acceptance of metrological principles of trueness, traceability, and uncertainty by U.S. clinical laboratories is still in its infancy, but standards for ensuring traceability of calibrator values and determining their uncertainty have been adopted throughout most of the industry. The Joint Committee for Traceability in Laboratory Medicine has developed from a small grassroots effort supported by a few astute companies to a mature, successful resource to the IVD industry. On a practical level, however, there are still too few certified reference materials and reference methods, and immunoassay manufacturers in particular suffer from a dearth of reliable reference systems.

Most IVD manufacturers have jumped on the Lean/Six-Sigma bandwagon, and many provide consulting services to their laboratory customers as a way to secure their loyalty. A new emphasis on risk management for IVDs was sparked by the revision of ISO 14197 in 2007, which included a major annex devoted to IVDs. This may be spilling over to the clinical laboratory, as evidenced by the development of a new series of CLSI risk-management documents influenced by ISO 14971. Widespread clinical laboratory accreditation to ISO 15189 is promoting equivalent quality of laboratory operations around the world and has even reached the Unites States, with CAP establishing an accreditation program based on ISO 15189.

Lab automation has increased over the last five years, particularly in high-volume settings. The AACC exhibit floor is overflowing with automated immunoassays, fully integrated lab systems combining clinical chemistry and immunoassay testing with modular automation, and everything from total lab automation to modules and tracks that connect different analyzers. The cost of these automated systems has come down and companies are providing creative financing options that allow even medium-size labs to invest in workcells, front-end processing automation, and total track systems with refrigerated storage, which has come out only in the last five years, allowing rapid hands-free retrieval of specimens for reflex testing and repeat/add-ons. Transfusion services are also seeing increased use of automation because of costs and the lack of highly trained individuals to perform more complex tests.

The last five years have seen increasing complexity in the type and design of IVD systems, in particular the sophisticated software that run the devices, standalone programs that support RF and wireless technologies, and increasing use of the Web to disseminate lab results to patients on their iPhones and to transmit results (e.g., glucose meter results) from patients to their healthcare providers. Roughly 17-18 billion glucose tests were performed last year worldwide, and major advances have occurred in diabetes care. Coupled insulin pumps and glucose meters are forming a closed loop. HbA1c has emerged as a major diabetes test, and tight glycemic control protocols in ICUs have raised FDA’s interest in the accuracy of glucose meters used in hospitals. Other notable trends are the rise of Vitamin D testing and newborn screening moving to mass-spectrometry platforms.

In the hospital, both laboratory professionals and clinicians have become much more knowledgeable about the utility and limitations of point-of care (POC) testing. The test menu that can be performed in the ER, the ICU, and at the bedside is extensive. Instruments such as the Piccolo have built-in checks that make it possible for non-laboratory staff to perform comprehensive chemistry testing. i-Stat instruments can be linked to patient monitoring devices to track blood gases and cardiac enzymes. Labs no longer look upon POC testing as a competitor, but as another way to supply appropriate care to all patients. In fact, some small hospitals have closed their labs, using POC testing for urgent testing and sending out routine tests to the high-volume labs within their regional network. Most institutions have established processes for implementation of POC testing and no longer leave decisions to bring in a particular system to the discretion of the physicians. The increasing use of POC tests has raised the challenge to coordinate POC testing and central lab testing, especially to ensure comparable results.

There has been continued refinement and improvement in POC and patient self-testing devices, expanding menu (e.g. PT INR), and expansion of certificate-of-waiver labs. CMS estimates that nearly 60-65% of all labs nationwide have certificates of waiver, allowing them to conduct rapid tests using simple devices. More and more companies are developing these kinds of devices and seeking FDA waiver clearance. The menu of waived tests has exploded as has the number of companies offering these types of devices.

Finally, there were two major events that capped the five-year period ending in mid-2010. The first was the exciting launch of National Children’s Study last year, after eight years of intensive research and planning, by the National Institutes of Health to improve the health and well-being of children. National Institute of Child Health and Development’s partners in the National Children’s Study are the National Institute of Environmental Health Sciences, the Centers for Disease Control and Prevention, and the U.S. Environmental Protection Agency. The study will examine the effects of environmental influences on the health and development of 100,000 children across the United States, following them from before birth until age 21. The study will investigate factors influencing the development of conditions such as asthma, cerebral palsy, learning disabilities, birth defects, diabetes, asthma, and obesity. At each stage, there will be an attempt to unravel the complex relationships between genetics, a broad range of environmental exposures, and the children’s health and development. Families who participate in the National Children’s Study will come from 105 study locations (counties or groups of counties) across the United States.

The second major event was the passage of the U.S. Health Care Reform Act after a long and drawn-out political battle. The excise tax imposed on the medical device industry to help pay the cost of providing near-universal coverage to Americans will certainly affect the manufacturers’ bottom lines, but it is too early to predict how the resulting expansion of healthcare services will affect hospital and commercial laboratory testing, which could be a net positive for the IVD industry that supplies their reagents, instruments, calibrators, controls, and automated testing systems. Stay tuned for the next look back at the IVD industry in 2015.

I would like to extend appreciation to my friends and colleagues who helped me reconstruct the events that marked the last five years in the IVD industry, particularly to Dave Armbruster, Alan Cariski, Cynthia Corona, Robert DiTullio, John Eckfeldt, Tom Frame, David Frank, Barbara Goldsmith, Alberto Gutierrez, Ben Jacoby, Bill Koch, Fred Lasky, Yvonne Middlefell, James Nichols, Arleen Pinkos, Nancy Sasavage, Sheila Woodcock, Christina Yang and Marcia Zucker. We eagerly look forward to an even more exciting five years ahead.

 

Don Powers is president and principal consultant at Powers Consulting
Services (Pittsford, NY). He can be reached at powers@frontiernet.net.