IVD in 2019: Eight Out-of-the-Box Predictions

Kalorama Information is the Publisher of The Worldwide Market for In Vitro Diagnostics, 11th Edition, the definitive report on the IVD market.  Based on our 2018 research, here are 8 little-discussed trends that we expect to unfold in 2019:

1 Another Year of “Prove to Play” for Tests– Yes, your new 2019 diagnostic test product will be effective, logical and popular with users. But Kalorama Information notes that even the most logically useful tests — such as tests that avoid high-cost treatments on patients — will still need to address scientific proof. “While it would seem that companion and precision would be ‘money well spent,’ in reality there is a major breakdown of the system in too many cases.” said Melissa Elder, pharmaceutical and IVD analyst for Kalorama Information. “The decision for payor approval for diagnostic testing comes from strong, even overwhelming, scientific evidence that the testing will have a direct impact on outcomes and in many cases this is difficult to show meaningful benefits.” The question asked will be- if the test is performed prior to initiating treatment is there a significant improvement in clinical response and outcomes over those that do not have pre-treatment diagnostics?

2. Watch Liquid Biopsy – Imaging Pair Ups in 2019: Liquid Biopsy will see gains in acceptance, but there are challenges. This recent article in Nature sums up some of them: https://www.nature.com/articles/s41576-018-0071-5. Difficulty with collecting enough relevant sample from patients, and enough CTCs or cfDNA in samples is an issue. Also IT difficulty and cost, need for better error correction, magnitude of interpretation. To varying degrees progress will be made on these fronts, because the promise of non-invasive technologies is a winner. But Kalorama Information thinks that in 2019, its most interesting use will be as a complemntary tool, assisting other tests. For instance imaging studies, liquid biopsy has been shown to reduce false negatives when used in conjunction with imaging tests. A 2018 study published in Translational Oncology demonstrated that a combination of liquid biopsy and radiological imaging enabled visualization of the occurrence of clonal redistribution after discontinuation of anti-EGFR mAb therapy, as well as emerging RAS mutations during therapy with anti-EGFR mAb indicating resistance.

A Catalog of Kalorama Information’s reports, along with its other partners, can be found here:  http://bioinfoinc.com/market-intelligence-catalog/

3. Hungary, Romania and Eastern Europe Shine in 2019: Clinical diagnostics and analytical instrument companies both are seeking emerging markets for growth. Eastern Europe is gaining attention as a reachable market with promise.

Hungary has become interesting for the sale of analytical devices as it is increasing helathcare R&D spend. According to Instrument Business Outlook. https://instrumentbusinessoutlook.com/hungarys-rd-spending-shows-significant-gains/ R&D spending is rising on a global basis. In 2016, estimated spending for the 34 countries that make up the OCED grew 2.3% to $1,266 billion at current prices and purchase price parity (PPP). At well above this growth rate, Hungary made tremendous gains in R&D spending in 2017, according to figures released last month by the Central Statistical Office. Hungary’s 2017 R&D spending grew 21.1% to HUF 517.258 million ($1,811 million at 285.6 = $1 ). Between 2016 to 2017, the country’s R&D as a percentage of GDP rose from 1.20% to an estimated 1.35%. Meanwhile Kalorama Information noted in its recent IVD study that Hungary continues to expand its private health market which currently represents about 38% of spending. Hungary’s health spending represents about 7.5% of GDP, or $21 billion annually.

Of particular note is histology spending which Kalorama estimate will grow 8% each year in the next five years, as Hungary addresses lung and breast cancer patient populations. Romania is another growth country for clinical diagnostics, with growth rates of 10% in histology testing and nearly 5% in overall IVD spending. Both countries are dealing with higher than regional and European rates of breast and lung cancer. Romania which continues to develop its action plan for diabetes and bring prevalence rates down from the current 12.4%.

4. If You Want to Sell a Laboratorian in 2019, You’ll Have to Network: Laboratorians generally have a closer, in-person social network that they rely on for recommendations, advice or information about products and services. That’s according to IMVInfo’s “2019 Trends in Marketing to Clinical Diagnostic Labs.” (https://imvinfo.com/product/marketing-to-clinical-diagnostic-labs-report /). The report cites credibility factors and buying habits among laboratorians, what influences them, what sites they use and how best to approach laboratorians.

5. Revenue Decreases at Labs, Lab Consolidation and Pushback on Vendors: The impact of PAMA and resulting Medicare Part B cuts on testing is being felt. 2019 will bring more pressure on spending and consolidation for lab customers. And that means downstream impact on IVD vendors. A survey from IMV Info indicated that most labs have seen decreases. 55% of a panel of 110 labs indicated they had revenue decreases, from single digits to double-digits as a result of Medicare Part B cuts, and that over 60% will “review agreements with vendors for instruments and reagents.”

6. Clinical Sequencing Gains Crucial Popular Support:    More than any other diagnostic tool, the sequencer is set up for popular recognition and eventually demand.  Sequencing Scored some wins in 2018: An October 2018 study of participants a recent Clinical Sequencing Exploratory Research (CSER) Consortium program found that reporting incidental sequencing results generally did not cause undue distress or other adverse impacts on patients. It also found that reporting these results lead to only modest costs for medical follow-up, at least within the first year. Other good news comes from the BabySeq project, where a population of newborns were testing has revealed the possible utility of broad sequencing of populations. One anecdote that has gained traction is of the baby who was discovered to have a BRCA2 mutation, meaning they would be at high risk for developing breast or ovarian cancer as an adult. The knowledge of that mutation was not actionable for the baby at that moment, which raised the question of whether it should be reported? As a consequence, the mother got tested and discovered she, too, has the BRCA2 mutation. If the mother now has a better chance of avoiding or surviving cancer, it benefits the whole family.

One of the fastest growing areas of clinical sequencing has been in cancer diagnostics, which has only intensified since the CMS decision in March 2018 to offer national coverage for NGS testing in advanced cancer patients. Research presented by at the American Society of Human Genetics meeting in October 2018 suggested that clinical sequencing could also be helpful for pediatric cancer patients. Although the researchers didn’t examine survival outcomes, they reported that in a sample of 253 pediatric cancer patients who had whole genome or exome sequencing at St. Jude Children’s Research Hospital, 79 percent had at least one finding that could help guide care.   We expect more of a foundation for clinical sequencing demand coming from stories like these.

7. Direct to Consumer Testing – Floodgates Open, Flood Must Wait: Patients can now access diagnostic testing without their doctor. Quest Laboratories has launched QuestDirect, an enhanced consumer-initiated testing service that empowers patients to manage and take control of their healthcare by ordering health and wellness lab testing from the convenience of their home. Walgreens and LabCorp announced a large-scale expansion of their LabCorp at Walgreens collaboration. The two companies have agreed to open at least 600 LabCorp patient service centers at Walgreens stores across the U.S. over the next four years, inclusive of the 17 locations that have opened since they first announced their consumer-focused initiative in June 2017. LabCorp at Walgreens locations are currently open in Florida, Colorado, North Carolina and Deerfield, Illinois, serving as an important part of LabCorp’s network of nearly 2,000 patient service centers across the U.S. This is in addition to 23andMe.com‘s offering of DNA testing for select BRCA variants without a doctor’s order. “2019 is the first full year the gate is open for the customer to test themselves, will demand follow,” said Bruce Carlson, Publisher of Kalorama Information. “We think they will, but some prodding, advertising, apps, social media will be needed.”

8. AI Will Be Seen as a Team Player, Not a Job Replacer:  Talk of replacing doctors (or other workers) should, Kalorama Information thinks, by at least the end of 2019 be less of the discussion surrounding artificial intelligence. Instead, more attention will be on the positive supporting role that AI can play as the systems think about myriad datapoints that a human cannot always process. AI as a supporting tool, a team player. The demand is there: The Institute of Medicine at the National Academies of Science, Engineering and Medicine reports that “diagnostic errors contribute to approximately 10 percent of patient deaths,” and also account for 6 to 17 percent of hospital complications. The systems are proving out: Babylon Health claims its system performed 10% better than the average GP entrant examinee for induction into the Royal College of General Practitioners. And there’s apps: Prevencio Inc recently announced that its HART PAD test diagnoses peripheral artery disease in diabetes mellitus patients at high positive predictive value and negative sensitivity levels, in a Mass General Hospital study. These are just a few of the recent developments.