There is a scene in Jurassic Park where one of the characters has his sights firmly fixed on a raptor, ready to take the shot, when suddenly he's jumped from behind by the one he didn't see. Ouch. There is a parallel here with the recent dust-up about the FDA's public meetings on LDTs next month. In a nutshell, the concern is that regulators will stifle innovation and ruin another promising new industry. Which got me to thinking - is FDA the real problem here?
It seems that for small companies trying to bring a new test to market, the challenge isn't regulators, but a fundamental lack of understanding of market dynamics. Because if they and their investors really, really understood what it took to get a product successfully adopted into the daily practice of medicine, they would most likely sail through the FDA. Before you roll your eyes, hear me out.
Recently I was sitting in the office of my son's pediatrician. This place makes a beehive look slow. There are crying patients, anxious parents, nurses, ringing phones, and one very harried doctor. Into this fray walks a sales rep from a drug company. She has maybe 5 minutes between patients to get in, make her pitch, and hopefully engage the doctor enough to try a new drug. Good luck!
Her success depends on how compelling the drug's story is. If she can present the doctor with data that shows that the drug is more effective or better tolerated than what he's using now, there's a good chance that he'll give it a try. In other words, if there is clear clinical utility, the doctor will make a switch.
This simple fact has driven drug development and sales for decades, yet for some reason it has eluded IVD manufacturers, especially those that continue to see their path to market through LDTs. Many would-be LDT providers believe that what is really needed are cutting edge tools that will help doctors make more informed decisions, and that regulators will only slow the process of getting those tools to market. But is that really the case? Are medical devices like iPhones, or are there more complicated market models in play? As a result of years of training and experience, physicians (and other health care providers) tend to be a lot more skeptical of new medical devices and IVDs than, say the average consumer waiting in line for the new iPhone.
When pressed, most proponents of LDTs point to Genomic Health (GHI) as the poster child for why the path is both viable and critical to patient care, and therefore can't be "spoiled" by risk-adverse regulators. But if you take a closer look at the information on GHI's website, you'll find that there's more myth than reality in this statement. One myth is that LDTs are a faster way to market, because they don't have to follow the same cumbersome design control process as a PMA test. But the time it took GHI to get a their breast cancer test from proof of concept to first result was 31 months, while average PMA takes 30-36 months. Hmmm. Okay, but it is much less costly than a traditional IVD pathway, right? Well, from 2003 through 2009, GHI has lost $150 million. Much of their expense has been cost of product revenues - essentially convincing providers and payers that the test has clinical utility through post-market studies.
Truth is, GHI probably did about the same amount of work as if they went through FDA. They realized early on that the only way the were going to achieve their goals of getting into the NCCN guidelines or payer reimbursement was through big, PMA-style clinical trials. If you look at their sales, you'll notice that they didn't really gain traction until some of these pivotal trials were complete. Had they chosen the PMA path instead, they might have demonstrated clinical utility and received FDA approval, which would have probably made their work with payers and providers that much easier.
So, is it really the FDA that is stifling innovation, or is it a health care system that requires the clinical validation of a test before it is broadly adopted? While it is tempting to blame regulators for holding back the molecular diagnostics industry, be careful that you aren't missing the raptor behind the bush.