We wanted to highlight the recent article “Dx Companies See Rise in Demand for Integrated Clinical Chemistry, Immunoassay Systems for Central Labs”. The bottom line of the article is “In response to economic and operational pressures, testing is becoming more centralized” … and at the same time “at the other end of the spectrum, you see customers moving more toward testing at the point of care”.
What do we make of it?
Companies such as Roche, Siemens, Abbott and Ortho have invested heavily in providing highly automated solutions for the central lab. Their key customers are experiencing budgetary cuts and find it hard to find the staff they need, so higher throughput, automated systems that simplify their workflow are a great solution. It’s all about effectiveness and efficiency.
On the other hand, companies such as bioMerieux and Danaher are expanding in point-of-care (POC) testing, with the acquisitions of BioFire and Cepheid respectively. These POC investments, as well as POC divisions by other companies such as Abbott, are growing above the average of the Dx market. They are focusing on single instrument integration of diagnostic workflows to make the process robust for smaller labs, where the results need to be delivered in time to support clinical action.
So, the answer depends on what is more important for each particular test: efficiency (think “low cost”) or actionability (think “low turnaround times”); however, in both central labs and POC cases integrated automation is important.
Why do we find it interesting?
For the industry
Most big players in clinical diagnostics have business both in the Core Lab and POC. For these large players, POC tends to be smaller relative to their Core Lab business. According to Roland Diggelmann (Roche): “These two trends [growth in Core Lab and POC] are not mutually exclusive” (…) "If you do point-of-care testing in isolation, it's not going to help you when the patient moves to the next stage of testing, so the link between the two — centralized and point-of-care testing — is important, as is the comparability of the tests that you provide." Another big player (Illumina) is investing in products on both the very central lab (NovaSeq) and the very decentralized setting (iSeq).
The bigger picture
There is always a battle between centralization and decentralization in clinical diagnostics, but this is not limited to the Dx industry. The general trend is that industries start in a relatively fragmented state, then fragment more as new players enter the space, and then start to consolidate as companies are bought up or go out of business. Mature industries tend to be highly consolidated.
As clinical genomic testing demonstrates clinical utility and matures, technology will drive swings through centralization and decentralization periods. At a high level as clinical utility is demonstrated, clinical genomics should move from fragmented CLIA labs using re-purposed R&D life science tools to standardized integrated automated platforms that eliminate operational pressures at the core lab and provide ease of use for non-expert users at the POC. In this world reference labs take on either mature tests or test that require more interpretation and expertise. At the same time, technology is enabling cost effective testing of actionable panels closer to the patient for tests for which turnaround time is critical and interpretation needs are manageable.
Technological innovations in result interpretation, platform automation, and cross lab standardization can disrupt this process because they affect the need for economies of scale (if the innovations affect costs) and the perceived value of the product. BioCeryx’s platform provides integrated automated genomic clinical diagnostic workflows, but the value will depend based on the clinical setting.