Utility Players

  • by: |
  • 07/17/2013

For those of you following the recent CMS decision to deny coverage for contrast-enhanced PET scans ("Taking CMS to the Wood CED"), BioCentury’s Steve Usdin offers a timely and granular peek into the related world of laboratory-developed molecular diagnostics, detailing the cost, time and risk required to get these basic tools of personalized medicine onto the market -- and the decreasing the certainty that they will be covered. 

Some snippets:

The cost of demonstrating clinical utility, along with the lack of clear or consistent standards, is killing a business model that had made it possible for small companies to commercialize molecular diagnostics quickly and cheaply.

The fate of these laboratory-developed molecular diagnostics companies, and especially the conclusions investors draw about the viability of the space, could shape the future of personalized medicine.

Labs have been sparring with FDA for at least a decade over the agency’s attempts to regulate LDTs, and so far they’ve kept the regulators at bay. FDA Commissioner Margaret Hamburg opened the latest front at the American

Society of Clinical Oncology meeting in June, when she announced the agency plans to eliminate the regulatory distinction between LDTs and in vitro diagnostics marketed to multiple labs or physicians that have long been subject to premarket review.

The agency has developed a draft guidance that would “regulate all in vitro diagnostic tests in the same risk-based framework the agency currently uses, whether or not they are performed by a single laboratory.”

While FDA will find it difficult to use guidance documents or rules to impose clinical utility requirements on LDTs, payers have found a more prosaic tool for achieving the same goal: billing codes.

The full BioCentury article, “Coding for Utility,” can be found here.



Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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