Limited third party reimbursement hinders the growth of the molecular diagnostics markets, says new report
Lack of adequate third party reimbursement hinders the growth of the molecular diagnostics markets, since the research and development costs are passed on to the customer in terms of high product prices, limiting sales.
New analysis from Frost and Sullivan, US Molecular Diagnostics Markets, reveals that revenues in this industry totalled $888.9 million in 2002 and are projected to reach $2,350 million by 2009.
"There is a significant time gap from the time a test is granted the Food and Drug Administration (FDA) approval until the implementation of acceptable reimbursement schedules," states Frost and Sullivan research analyst Isaac Meek.
Acquiring reimbursement becomes tougher if the test is intended to replace or supplement a less expensive immunoassay or established microbiological technique.
Healthcare management organisations and insurance providers will not be inclined to increase reimbursement rates for newer assays, until their economic advantage over traditional tests are validated.
Since the superiority and efficacy of novel diagnostic tests must be established, manufacturers are compelled to offer their products close to, or under cost in order to increase acceptance.
The price hurdle is also aggravated by the prevalence of home-brew testing in commercial laboratories that threatens the demand for cancer assays, since the former is the cheaper option.
Home-brew testing is for research use only, but analyte-specific reagents (ASRs) are still manufactured under FDA oversight and can be used for cancer testing although their clinical utility cannot be advertised.
"The potentially unaffordable prices associated with genetic testing could lead to limited use and stall acceptance, since they are three to ten times more expensive than other clinical tests," notes Meek. The currently available diagnostic Brac test costs $1200, while the HIV test that uses mutation screening is quoted at approximately $300.
These tests are used more than once only if there is a family history of a specific disease, the individual shows symptoms of a genetic disorder, or if there is concern about passing on a genetic problem to progeny.
