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The Murky Regulatory Arena of Genetic Testing

Executive Summary

The FDA has undertaken several measures to make the regulatory process less burdensome for diagnostics companies, but these may not be enough to incentivize companies to take their new genetic tests through the approval process. At the same time, confusion reigns: a special HHS advisory committee on genetic testing has been disbanded, and the FDA is reviewing its jurisdiction to regulate home brews, which are the dominant route to commercialization for genetic tests. Some critics worry that these developments may stifle innovation and companies are waiting for clarity.

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In Diagnostics, Is FDA Approval Superfluous?

The proliferation of non-FDA approved clinical diagnostic tests isn't new. But the extent to which bypassing the FDA has become the norm is striking, particularly for new molecular tests. The non-approved tests appear to have good quality and comparable levels of reimbursement to FDA-approved tests, and are cheaper for laboratories. No one in government or elsewhere is forcing laboratories to use the approved tests once they're available. So, many in the diagnostics industry, especially those involved in emerging technologies, are questioning the value of going through the FDA.

Credible Competition for Roche In Molecular Diagnostics

Two of the biggest in vitro diagnostics companies are positioning themselves to go head-to-head with the market leader. Abbott Laboratories' diagnostic division is teaming up with Celera Diagnostics to identify, develop and market genomics tests. Meanwhile, Bayer's diagnostics division is buying a small DNA sequencing company, Visible Genetics, in an effort to expand its product and technology portfolio in the molecular field.

Genetic Testing's Regulatory Quagmire

Various government agencies are proposing greater government oversight of genetic testing, with the most controversial recommendation asking the FDA to regulate "home brews," the tests that clinical labs develop in-house for clinical purposes. As implementation plans are hashed out slowly, IVD kit makers and clinical labs see both opportunities and hurdles. Hospital labs are concerned about being overburdened by the new rules, while iVD makers worry that reform would give labs an unfair advantage.

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