Point Of Care Diagnostics In 2022: New Technology But Old Problems
Executive Summary
Following a busy year for point of care diagnostics, the industry is facing a period of consolidation. The drive for new technologies is being countered by regulatory and financial issues.
A turbulent year for point of care (PoC) diagnostics, 2021 transformed the industry in the minds of many.
At the heart of this change is a trend towards empowerment. What was once associated primarily with the doctor’s office or emergency wards has now permeated into the home, with vast numbers of people taking rapid at-home COVID-19 lateral flow tests every day.
This permeation has had deep, and what will likely be long-lasting, effects on both the PoC diagnostics market, and society.
Never before have patients been able to test for transmissible disease so easily, and never have patients been so strongly pressured by the social contract to adhere to new rules – all thanks to little plastic testing kits that have been doled out by the millions.
These COVID-19 tests have been a cash-cow for the point of care diagnostics industry this year, and the resulting revenues have brought renewed attention to the sector from patients, regulators, innovators and investors.
The result has been a merry-go-round of investment, promises, further investment and further promises. Claims have been repeatedly made stating that decades of development have occurred in a matter of months, and until recently evidence of this was sparse.
However, as the industry faces pressure to reapply COVID-19-resultant infrastructure and the financial gains made in the past year to new disease areas, an increasing number innovative companies are revealing new products and technologies to the world. All this builds up the idea that 2022 could be the most exciting yet for point of care diagnostics, as the transformation brought about by COVID is continued.
Out Of Sector Influence
A prime example of a company offering disruptive point of care technology is MeMed. The Israel-based company, which previously received funding from the US Department of Defense, has developed the first US FDA approved test that can differentiate viral and bacterial infections in patients. (Also see "Exec Chat: MeMed Improves Diagnostics To Combat Antimicrobial resistance" - Medtech Insight, 19 Oct, 2021.)
The test, called MeMed BV, runs in minutes, and, according to the company’s chief technology officer Kfir Omed, serves as an “accurate and actionable diagnostic” for physicians to begin to tackle the problem of antimicrobial resistance. Something the World Health Organization has described as “one of the biggest threats to global health.”
“One of the biggest challenges facing physicians when not prescribing antibiotics is actually the demands of a patient,” explained Omed. “The patient wants their doctor to do something – just telling them [their illness] is viral is not convincing enough. MeMed BV can show patients in an objective manner that it’s viral. This really empowers physicians to convince patients not to consume antibiotics.”
“The patient wants their doctor to do something – just telling them [their illness] is viral is not convincing enough." – Kfir Omed
What makes MeMed’s technology so disruptive is not just its diagnostic capability, but its potential to influence sectors outside of diagnostics in a way that has not been done so before. (Also see "MeMed’s Mission: Pressing Its Fingerprint Against AMR" - In Vivo, 22 Sep, 2021.)
Diagnostics are usually used by a clinician to work out what care path is needed for a patient. This could be surgery or medication, but for the most part, diagnostics indicate further treatment. MeMed’s BV test is the opposite to this. Its goal is to reduce prescriptions of antibiotics. Given that the US Centers for Disease Control and Prevention claim that 30% of antibiotic prescriptions are unnecessary, should MeMed BV reach the doctor’s office, pharmaceutical companies might see antibiotic revenues dip due to declining sales.
Equally, it is fair to assume that in those 30% of cases where antibiotics are mis-prescribed, some will be viral. By increasing the ability to monitor the spread of viral infections, and actually count the number of patients who suffer them – something that has not been done routinely in the past– demand for effective anti-viral treatments for common colds and flu might be actualized. It is possible that MeMed BV will not just disrupt the antibiotics market, but shift pharma’s focus towards otherwise treatable viral infections.
Lab Grade Tech In The Doctor’s Office
As health care providers, payers, patients and regulators all push for a more “casual” form of health care, where more can be done near to or at the patient’s home, the demand for testing technologies that have not previously been available has soared.
An extreme example of this is genomic testing. The Human Genome Project which commenced in 1990 took 13 years to complete and cost $2.7bn. Although it did not sequence just one single human genome, the project is viewed as a solid benchmark of the historical price of such technology.
17 years later, James Watson, one of the pioneers of DNA studies, was the first person to have their genome sequenced for less than $1m. Since then, the cost of sequencing a genome has been exhibiting a Moore’s Law-like trend where the cost has been plummeting. It is now possible to sequence a human genome for less than $500, making it almost affordable for mass use.
Mass genome sequencing would have significant positive impacts on people’s day-to-day lives, argues David Atkins, CEO of Congenica Ltd. – a UK-based company developing rapid genome analysis tools.
Congenica works primarily with the UK’s National Health Service to screen patients for rare diseases, but the company is looking to develop analysis tools for simpler diseases going forward.
The definition of “rare,” however, is surprising.
“1 in 17 of all newborns has a rare disease, and there are currently 8,000 rare diseases, a number which is growing all the time. The estimate for the number of undiagnosed rare disease patients is massive,” said Atkins.
And for each of these 1 in 17, there are mothers, fathers, siblings, teachers, and a whole plethora of other people impacted. The time taken to diagnose a rare disease in the UK – often known as the “diagnostic odyssey” – is far too long, with some of Congenica’s case study patients waiting almost a decade for diagnosis. Atkins described this issue as a “costly error that is messing up the health care system.”
With the price of genome sequencing and then subsequent analysis due to “drop precipitously with new technological entrants,” Atkins believes that there is potential for genomic screening to reach the doctor’s office in the conceivable future.
“I can certainly see genomics being used at the point of care level, where a patient sees their physician,” said Atkins. “We’ll get to the point where you only need your genome sequenced once [which still takes several days] and then you can create a portable summary of your genome or attach it to your medical records.”
This, Atkins said, would not only be useful for diagnosing rare diseases in children, but be useful for general practitioners seeing adult patients. Because genomic differences affect drug sensitivities, analysis of a patient’s genome could allow for personalized medicine to be delivered on a patient-by-patient basis, where the optimal dose of the optimal drug is given correctly nearly every single time.
An extreme example Atkins highlighted was a patient Congenica saw through the NHS. “There was a young lady in her twenties, and she had almost complete coverage of psoriasis. One of our clinical team identified that she had a mutation in a gene that encodes an enzyme that just makes an amino acid.”
He continued: “Her condition was totally diet-related, and with a food supplement, her psoriasis went down to about 5% – making it very manageable. It transformed her life, and she could re-enter the workforce. Not all cases are as simple as that, but genome analysis can allow for doctors to identify the underlying cause of a problem, rather than just manage the symptoms.”
Industry Impactors
Whilst innovative technology is serving to drive the PoC diagnostics market, other factors, both regulatory and corporate, are looming on the horizon, threatening to limit its growth.
A prime example is the new In Vitro Diagnostics Regulation (IVDr) in Europe, which has been blighted by a seemingly never-ending series of issues.
Stalling, lack of agreement regarding notified bodies, general administrative incompetence and foot stomping by the poorer nations in Europe has meant that by the time the 26 May 2022 deadline rolls by, at best only 61% of IVDs currently sold in Europe will be certified. (Also see "EU Is Heading For Partial IVD Market Collapse, Recent Analysis And Figures Suggest" - Medtech Insight, 6 Oct, 2021.)
A worst-case scenario could, in fact, cripple the industry with a MedTech Europe survey finding that potentially only 24% of IVDs will be certified in time.
In response to this, the European Commission has backtracked slightly, and whilst IVDr will still fully apply on 26 May 2022, a tiered system with prolonged transition periods has been created to allow many products more time to be certified before being withdrawn from the market.
Fundamentally though, if the European Commission does not prioritize certification of IVDs, innovators in the industry will likely move elsewhere. Europe faces a slowdown in development of a range of point of care IVDs covering coagulation, glucose monitoring, cardiac testing, pregnancy and infectious disease.
Money, Money, Money
Much like every other industry worldwide, supply chain, personnel and structural issues are affecting the PoC diagnostics market.
A recent survey of diagnostics companies – both imaging and in vitro – ran by Simon Kucher, found that 80% of internal barriers facing diagnostics companies are related to organizational structure, resources and simple lack of staffing.
“A pharma company will have pricing managers at all levels. However, in diagnostics, even larger companies do not have pricing managers – there just aren’t the resources.” – Gerald Schnell
Gerald Schnell, senior partner in Simon Kucher’s life sciences division, highlighted pricing as the core underlying issue impacting diagnostics. He noted that poor pricing strategies prevent companies having the money to combat the issues they face.
“If you look towards pharma, you’ll see that pricing is one of their most important commercial pillars,” Schnell said. “A pharma company will have pricing managers at all levels. However, in diagnostics, even larger companies do not have pricing managers – there just aren’t the resources.”
Michael Keller, partner elect in Simon Kucher’s global medical technology practice elaborated further. “The IVD industry is complaining – internally for the most part – about eroding prices. 70% of health care decisions are based on diagnostics, but diagnostics only receive about 2% of the budget. Diagnostics [companies] feel like they don’t get what they deserve,” he said.
“In the eyes of the payer though, it’s still the pill, the pharmacological treatment that makes the impact,” he said. Adding that the pharma industry mastered value-based pricing and detached from the base product. The diagnostics industry is struggling to follow suit. Payers in this space are not used to evaluating the “value” of an innovative biomarker and what it can bring to the health care system. They often fall back and – worst case – relate diagnostics to the “the cost of putting a couple of liquids together.”
Schnell agreed. “I think the [diagnostics] industry totally underestimates its pricing power. They are in a comfortable position where they can always differentiate their offer with various reagents, equipment, technical services and digital solutions.”
“It is this that will be top on the radar for companies in the next year,” Schnell said.