Cancer is among the world’s deadliest and most costly diseases; it is the number two killer after cardiovascular disease and for this reason improvements to existing treatments are aggressively sought. As a result, cancer applications provide test makers greater opportunities than they might find in other disease categories.
The in vitro diagnostic cancer market is growing at a rate 60% higher than the rest of the in vitro diagnostics industry and has sustained that growth over the decade that Kalorama Information has been watching the market. In 2009, the world market for cancer in vitro diagnostics was $4.3 billion; this market will grow to $7.0 billion by 2014.
Continuous innovation and corresponding high prices have driven this growth. A recent development fueling expansion within the sector is the marketing of test services at CLIA-registered, company-owned laboratories. These firms are performing tests and providing results as opposed to simply selling test kits.
As populations age and cancers proliferate, it is becoming too expensive to prescribe drugs that are largely ineffective. Researchers are mining genomic information to ascertain which patients are more responsive to specific treatments. The complex tests developed out of this research are often complex and for a multitude of reasons are best performed in a lab.
The past five years or so have seen the growing importance of commercial test services for cancer management. All of the major reference laboratories in North America and Europe offer a battery of in-house developed and commercial protein and molecular signature assays. There has also been a proliferation of company-sponsored lab services.
This is not a new business model, but it is primarily a phenomenon of the U.S. Many groundbreaking tests in the areas of viral load testing, anatomical pathology special tests, and molecular tests were initially launched by reference laboratories in the U.S. The first generation of these tests targeted small markets where the financial investment for FDA market clearance—especially the PMA route that would have been required for many of these unique tests—would be difficult to regain with a commercial test kit.
In the past few years, however, a new trend has emerged. IVD companies have established cGMP and CLIA-certified laboratories from which they offer their tests to physicians, hospitals, and reference laboratories. Nowhere is this trend more evident than in the commercialization of cancer diagnostics.
In the mid 1990s, Myriad Genetics was the first company to offer its patented assays as a service in its own laboratory. The fact that Myriad’s BRCA tests for inherited risk for breast cancer was not widely available in laboratories was seen as unethical and an impediment to widespread access to what was considered an important test. Further, Myriad pursued laboratories that infringed on its patent position by offering these tests and threatened litigation.
What a difference more than a decade has made. There is now barely a whimper of controversy surrounding the payment of $3,500 for a test that is available from a single source. Although Genomic Health’s Oncotype DX test for breast cancer recurrence risk is run only in the company’s CLIA-registered lab, it has been widely embraced by the medical community and payer groups. More importantly, Genomic Health’s success has created a precedent that is now becoming commonplace.
This turnaround in attitude is partly due to the new reality in gene-based diagnostics. The prevailing view is that companies should patent novel diagnostic systems/ assays to detect mutations or disease states of interest and not a sequence of DNA that can be found in people everywhere.