NATURE BIOTECHNOLOGY VOLUME 24 NUMBER 8 AUGUST 2006 917

Three barriers to innovative diagnosticsPaul R Billings

Although technology adoption and remuneration are significant barriers to the development and implementation of innovative diagnostics, health imperialism may be just as important.

Of the ~$2 trillion spent on health-care each year in the United States,

about 3% is used to pay the costs of laboratory-based testing. Whereas the value and importance of laboratory results in assessing health risks, mak-ing diagnoses, selecting treatments and monitoring illnesses and therapies are undisputed—these data are key com-ponents of high-quality clinical care—actual spending on this part of managing health and illness has decreased over the past two decades in inflation-adjusted dollars1.

The results of diagnostic tests are cru-cial to answering key questions like who should be hospitalized? Does a patient have a significant illness? Or, what specific treatments are indicated? The answers to these queries can be costly as well as crucial to patients. Yet we are not investing more in the diagnostic part of the clinical experience. This fact stands in stark contrast to the increas-ing fraction of expended dollars being consumed by pharmaceuticals and in-patient care.

In planning for an era, touted by some, when we may have the opportu-nity to prevent or delay illness and aging, and to personalize medical care, healthcare sys-tems in the United States and elsewhere will have to address a plethora of obstacles. Three of these include: first, the difficulty of prov-ing new tests should be adopted; second, the problem of obtaining appropriate payment for an innovative diagnostic that is equitable to the

investment in research and development; and finally, convincing people that the benefits of diagnostic-driven health are not outweighed by privacy and discrimination fears.

New gold standardsInvestments in biotech, the Human Genome Project and other basic biological research have resulted in a wide variety of new types of assays and testing platforms that can be applied to studies of health and disease in humans. But whether these tests and methods provide real insights that are superior to those already avail-able, and deliver data of significant clinical util-

ity is not always clear or easy to prove. In fact, with increasingly stringent evi-dence-based medicine standards being applied to diagnostics, and the linkage of testing to therapeutic choice and moni-toring evolving, establishing real clinical utility can be difficult, time consuming and costly. Certainly, diagnostics inno-vators and developers should attempt to communicate more with providers, experts in public health and payers to learn what tests are needed by these key constituencies. This information exchange could result in a translation process that is more focused on ques-tions and markets that matter2.

A confounding additional issue in applying ‘right technologies’ is that current methods are often considered as the gold standard, the basis of dis-ease categorization nosology. The use of these more traditional approaches is therefore difficult to modify. Incentives in the healthcare system are often given to those who apply the gold standard. For instance, it is well known that considerable variabil-ity exists in reproducibility in expert driven diagnostic systems like clinical

imaging and pathology. Inter-observer vari-ation is easy to demonstrate and can affect care3. Yet the adoption of highly reproducible, objective and quantifiable laboratory assays to replace expert opinions is often difficult. Studies debunking accepted gold standards are hard to design and rarely published. Even when laboratory tests appear to have superior utility, experts often are reticent to change traditional approaches.

Getting paidAnother impediment to the development of innovative diagnostics is the system for test

Paul R. Billings, MD, PhD, Senior Vice President; Corporate Development, Laboratory Corporation of America Holdings, 128 East Maple Avenue, Burlington, NC, 27215.e-mail: billinp@labcorp.com

Accelerating the development of new diagnostics will not only require enhanced technology adoption and remuneration, but also public acceptance of the encroachment of technology into our lives.

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918 VOLUME 24 NUMBER 8 AUGUST 2006 NATURE BIOTECHNOLOGY

renumeration. In the United States, for exam-ple, the decision to pay for a new diagnostic by payers—large employers, Center for Medicare Services (CMS; Baltimore, MD, USA), private health insurers—can be prolonged and dif-ficult to fathom. The designation of a test for research or investigational purposes only, its delivery as a laboratory-developed assay or US Food and Drug Administration (FDA)-approved in vitro diagnostic, the status of its components as approved devices or analyte-specific reagents, the assignment of a cur-rent procedural terminology (CPT) code to a new assay or its description by currently available method codes, coverage decisions by CMS (where budgets and policies are sub-ject to the federal political process) and the technology assessment practices of insurers, are all important influences on ‘getting paid’ for developing and delivering diagnostics in clinical care.

I recently reviewed a complex DNA sequence-based diagnostic test that a small, high quality, clinical laboratory was providing. The cost of the test was approximately $3,000. The CPT codes associated with this assay could command over $4,000 per test in reimburse-ment. Yet extensive payment experience data indicated that laboratory providers of this test who sought payment from CMS or major private insurers might expect to recoup, on average, $1,500 or less. Translating a complex multiplex single nucleotide polymorphism assay or mRNA expression signature, like those now proliferating in the categorization of clinical conditions or treatment predictions,

will be slowed by the healthcare system’s cover-age and payment practices.

Health imperialismThe optimism of innovators and the eupho-ria of clinicians given new tools to improve patient care can obscure segmentation in the populations on whom new diagnostics might be applied. Symptomatic patients will likely be ready and rapid adopters of new diagnos-tics as long as the tests are not prohibitively expensive and can be interpreted for clini-cal utility. New diagnostics will also assist in identifying those individuals who do not have any serious condition, thus possibly reducing inappropriate use of healthcare resources.

But others may be targeted who will simply wish to assert their ‘right to be let alone’—that is, to not engage in health-related pre-diction or prevention. They may wish not to have their lives medicalized, possibly from the moment of conception, to a greater degree than occurs now. Their ability to preserve choices and autonomy will be challenged by a more powerfully persuasive and scientific medical practice, a newly invigorated ‘health imperialism’.

But avoiding testing in our society may not be irrational. Incidents of discrimination in insurance and employment settings have resulted from information derived from tra-ditional medical and new genetically based tests. Biotech company prospectuses warn of the impact of fears of genetic discrimination on the markets for their products. And poli-cies on informed consent in clinical research

and care settings increasingly warn of unfore-seen impacts on key life parameters if health information is not held highly private. Genetic discrimination, or the perception by citizens that it could occur, may be a significant barrier to the translation of innovation in diagnostics unless social attitudes change and truly protec-tive public policies are established4.

Although new diagnostics demonstrate the value of investment in basic and clini-cal research, and sustain the promise of better clinical care, their translation to clini-cally applied assays face significant barriers. Demonstrating real utility and dislodging gold standards, garnering appropriate pay-ment in our convoluted healthcare financing system, and not being forced on individuals who do not want tests in a larger movement of health imperialism are just some of the chal-lenges diagnostic discoveries face. Investment and creativity in navigating the translational waters will also be required.

1. The Lewin Group. The Value of Diagnostics: Innovation, Adoption and Diffusion into Health Care. The Lewing Group. Washington, DC. July, 2005. http://www.advamed.org/publicdocs/thevalueofdiagnostics.pdf.

2. Haga, B. & Burke, W. Using pharmacogenetics to improve drug safety and efficacy. JAMA 2004; 291, 2869–2871.

3. Stoler, M. & Schiffman, M., for the Atypical Squamous Cells of Undetermined Significance–Low-grade Squamous Intraepithelial Lesion Triage Study Group. Interobserver reproducibility of cervical cytologic and histologic interpretations: realistic estimates from the ASCUS-LSIL Triage Study. JAMA 2001; 285, 1500–1505.

4. Billings P. Genetic nondiscrimination. Nature Genetics 2005; 37, 559–560.

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