Reimbursement is currently a tougher obstacle than regulation, said Siegel. Companies cannot be sure whether their products will be reimbursed. Reimbursement has become “a truly Sisyphean effort,” and getting coverage decisions whether regional or national can be difficult, said Siegel. When drugs get through Phase III development, the Centers for Medicare & Medicaid Services (CMS) generally approves their reimbursement, but currently no such process exists for molecular diagnostics.

FDA and CMS also need to define the reimbursement pathway for molecular diagnostics. “What we’re asking for is a predictable and efficient roadmap from FDA to CMS. This allows private payers to then have a baseline to benchmark against,” said Siegel.

People in other industries such as the semiconductor industry have worked hard to develop standards to enable their products to move forward; the same needs to happen with molecular diagnostics. New approaches with companion diagnostics have been helpful, but much more progress is needed. In particular, said Siegel, the National Institute of Standards and Technology should be developing biological standards.

Siegel also pointed to the value of biological samples.1 She urged that a national repository with guidelines be put in place to allow for the accessing of biological samples so that studies can be done in a more standardized way.

The Consequences of Inaction

Without greater clarity, funding for innovation will dry up, job growth will slow, the transition of the health care system toward prevention and lower costs will not take hold, and national competitiveness will be eroded. “People are going elsewhere in the world to launch products or set up companies. It’s happening today. It’s happening pretty aggressively.” Even if patient advocate groups organize funding for the development of diagnostics, who will coach the entrepreneurs and help them develop their business plans and build their companies, asked Siegel.

Siegel urged that venture capitalists continue to be included at meetings on molecular diagnostics. “The more you educate us about what the decision process will be, the better the investment decisions we can make. This will allow venture capital firms to continue to support health care entrepreneurs who bring innovative ideas and business models that can help transform our current health care system into one that offers improved quality of care and increased access at lower costs.”

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1 The Roundtable on Translating Genomic-Based Research for Health held a prior workshop on July 22, 2010, titled Establishing Precompetitive Collaborations to Stimulate Genomics-Driven Product Development, which examined the value, utility, and ethical challenges in using biospecimens in developing medical products, including diagnostics (IOM, 2011a).



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