The 2013 AACC (American Association for Clinical Chemistry) Meeting was attended by 650 exhibitors and over 17,000 professionals all looking to connect in the In Vitro Diagnostics (IVD) industry. For a complete up-to-date news and analysis of the industry check IVDNews.

In this brief we will cover topics that were featured in the Plenary and Symposia sessions.

  1. Healthcare Forum – “The Future of Laboratory Reimbursement” -As part of a 3 hour health forum, an update was provided by Peter Kazon, Esq., JD of Alston and Baird. In summary, great changes are expected in CMS reimbursement of tests, as they look for savings,beginning with new prices for the clinical lab fee schedule (CLFS) that will be published in September 2013. Analysts are expecting headwinds in selected DX stocks affected by reimbursement cuts with hospital outpatient routine bundled tests and molecular genetic tests with stacking codes.Examples of genetic tests are those for Warfarin metabolism such as for CYP enzymes which have stacking codes. Infectious disease assays should not be hit for now. Diagnostic stocks in our portfolio should not be affected for now, but a review is needed in September and October with the new fee schedule and Q3 earnings.
  2. Healthcare Forum-“FDA Oversight of Lab Developed Tests (LDT)” -A thorough overview of the current regulatory environment was provided by Albert Gutierrez, Ph,D. of FDA/CDRH, Silver Spring MD. This has been a big issue over the past five years as labs aggressively market LDTs before FDA review in accordance with the current regulations which have evolved since 1992.The policies are loosely written with loopholes but the ultimate model is to develop an In Vitro Diagnostic (IVD) from an LDT,  but of course a long and thorough clinical and regulatory path is required. Key to FDA approval is the clinical validity and utility of the test keeping in mind the major objective of  protecting public health. An LDT public hearing was held in 2010 but politics and complexity thwarted  concrete guidelines. The compounding disaster that caused meningitis in a Compounding Lab in Massachusettes may provoke tighter regulations of LDTs.  A case in point is Roche Molecular who developed a companion diagnostic (biomarker) for an EGFR gene mutation to help target a cancer drug and received FDA approval. So why should reference labs be able to sell LDT’s which have not gone through the clinical and regulatory process?

In our next brief we will cover two emerging technology and product opportunities: next generation sequencing (NGS) and LC/MS-Liquid Chromatography/Mass Spectrometry.

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