Build molecular-testing-lab-toc
- 1. How to Build a Molecular Testing Laboratory: Key Strategic & Operational Considerations The complete guide to developing or expanding your lab
- 2. Includes step-by-step plans for basic and full-service MDx labs How to Build a Molecular Testing Laboratory: Key Strategic Operational Considerations & L. Eleanor J. Herriman, M.D., MBA, Director of Research and Analysis, G2 Intelligence G2 Intelligence estimates that the market for molecular diagnostics laboratory testing (MDx) will reach $7 billion in 2011—and that it is growing at 15% CAGR. The opportunity is significant—and How to Build a Molecular Testing Laboratory provides the intelligence you need to make smart decisions for building, optimizing or expanding your own MDx lab. This comprehensive research, authored by G2 Director of Research and Analysis, Eleanor Herriman, M.D., MBA, gives you valuable, practical insights and step-by-step instructions for your lab—including the five-stage process for developing an MDx strategy, and a real-world execution plan for building basic and full- service MDx labs. The field of molecular diagnostics testing is perhaps unlike any other in the history of laboratory testing. Molecular diagnostic testing (MDx), or assaying for nucleic acids, is at the center of a wave that is transforming medicine and the health care industry. This bold assertion is based on the following: • MDx testing is a key enabler of personalized medicine • MDx testing is redefining disease states, leading to “precision medicine” • MDx testing is reconfiguring laboratory medicine’s position in the health care industry • Some health care industry opinion leaders predict that MDx will usurp pharmaceuticals in terms of investment attractiveness • PLUS, MDx tests are now used throughout the continuum of care • AND, MDx has shown that it can advance clinical outcomes and produce health care savings Make sure your lab is ready to take the next step with Dr. Herriman’s actionable, practical insights on: • The five-stage process for developing your lab’s MDx strategy • A real-world execution plan for building basic and full-service MDx labs, covering: -- Testing menus -- Laboratory operations -- Instrument platforms -- Quality, proficiency testing -- Facility and supplies and accreditation -- Personnel -- Coding and billing -- Developing the pro forma -- Sales and marketing financials and business case Order your copy today! Visit www.G2Intelligence.com or call 800-401-5937 x 2
- 3. Figure 1 Example MDx Lab Requirements According to Primary Strategic Objective Strategic MDx Type of MDx Lab Client Network Personnel Technology Lab Objective Meet clinicians’ service Basic, automated Start with baseline—if Director and techs, Automated, easy to needs insufficient volume, need minimal expertise operate systems; FDA to expand kits Reduce send-out Start with basic, Start with baseline—if Director and techs, Automated, easy to expenses automated lab insufficient volume, need minimal expertise operate systems; FDA to expand kits Grow lab revenues, Intermediate—move to Need to grow client Bring in MDx expertise Can start with closed profits LDTs testing share and/or and sales, marketing and automated, move to number of clients open for LDTs Differentiate lab Stage—basic to full Need to grow client Bring in MDx expertise Multiple systems—some competitively service base; network with other and sales, marketing; automated, FDA kits, labs/start reference need IT expertise other open systems for business LDTs Establish Full service—LDT Develop relationships Experienced MDx PhD, Multiple systems—some institutional leadership capabilities with specialty services med techs; clinical automated, FDA kits, and clinical researchers; research and IT other open systems for establish agreements capabilities LDTs with pharmas, IVD cos. for trial services Source: G2 Intelligence Summary In Dr. Herriman’s new report, How to Build a Molecular Testing Laboratory, you’ll also find helpful information on the molecular diagnostics testing market, including: • The molecular diagnostics testing market, featuring key market trends driving the rapid growth and adoption of MDx testing • Molecular diagnostics tests and techniques • Industry trends and best practices • Evolving regulatory issues and obtaining reimbursement for new MDx tests • Appendices on FDA-cleared/approved molecular diagnostics tests, and G2’s compilation of molecular tests with evidence of health care savings Multi-User/Multi-Location Pricing? Contact Jonathan Wentworth-Ping at 973-718-4703, or email jping@G2Intelligence.com
- 4. How to Build a Molecular Testing Laboratory: About the Key Strategic & Operational Considerations Analyst is organized as follows: • The Molecular Diagnostics Testing Market—featuring an overview of key market characteristics, trends and challenges • Strategic Planning for the MDx Lab—the five-stage process for developing your lab’s MDx strategy • Molecular Diagnostic Tests—history, test menus and techniques • MDx Instrument Platforms—overview and selecting the right instrumentation for your lab • Building a Basic MDx Lab—a real-world execution plan for building your MDx lab • The Full Service MDx Lab—a comprehensive plan for taking your lab to the next L. Eleanor J. level—one that performs both Food and Drug Administration (FDA)-clearned, In Herriman, M.D., Vitro Diagnostic (IVD) tests, as well as laboratory developed tests (LDTs). MBA, Director • MDx Labs—Industry Trends and Best Practices—results of a G2 Intelligence 2011 of Research and survey of 90 laboratories regarding their experiences with MDx testing, as well as a Analysis compilation of best practice recommendations from MDx laboratorians. G2 Intelligence L. Eleanor J. Herriman, Order now to receive your copy for just $995 and your state’s sales tax by visiting M.D., MBA is a pathologist executive with 15+ years www.G2Intelligence.com. experience in the medical Or, to place your order by phone, please contact G2 Customer Service at technology industry. She has worked across sectors 800-401-5937 ext. 2 or via email customerservice@G2Intelligence.com. with both small ventures If you wish to receive a pdf file of this report which can distributed to others within and corporations. Her market experience spans your organization or posted to an intranet for firm-wide use, please contact our the clinical laboratory, in Licensing & Permissions director, Jonathan Wentworth-Ping at vitro diagnostics, e-health, jping@G2Intelligence.com or by phone at 973-718-4703. biotech, and strategy consulting for Bain & Company. She is the author About G2 Intelligence of two G2 Intelligence reports: Health Care Market Advancing the Business of Diagnostic Medicine Reforms: Implications and Prescriptions for G2 Intelligence provides timely, accurate and trusted analysis of industry Laboratories; and How and market trends, legal and regulatory developments, and technology to Build a Molecular and innovation that directly affect the operations, financial performance, Testing Laboratory: Key Strategic and Operational and competitive position of diagnostic testing laboratories and related Considerations. Other key medical services providers. accomplishments include growing a venture with a Formerly known as “Washington G-2 Reports”, the company has covered and reported CLIA lab and FDA PMA on the diagnostic industry for over 30 years. G2 Intelligence delivers topical and approved computer-assisted analytical periodicals, proprietary research studies, and custom advisory services, and cytology instrument from through live and virtual events, facilitates industry meetings and information exchanges. start-up to publicly traded company Our mission is to deliver relevant, meaningful and actionable findings on diagnostic (IPO raised $100M). industry markets, related regulatory change and lab operations. The organization strives She earned an MD at Baylor to exceed client expectations and develop mutually beneficial relationships with industry College of Medicine, did her leaders and influencers. pathology training at UCSF, and received an MBA from G2 Intelligence is a division of Kennedy Information, LLC, a leading provider of Harvard Business School professional market analysis. with highest honors Information on other G2 Intelligence products and services can be found at (Baker Scholar). www.G2Intelligence.com.
- 5. Table Of Contents Table of Contents CHAPTER 1: The Molecular Diagnostics Testing Market ..........................................7 Overview....................................................................................................................... 7 Market Characteristics.................................................................................................. 8 . Market Trends—Drivers.................................................................................................10 Market Trends—Challenges..........................................................................................11 CHAPTER 2: Strategic Planning for the MDx Lab................................................... 13 CHAPTER 3: Molecular Diagnostic Tests . ............................................................... 19 Gel Electrophoresis Methods.......................................................................................19 Regulatory Categories of Tests ....................................................................................24 MDx Tests by Indication Class......................................................................................26 Coding of MDx Tests....................................................................................................38 Test Reimbursement....................................................................................................41 Test Regulation...........................................................................................................42 CHAPTER 4: MDx Instrument Platforms. ................................................................. 45 CHAPTER 5: Building a Basic MDx Lab.................................................................... 51 Planning the Testing Menu...........................................................................................51 Planning the Instrument Platforms..............................................................................53 . Planning the Facility and Supplies...............................................................................58 Personnel Planning.....................................................................................................59 Personnel Training.......................................................................................................62 Developing the Pro Forma Financials and Business Case ...........................................63 Planning Laboratory Operations..................................................................................70 Quality, Proficiency Testing, and Accreditation..............................................................74 Coding and Billing......................................................................................................77 . Sales and Marketing...................................................................................................79 Case Study: An Alternative Model for Starting a Basic MDx Lab...................................80 CHAPTER 6: The Full Service MDx Lab..................................................................... 85 Planning the Testing Menu...........................................................................................85 Planning the Instrument Platforms..............................................................................86 . Planning the Facility and Supplies; Personnel Planning...............................................88 . Developing the Pro Forma Financials and Business Case............................................88 Planning Laboratory Operations .................................................................................92 LDT Validation—Establishing Performance Specifications.............................................92 . LDT Reimbursement....................................................................................................95 Full Scale LDT Lab—Summary.....................................................................................99 CHAPTER 7: MDx Labs—Industry Trends and Best Practices.......................... 103 G2 Intelligence’s 2011 MDx Lab Survey....................................................................103 APPENDIX A: FDA-Cleared/ApprovedMolecular Diagnostics Tests..................... 117 APPENDIX B: G2 Intelligence Compilation of Molecular Tests With Evidence of Health Care Savings.....................................................................................133 About the Analyst.....................................................................................................139 About G2 Intelligence ............................................................................................141
- 6. Table of Figures Laboratory Objectives for Launching MDx .................................................................... 13 Example MDx Lab Requirements According to Primary Strategic Objective........................ 15 Various Methods With Different Resolutions Detect Different Sizes of Genomic Changes................................................................................................ 22 Current Molecular Diagnostic Codes............................................................................ 39 MDx Instrument Platforms.......................................................................................... 47 Classification of 31 MDx Instrument Platforms by Function and Menu.............................. 49 Instrument Specialization of IVD Assays....................................................................... 49 Selected, Fully Automated Instrument Platforms for MDx Labs With Women’s Health IVD Menus................................................................................................................ 54 Selected, Fully Automated Instrument Platforms for MDx Labs With Viral IVD Menus. ......... 55 Selected, Fully Automated Instrument Platforms for MDx Labs With Genetic, Pharmacogenetic, and Hematology IVD Menus......................................................... 55 Financing Options for Acquiring MDx Instrument Platforms............................................. 57 Instrument Financing Decision Tree. ........................................................................... 57 Hypothetical Financial Calculation for Quantitative Viral Load Test. .................................. 65 Laboratory Respondent Profiles for G2 Intelligence 2011 MDx Survey ............................. 66 MDx Lab Survey First Year Budget Responses. .............................................................. 67 Volume of Mdx Testing Performed in Year One. .............................................................. 67 Cost Avoidance Savings from KRAS Testing in Colorectal Cancer...................................... 70 Standard Molecular Nomenclature Overview................................................................. 73 Profiles of Selected MDx Instruments Suitable for Full Service Labs................................. 87 MDx Instrument Platforms Categorized by Example Features........................................... 88 Project Plan for New LDT............................................................................................ 90 Hypothetical Distribution of Costs per Test for LDT ........................................................ 92 Lab Participants’ Profiles.......................................................................................... 103 Total Respondents, by Annual Test Volume (2010)....................................................... 104 Performing MDx Testing, by Test Volume...................................................................... 104 Performing MDx Testing, by Lab Type.......................................................................... 104 Reasons Not Performing MDx Testing, by Test Volume................................................... 105 Timeframe for Bringing MDx Testing In House, by Lab Type............................................ 105 Reasons for Bringing MDx Testing In House, by When Lab Started In House MDx. ............ 106 Reasons for Choosing MDx Test for In House, by Test Volume......................................... 106 First MDx Test for In House, by Test Type. .................................................................... 107 First Year MDx In House Budget, by Test Volume........................................................... 107 First Year MDx In House Budget, Average and Median. ................................................. 108 Types of Preparation in Building MDx In House Lab, by Test Volume................................ 108 Types of Preparation in Building MDx In House Lab, by Time Since Started In House Testing................................................................................................. 108 Requirements for External Operational Expertise. ........................................................ 109 Reference Labs’ Views on Clients’ Missing MDx Capabilities.......................................... 109 MDx Testing Volumes, in First Year.............................................................................. 110 MDx Test Volume Growth Rates, Last Two Years, by Timeframe........................................ 110 MDx Test Volume Growth Rates, Last Two Years, by Test Volume. ..................................... 111 Profitability of MDx Outreach Services, by Test Volume. ................................................ 111 Profitability of MDx Outreach Services, by Lab Type...................................................... 111 MDx Menu Expansion Planned Going Forward, by Test Volume....................................... 112 MDx Menu Expansion Planned Going Forward, by Lab Type........................................... 112
- 7. MDx Test Utilization Programs Managed, by Lab Type.................................................... 112 MDx Test Utilization Programs Managed, by Test Volume. .............................................. 113 MDx Laboratorian Suggested “Best Practices”............................................................. 113 Abbreviations..........................................................................................................117 Infectious Disease Tests—Bacterial, Eukaryotic and Fungal.............................................117 Molecular Diagnostic Tests—Human........................................................................... 125 Molecular Diagnostic Controls, Reagents & Proficiency Panels...................................... 129 Molecular Diagnostic Systems.................................................................................. 131 G2 Intelligence Compilation of Molecular Tests With Evidence of Health Care Savings. .......................................................................................... 134
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