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This is why pre-design research is essential for the IVD industry

Which in vitro diagnostics are filling providers’ needs? Are they deficient in a performance characteristic that your IVD will improve upon or have you developed a new method that is more cost-efficient?

It’s an entrepreneurial fairy tale: two wunderkinds meet in college decide to launch a startup backed by millions in venture capital funding and become 20-something millionaires before they graduate. The details these kinds of fairy tales tend to leave out are the myriad failures and the startups that struggle to move from prototype to launch. But Flatiron Health is, to date, a success story.

Founded in 2012 by Zach Weinberg and Nat Turner, Flatiron is the third company the pair has started. Their first venture, a food delivery service for college students, failed. The second, a digital marketing company, was bought out by Google. When both saw family members struggle with cancer, they decided to leverage big data to improve cancer care.

The two spent years learning about the patient experience and the clinical workflow in cancer care, speaking with oncologists, nurses, researchers, and practice and hospital administrators, before ultimately focusing their attention on electronic health records systems. Using their research, Weinberg and Turner developed OncoTrials, a software tool that works with existing EHR systems to help doctors identify patients for clinical trials. Today, Flatiron works with more than 250 oncology clinics, multiple academic institutions, and many of the top pharmaceutical oncology firms. Google Ventures and Roche are among their investors, who have raised more than $300 million for the company since its 2012 launch.

What can the Flatiron experience teach the in vitro diagnostics (IVD) industry? It pays to do research before heading to the design table.

In the competitive IVD industry, launching your device ahead of competitors can give you significant market share. As patients and health consumers ourselves, our experiences and those of family and friends give us one viewpoint of what constitutes an unmet need or how valuable a test might be. But failing to fully consider if healthcare providers share the same opinion can be the downfall of an IVD. What current IVDs are filling providers’ needs? Are they deficient in a performance characteristic that your IVD will improve upon or have you developed a new method that is more cost-efficient? Will it easily integrate into the clinical workflow? Preliminary research should include a thorough understanding of the patient care cycle and the clinical workflow to identify not only the unmet need(s) but clearly identify where in that process to position your product.

Intense pre-design research is a hallmark of the Stanford University Biodesign Fellowship, which begins its year-long program with a month of identifying unmet needs in the clinical setting and follows with two more months of deeper investigation and prioritization. Through observation of clinical encounters and discussions with physicians, patients, and other relevant stakeholders, students in the program can better understand where existing products fail to meet user needs and subsequently integrate that knowledge in their own product’s design.

Furthermore, unless the IVD is only to be positioned to the direct-to-consumer market, reimbursement strategies must be a consideration. Following the major payer coverage policies, including CMS national or local coverage determinations, for the indication you’re targeting should be one of your first priorities. This means planning from the outset the kind of clinical studies that should be performed to satisfy any regulatory requirements or insurers.

Failure to qualify for reimbursement has been the downfall of several IVDs and even some companies. For example, Predictive Biosciences was a Massachusetts-based company that focused on noninvasive diagnostic tests for cancer management. In 2010, the company launched an assay for bladder cancer detection using urine samples. But when the investors learned Medicare wouldn’t cover the assay, they closed the company in 2013.  

But there have also been notable successes where research and early planning for the right clinical trial(s) ultimately led to successful reimbursement and market growth. Genomic Health performed several retrospective and prospective studies that identified post-testing changes in treatment decisions and reduced patient toxicity to chemotherapy, while refining the targeted patient population for its Oncotype DX Colon Cancer test. That strategy has paid off, as year over year, the company has increased revenues and test volume.

As Flatiron Health’s experience demonstrates, taking the time to thoroughly understand the patient (and provider) experience before design can support the overall success of a product. Early research should also include market planning and what data will be needed for any regulatory or reimbursement requirements, as Genomic Health’s OncotypeDX Colon Cancer assay demonstrates. Ultimately, the proposed product will be evaluated by insurers, investors, and other non-user stakeholders wanting to know why your product is better than currently available options and what its value is. Pre-design research can ensure your company is ready for them.

Photo: DrAfter123, Getty Images

Harry is the author of two related books: Commercializing Novel IVD’s; A Comprehensive Manual for Success and MoneyBall Medicine: Thriving in the New Data-Driven Healthcare Market.

 


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Harry Glorikian

Harry Glorikian is an influential global business expert with more than three decades of experience building successful ventures in North America, Europe, Asia and the rest of the world. Harry is well known for achievements in life sciences, healthcare, diagnostics, healthcare IT and the convergence of these areas. He is a sought-after speaker, frequently quoted in the media, and regularly asked to assess, influence, and be part of innovative concepts and trends.

He is currently a General Partner at New Ventures Funds (NV). Before joining NV Funds, he served as an Entrepreneur In Residence to GE Ventures – New Business Creation Group. He currently serves on the board of GeneNews Ltd. He also serves on the advisory board of Evidation Health (a digital health startup launched with support from GE Ventures), and several other companies. He is also a co-founder and an advisory board member of DrawBridge Health (a revolutionary diagnostics startup launched with support from GE Ventures).

Harry holds an MBA from Boston University and a bachelor's degree from San Francisco State University. Harry has addressed the NIH, Molecular Medicine Tri-Conference, World Theranostics Congress and other audiences, worldwide. He has authored numerous articles, appeared on CBS Evening News and been quoted regularly by Dow Jones, The Boston Globe, Los Angeles Times, London Independent, Medical Device Daily, Science Magazine, Genetic Engineering News and many others.

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