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Bridging the Gap between MDx Testing and Point-of-care by EOS Intelligence
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Bridging the Gap between MDx Testing and Point-of-care

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The COVID-19 pandemic brought innovation and investment to the in vitro diagnostics (IVD) market, opening new pathways to simplify and expand testing. The previously complicated and time-consuming molecular testing gradually started moving towards rapid testing, changing how we manage healthcare. The growing popularity of rapid testing gave way to self-sampling and at-home sampling, which is set to bring molecular testing closer to patients. Another noticeable transformation the industry witnessed post-pandemic was the rise of molecular testing at point-of-care (POC), which is set to disrupt the way clinicians deliver accurate diagnoses in record time.

The latest generation of IVD devices is focused on providing quick diagnosis and being cost-effective. This has led to IVD companies focusing on developing simpler and less invasive sample collection methods, such as self-sampling tests.

IVD innovation is also transforming molecular testing to make healthcare more accessible. To a certain extent, dependence on laboratories is gradually decreasing with molecular testing available at POC. A key development in this area is the use of multiplex assay, which allows to test for multiple pathogens simultaneously, allowing for early diagnosis.

Molecular testing moving near-patient

After using antigen tests during COVID-19, demand for molecular testing for a variety of diseases at POC has risen drastically. In 2023, the industry faced an acute shortage of skilled laboratory staff, further increasing the need for molecular testing to move near-patient. This has resulted in physicians and patients preferring molecular tests at POC (MPOC). Some prominent industry players, such as Cepheid, Abbott, and BioFire, offer CLIA-waived PCR instruments and multiplex assay tests for the POC setting. A CLIA-waived certification allows tests to be performed at a doctor’s office by a non-technician instead of other more complex MDx tests requiring specialized technicians.

Moving these multiplex molecular tests near-patient is revamping the IVD landscape, positively impacting both the patients and payers. Early diagnosis with POC diagnostics empowers physicians with evidence-based decision-making at an early stage. Moreover, with multiplex assays increasingly being used for MPOC and delivering results within 10-25 minutes (in the case of respiratory assays), the wait time for patients to receive the correct diagnosis has reduced substantially. This results in clinicians being able to start with proper treatment on the patient’s first visit, thus reducing the total number of patient visits. Consequently, physicians are also able to accommodate a higher number of patients.

In fact, MPOC could become a critical element of the value-based care model in the USA. The value-based program incentivizes healthcare providers/physicians to provide quality healthcare. With MPOC offering quicker turnaround time and lower testing costs, physicians/payers will likely be better incentivized and motivated to deliver high-quality services.

Growing demand for self-sampling/at-home sampling

The pandemic raised public awareness regarding the use of self-sampling kits and increased demand for them. Further, the FDA granted Emergency Use Authorization to multiple assays during the pandemic to quickly onboard self-test kits and penetrate the US households with this novel testing method.

Driven by the convenience, cost-effectiveness, and accessibility offered by self-sampling kits, they are becoming increasingly popular, particularly amongst the aging population that needs tools and technologies to manage health at home. It is also proving to be a sustainable testing method, as it can be used for preventative screening as well as allows for discretion for patients who may not prefer to get tested in a laboratory or by a physician, particularly in case of sexually transmitted infections (STIs).

Additionally, unlike OTC tests, molecular diagnostic tests allow for better accuracy in results and are recognized by the FDA for clinical diagnosis use. This has given confidence to healthcare providers to advocate self-sampling, as they stand to benefit from bringing care to patients’ homes, eventually reducing healthcare expenses. In a value-based setting, at-home testing proves to particularly benefit physicians who are able to eliminate unnecessary patient visits.

For the prominent industry players, at-home testing represents a key opportunity area to grow in the niche direct-to-consumer testing segment. Companies are also using these tests as an opportunity to target the rural population who do not have easy access to laboratories. Besides infectious and respiratory diseases, companies are now trying to foray into other treatment areas, such as human papillomavirus (HPV). Self-sample collection for HPV has begun in Europe with BD’s Onclarity HPV assay.

EOS Perspective

Establishing a strong foothold in both self-sampling and MPOC segments is seen as a sizeable business opportunity for stakeholders of the IVD market. In the near term, it is likely for the IVD players to continue launching new assays and technologies to expand offerings.

For self-sampling, MDx players have been focusing on infectious diseases, and there still is a vast untapped market for self-sampling at home, specifically when testing for STIs. In November 2023, LetsGetChecked became the first company to secure FDA approval for chlamydia and gonorrhea at-home sample collection. This has opened doors for other players to enter this niche market, and they are likely to jump on the bandwagon by seeking FDA approvals for their STIs self-sampling kits. Major players, such as Hologic, are already gathering data to launch a self-collection device for STIs. Hologic’s Aptima Swab for STIs multi-testing is approved in the EU, and the company is now conducting trials to get approval in the USA.

In the near term, a noticeable trend in the MPOC segment is expected to be the focus of MDx players on developing multiplex assays that follow the ‘one-size-fits-all’ approach. There is a growing demand from physicians for multiplex assays that allow them to test for multiple viruses and deliver results in under four hours. Companies have already started to take matters into their own hands by focusing their R&D efforts on developing panels and preparing them for FDA approval and CLIA waiver. Becton Dickinson announced the launch of its first molecular diagnostics POC instrument, BD Elience, by 2025. The device is expected to allow panel testing for respiratory and sexually transmitted diseases.

Although the self-sampling and MPOC segments present many opportunities for the IVD stakeholders, some roadblocks may hinder their development and adoption. For instance, multiplex assay reimbursement schemes may hamper their widespread adoption in the POC setting. Per the latest guidelines, reimbursement schemes for multiplex assays are less favorable than those for singleplex assays. Furthermore, at present, there are no reimbursement schemes in place to reimburse for self-sampling at home, so patients are required to pay out-of-pocket.

Several players face a crucial challenge for at-home collection: proving to the FDA that the self-sample collected is not contaminated or poorly taken. FDA requirements for approval of these tests are very stringent and demand that companies prove the adequacy of the sample collected by patients to match that of laboratory collection.

Despite these challenges, self-sampling and MPOC present untapped opportunities for many IVD players seeking to expand their capabilities and offerings to position themselves better in the MDx market.

Genetic Testing Fraud – The Next Big Concern for the US Healthcare Industry by EOS Intelligence
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Genetic Testing Fraud – The Next Big Concern for the US Healthcare?

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Over the past few years, lab fraud has become a concern in the USA with the increase in financial gains obtainable through fraudulent billing practices, unnecessary testing, bundling of expensive tests (such as tests for rare respiratory pathogens or genetic tests) with COVID-19 tests, and increase in the number of genetic testing labs. A recent update in the compliance and regulatory requirements and increased focus on analyzing fraud testing schemes are expected to help curb lab fraud in the country.

Genetic testing, due to its increased use in the healthcare industry, is a particularly lucrative fraud target. Despite the presence of various compliance programs and regulations, several laboratories, together with patient brokers, telemedicine companies, and call centers, commit fraud and defraud Medicare. This strains the healthcare system as it increases healthcare costs and influences the patients’ trust in testing, labs, and other stakeholders.

Clinical labs face less scrutiny than full-service health centers. Thus, they are more frequently involved in lab fraud activities. Some of the most commonly noticed lab fraud cases in the USA include kickback schemes, fraudulent billing, and unnecessary testing, among others. Labs team up with parties such as patient brokers to get patients, doctors to refer patients or prescribe unnecessary tests, telemedicine companies to order tests, and call centers to target Medicare beneficiaries and then defraud Medicare by submitting claims.

Lab fraud in genetic testing has emerged in the USA over the past few years due to sprouting genetic testing labs across the country and the increasing use of such tests in health practices to assist disease diagnosis and predict disease risk. Genetic testing enables healthcare providers to offer personalized medicine based on the individual’s genetic makeup and helps identify how the patient will respond to treatments. Genetic testing fraud, mainly targeting cancer screening, pharmacogenetics, and cardiovascular diseases, is on the rise.

One of many such fraud cases was noted in August 2023, when LabSolutions LLC, based in Georgia, USA, submitted over US$463 million worth of unnecessary genetic and other laboratory tests to Medicare, the national health insurance program, of which Medicare paid over US$187 million. These tests were obtained through kickbacks and bribes. The scale of similar fraud is evident from the fact that in July 2022, the Department of Justice announced criminal charges against 36 defendants in 13 federal districts for more than US$1.2 billion in fraudulent telemedicine, cardiovascular and genetic testing, and durable medical equipment purchases.

The COVID-19 outbreak in 2020 further spiked fraud cases, as it gave an opportunity to bundle COVID-19 testing with other forms of expensive testing that patients did not need, including genetic testing for various diseases and tests for rare respiratory pathogens. Financial incentives offered by the federal government to encourage participation in COVID-19 control-related businesses also attracted fraudsters in the laboratory business. According to the US Department of Health and Human Services report, in May 2023, around 378 labs billed Medicare Part B for add-on COVID-19 tests at high volume and payment amounts. Of these, around 276 labs billed for more add-on tests, such as billing Medicaid for COVID-19 tests alongside respiratory pathogen panels (RPPs), individual respiratory tests (IRTs), allergy tests, and genetic testing. An additional 161 of these 378 labs also reported higher costs than usual for add-on testing.

Lab fraud behind money loss, erosion of trust, and increased insurance premiums

Lab fraud causes a significant adverse effect on the integrity and quality of the healthcare system as unnecessary testing and fraudulent billing practices increase healthcare costs, compromise the accuracy and reliability of diagnostic tests, and erode trust in healthcare providers, including doctors and hospitals, among others. Healthcare providers who unknowingly refer patients to fraudulent labs are also likely to face a reputation hit.

Above all, healthcare fraud can cause tens of billions of dollars in yearly losses. According to the National Health Care Anti-Fraud Association, taxpayers are losing over US$100 billion annually to Medicare and Medicaid fraud, including billing for unapproved COVID-19 tests, genetic testing fraud, home healthcare billing, and fraud billing for medical equipment.

Companies manufacturing genetic testing kits may face reputational damage if their products are used in the genetic testing fraud scheme. This is expected to negatively impact their market presence as customers/patients will lose confidence and will likely move to reputed competitors. Also, healthcare providers may stop referring the company products to their patients.

Increasing fraud will likely drive the need for more stringent regulations for genetic companies manufacturing genetic testing kits (requiring compliance in conducting in-depth clinical studies, providing extensive data, maintaining necessary documentation, labeling and packaging requirements, etc.). This is expected to increase the operational costs for genetic testing companies and, thus, the price of genetic testing services. Ever-increasing genetic testing fraud is expected to potentially disrupt the market’s growth trajectory as patients become more cautious. Individuals are likely to receive tests that are not appropriate or required and may become skeptical about the necessity and accuracy of the test result.

Read our related Perspective:
Commentary: The Promise of Comprehensive Genomic Profiling in the USA

Lab fraud also increases insurance premiums as fraudulent activities increase the cost of claims, which in turn increases insurance companies’ expenses. The insurance companies are bound to raise premiums to cover additional costs. Additionally, individuals receiving genetic testing through fraud schemes will likely be denied future coverage. This is because many genetic tests for inherited diseases are offered as a one-time payment for a lifetime of coverage, and fraud schemes can compromise the individual’s access to this benefit.

Regulatory updates and strategies aimed at combating lab fraud

Preventing lab fraud is crucial to maintaining the integrity of scientific research and the functioning of healthcare systems. Lab fraud can be prevented, or at least significantly diminished, by establishing comprehensive compliance programs, stringent licensing and certification requirements for labs and healthcare providers, encouraging employees and stakeholders in labs and healthcare organizations to report any suspected fraud incidences, education, secured data handling, continuous monitoring, improved medical billing processes, and enforcing penalties and legal consequences.

In January 2023, the US government updated compliance and regulatory requirements for laboratories to prevent lab fraud. As per the updates, the laboratories must submit a medical necessity document supporting the ordered test, progress note, and the treating doctor’s signature to support a claim.

Also, providing incentives to physicians to encourage them to refer patients for lab services will be considered a violation of the federal Anti-Kickback Statute, and both laboratory and healthcare professionals will face legal consequences.

Laboratories that fail to adhere to lab billing guidelines published through National Coverage Determinations (NCDs) or Local Coverage Determinations (LCDs) will face civil liability and triple damages under the False Claims Act.

The government also continued its scrutiny of medically unnecessary genetic testing schemes, audited genetic labs, and tried to recoup funds where the medical necessity requirement was unmet. Also, the Office of Inspector General (OIG) issued a fraud alert warning the public about the proliferation of COVID-19 testing and genetic testing scams.

Moreover, in June 2023, the US Food and Drug Administration (FDA) took a crucial measure to regulate an extensive array of laboratory tests, including prenatal genetic screenings, to ensure test result accuracy and prevent unreliable outcomes. The US FDA ensures that the lab test delivers results as claimed by the lab test developer by analyzing the device’s accuracy, specificity, clinical characteristics, and analytical sensitivity. Regulating these laboratory tests will likely reduce the chances of fraud, as laboratories will not be allowed to run specific tests if they are not cleared or approved by the FDA.

EOS Perspective

Increased awareness about genetic testing and its easy accessibility have made it more vulnerable to lab fraud in the country. Genetic testing scams are evolving significantly wherein the scammers (a lab owner or a genetic testing company’s representative) are offering free screening, cheek swabs, or testing kits for genetic testing to get the individual’s Medicare information and submit claims. An increase in the number of genetic testing companies manufacturing direct-to-consumer genetic testing kits is expected to further contribute to genetic testing fraud as it will become easier for lab owners to get access to genetic testing kits and scam Medicare beneficiaries.

Also, the introduction of new tests creates potential opportunities for lab fraud as the lack of proper oversight and safeguards makes it easier for lab fraudsters to exploit gaps while appropriate regulatory norms for those tests are being developed. Thus, there is an increased need to set the regulatory norms for any new tests being developed before they are put to use.

While various compliance and regulatory measures are in place to prevent lab fraud, ethical practices, education, and training for lab employees will likely play a significant role in preventing lab fraud in the country. Many healthcare professionals are often involved between doctors prescribing the test and the persons administering the test. Thus, it becomes challenging to determine whether the referrals are conducted efficiently.

In addition, strong collaboration among healthcare insurers, healthcare providers, and the government can also help prevent this kind of fraud. The government plays a vital role here, as it has the tools to lay more emphasis on continuous monitoring and auditing of genetic testing labs to keep track of lab activities and prevent fraud cases.

New Directions in Alzheimer’s Diagnostics Will Blood Tests Replace CSF and PET by EOS Intelligence
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New Directions in Alzheimer’s Diagnostics: Will Blood Tests Replace CSF and PET?

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Around three-fourths of dementia cases continue to remain undiagnosed even though the incidence of Alzheimer’s disease (AD) is rapidly growing across the globe. AD affects about 60-80% of dementia patients worldwide. Early diagnosis of AD is critical in forging beneficial medical care strategies and enhancing patient outcomes. Current AD diagnostic tests, such as cerebrospinal fluid (CSF) and PET scans, are either invasive or associated with side effects and are generally expensive. This calls for developing less invasive, safer, faster, and more accurate AD diagnostics, such as blood tests.

Blood-based tests promise accurate and non-invasive AD diagnosis

Researchers are developing less invasive and less costly blood tests that are likely to be more accurate than contemporary tests. There are currently two types of AD diagnostics blood-based tests: the phosphorylated tau217 (ptau217) test and the amyloid beta (Aβ) 42/40 plasma ratio test.

The ptau217 biomarker has the potential to differentiate AD from other neurodegenerative diseases, as ptau217 levels can be high in AD patients before the onset of clinical symptoms. Studies have proved that ptau217 tests can detect AD early on and monitor disease progression.

The Aβ 42/40 plasma ratio tests detect amyloid beta protein plaques in the brain that cause cognitive impairment. Due to the lack of a certified reference standard for measuring plasma Aβ42 and Aβ40’s absolute values, ptau217 may be better than an amyloid beta ratio test. However, both tests are accurate enough to diagnose AD.

Notably, ptau217 blood tests are believed to give up to 95% accurate results when coupled with CSF tests as against 90% accuracy of CSF when used as a standalone method. At the same time, amyloid beta (Aβ) 42/40 ratio tests are known to give around 80% accuracy in detecting amyloid positivity.

Many laboratories and diagnostic companies have designed or are designing ptau217 assays. C2N Diagnostics, Quanterix, Quest Diagnostics, and Laboratory Corporation of America (LabCorp) offer ptau217 laboratory-developed tests (LDTs).

Low cost of blood-based AD tests can also be a growth-driving factor

A major push towards blood-based AD diagnostics comes from the tests’ lower cost in comparison to PET and CSF. The cost of blood tests typically ranges from US$200 to US$1,500, depending on the test provider.

The cost of PET ranges from US$1,200 to US$18,000, while the average price of CSF tests is around US$4,000 (in both cases, the actual cost depends on the type of facility, location, and the extent of insurance coverage).

As of 2023, Medicare and Medicaid covered PET scans for AD in the USA outside clinical trials. Therefore, AD patients need to pay around 20% of the PET cost, which translates to US$240-US$3,600, even after insurance coverage.

Considering the high share of dementia and AD cases remaining undiagnosed, there is a chance that the lower cost of blood-based tests can help contribute to higher accessibility to testing and ultimately improve the early detection rate.

Large AD diagnostic players partner with smaller ones to develop new tests

In an attempt to develop ptau217 assays, major diagnostics companies tend to recognize the development progress made by smaller players. ALZpath, a novel AD diagnostic solutions provider, is the pioneer of the ptau217 antibody, which helps in the early detection of the disease. Large players such as Roche and Beckman Coulter are enticed by the synergistic opportunities ALZpath offers.

In June 2024, Roche partnered with ALZpath, an early-stage biopharmaceutical company specializing in AD diagnostics, to launch the plasma ptau217 In-Vitro Diagnostic (IVD) test. As per the partnership, Roche will use ALZpath’s ptau217 antibody to design and commercialize an IVD test to detect AD with the help of Roche’s Elecsys platform.

In July 2024, Beckman Coulter also partnered with ALZpath to utilize ALZpath’s proprietary ptau217 antibody to detect AD on Beckman Coulter’s DxI 9000 Immunoassay Analyzer.

AD diagnostics firms receive funding from various sources, including drugmakers

Constantiam Biosciences, a bioinformatic analysis firm, received a US$485,000 Phase 1 SBIR grant (Small Business Innovation Research) from the National Institute on Aging to develop a tool for deciphering risk variants pertaining to AD and related dementias (AD/ADRD) in September 2024.

Biogen and Eli Lilly invested in the Diagnostics Accelerator, a funding initiative started in 2018, at the Alzheimer’s Drug Discovery Foundation (ADDF) in 2020. The Diagnostics Accelerator has invested over US$60 million across 58 projects, most of which are blood tests. In its Q4 2023 earnings call, Biogen emphasized its support for developing tau biomarker diagnostics and pathways. Its partner, Eisai, has invested around US$15 million in C2N Diagnostics and collaborated with IVD companies such as Sysmex, among others. In September 2024, ADDF invested US$7 million in C2N Diagnostics to further develop blood-based AD detection tests.

Other investors have also identified the opportunities AD diagnostic offers. A 2024 market research report by Market Research Future estimated that the AD diagnostic industry would nearly double, from US$4.5 billion in 2023 to US$8.8 billion in 2032.

FDA stands as an accelerating force for blood-based tests via breakthrough device designation

For a while now, the FDA has been granting breakthrough device designation (BDD) to devices that could address life-threatening diseases with unmet medical needs. BDD facilitates the expedited development, review, and assessment of medical devices, ensuring quicker access for patients and medical professionals. It would not be too ambitious to conclude that strong positive evidence from several uses and studies of ptau217 tests is likely to compel the FDA to approve them for use in the near future. The first sign of this is that the FDA is granting BDD status to multiple ptau217 blood tests.

In March 2024, the FDA granted BDD to Simoa ptau217 by Quanterix. This blood test can detect AD in patients with cognitive ailments even before signs and symptoms start to appear.

In April 2024, the FDA gave BDD to Roche’s Elecsys ptau217 plasma biomarker test to augment early diagnosis of AD. Roche partnered with Eli Lilly to develop this blood test that will widen and accelerate AD patients’ access to diagnosis and suitable medical attention and care.

In early 2019, the FDA gave BDD to C2N Diagnostics’ blood test to detect AD. The BDD status of AD blood tests will likely accelerate the development, review, and assessment processes of these tests, improving patient outcomes.

Some FDA-approved AD drugs have used blood tests in clinical trials. Eli Lilly’s Kisunla and Esai/Biogen’s Leqembi have successfully utilized C₂N Diagnostics’ Precivity-ptau217 blood biomarker in their clinical trials. The FDA approved both drugs to manage AD. This improves the chances of this blood test getting approved by the FDA.

Lumipulse G β-Amyloid 1-42 Plasma Ratio test by Fujirebio Diagnostics received BDD from the FDA in 2019. The company submitted an FDA filing for the Lumipulse G ptau217/β-Amyloid 1-42 Plasma Ratio IVD test in September 2024. If approved, this test will become the first commercially available blood-based IVD test in the USA to detect AD.

EOS Perspective

There has been considerable progress in developing blood-based assays for AD diagnosis by pharma and diagnostics companies. However, a good portion of the liability for their products not reaching market readiness faster lies (and will probably remain to lie) on the approving authorities that are unable to accelerate the administrative steps.

Some blood tests, such as PrecivityAD, are approved for safe use in the EU but are still not in the USA. While such approval is typically a time-consuming process and requires a thorough investigation, the blood tests will enter the market at a larger scale across several geographies only if the authorities fast-track their approvals. This is particularly applicable to blood tests previously successfully used in clinical trials for approved AD drugs and for tests that have already attained BDD status from the FDA.

As an example, PrecivityAD by C2N Diagnostics received BDD status in 2019 from the FDA. However, the FDA has still not approved the blood test for safe use in the USA. This is still despite the fact that PrecivityAD and other C2N Diagnostics’ assays have been utilized in over 150 AD and other research studies across the USA and abroad. FDA’s time-consuming and lengthy review procedures and bureaucratic reasons are some of the factors responsible for the delay in approval. In addition to this, C2N Diagnostics needs to submit some more evidential data pertaining to the accuracy of PrecivityAD, which is likely to take time to produce.

These procedural and administrative impediments, along with the time taken by the device makers to present the data to the FDA, will likely continue to put a brake on the blood-based tests becoming available to patients in the near future.

The situation will remain so, given the FDA’s recent decision to regulate new LDTs involving diagnostic tests that use body fluids such as blood, saliva, CSF, or tissue on similar lines as medical devices (meaning LDTs must comply with the same standards as medical devices). As per this regulation, LDTs need to prove the accuracy of their tests. This decision will have both winners and losers in the AD stakeholder ecosystem.

Researchers and physicians are looking at this regulation with a positive stride as this step will reduce the number of tests with unconfirmed accuracy from the market in the USA. This is undoubtedly a positive change for patients’ safety, reducing the number of misdiagnoses and accelerating correct diagnoses.

On the other hand, smaller start-ups and diagnostic companies are not likely to benefit from this decision as it will restrict the development of new innovative tests vis-à-vis large diagnostic companies. Overall, the decision will likely decelerate the approval of blood-based AD tests or at least will require much more paperwork and proof of accuracy from the device makers. This decision will take effect in multiple phases over four years, starting from July 2024.

On the research and development side of the Alzheimer’s disease diagnostics space, a certain level of symbiosis between drug producers and diagnostic solution providers will continue to impact the market positively. Drugmakers are partnering with or investing in diagnostic companies to leverage the latter’s innovative blood-based biomarkers (BBBM) technologies in the clinical trials of their own drug candidates. This trend is likely to continue.

Not only drugmakers but also more prominent healthcare diagnostics companies, such as Roche and Beckman Coulter, are partnering with early-stage biopharmaceutical companies, such as ALZpath, to develop and commercialize AD ptau217 tests. Collaborations such as these are a testimony to the fact that it is mutually beneficial for AD industry stakeholders to work in tandem to advance AD diagnostics research, a significant growth-driving factor for the market.

Mind over Matter How Non-invasive Neuromodulation Is Becoming the Future of Pain Management by EOS Intelligence
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Mind over Matter: How Non-invasive Neuromodulation Is Becoming the Future of Pain Management and Beyond

Scientists have been researching the possibility of using electrical impulses to treat many health conditions. The starting point was the introduction of the first TENS (transcutaneous electrical nerve stimulation) device in the 1970s in the USA. Its goal was to test the tolerance of chronic pain patients to electrical stimulation. In recent years, non-invasive neuromodulation has emerged as a promising field for treating various neurological disorders. This field will likely experience significant growth in the coming decade, thanks to technological advancements, such as AI-powered sophisticated wearables.

Non-invasive neuromodulation is emerging as a novel treatment for several diseases

Non-invasive neuromodulation is a technique that uses external devices to apply electromagnetic fields, electrical currents, or other forms of stimulation to the brain to enable targeted modulation of neural activity.

The technique is effective in treating a range of conditions. Currently, several devices are available in the market for treating illnesses, including chronic pain, tinnitus, diabetic neuropathy, and functional disorders such as bladder and bowel control.

The non-invasive neuromodulation market encompasses a diverse array of devices that can modify neural activity without the need for invasive procedures. This includes transcranial magnetic stimulation (TMS), transcranial direct current stimulation (tDCS), and TENS.

TMS therapy sessions typically require the presence of a physician. An example is MagVenture Pain Therapy, a TMS device developed by a Denmark-based company, MagVenture, for treating chronic pain.

TENS and tDCS devices are portable and, hence, suitable for at-home treatments. The FDA has not yet approved tDCS in the USA for medical use. However, its use falls under the Investigational Device Exception (IDA) regulations. Though it is marketed for non-medical uses in the USA, it is used for medical treatment in regions such as the EU, Singapore, and Israel.

TENS devices are small, battery-powered devices that consist of leads that connect to electrodes, sticky pads placed on the skin in the area that needs stimulation. An example is Cefaly, an FDA-approved TENS device developed by the US-based Cefaly Technology for pain management. This device works by stimulating and desensitizing the primary source of migraine pain, the trigeminal nerve, using a precise electrical impulse.

Mind over Matter How Non-invasive Neuromodulation Is Becoming the Future by EOS Intelligence

Mind over Matter How Non-invasive Neuromodulation Is Becoming the Future by EOS Intelligence

The non-invasive neuromodulation market is showing rapid growth

The global non-invasive neuromodulation devices market for neurological and psychiatric disorders was approximately US$1.2 billion in 2022. According to a 2023 report by Report Prime, an India-based market research firm, the market is projected to grow at a CAGR of 7.2% from 2023 to 2030, reaching US$2.1 billion by 2030.

Several reasons fuel this rapid growth in recent years, including the increasing prevalence of chronic pain and other neurological conditions (especially in older patients), the numerous advantages this technique has over invasive neuromodulation, breakthroughs in non-invasive technology, and a surge in investments.

Increasing incidence of neurological disorders is a major driver

The increasing incidence of debilitating disorders such as chronic pain, Parkinson’s disease, diabetic neuropathy, etc., is creating a pressing need for new and efficient treatments to address these conditions. A 2023 study by the CDC indicated that 20.9% of American adults suffered from chronic pain, and 6.9% experienced chronic pain that significantly limited their daily activities.

Similarly, Parkinson’s disease affects nearly 1 million people in the USA as of 2023, with this number expected to rise to 1.2 million by 2030. These statistics indicate a rising trend of neurological disease burden in the USA.

One major issue that many patients and physicians face is that the current treatments for many of these conditions fall short, leaving a significant gap in the care of patients. Typically, doctors treat people suffering from chronic pain, including that of diabetic neuropathy, using painkillers. Most patients develop medicine tolerance, experience drug-wearing-off effects, or suffer from severe side effects, diminishing the overall treatment effectiveness.

Some patients may even consider drastic and irreversible surgical procedures, such as nerve amputation, due to inadequate treatment results. However, even these may not always provide the desired relief. This indicates the need for a reliable and effective solution for managing the pain, discomfort, and other neurological symptoms associated with the primary disease.

As non-invasive neuromodulation stimulates the brain areas responsible for pain processing, it alters the patient’s perception of pain. With the growing incidence of neurological disorders, this desired neuromodulation effect will continue to be in high demand, contributing to the growth of the non-invasive neuromodulation devices market.

Non-invasive treatments offer advantages over other techniques

Typically, conditions such as chronic pain are treated using a combination of prescription medicines. However, these medications, including NSAIDs, opioids, etc., come with a variety of side effects, such as digestive issues, ulcers, drowsiness, etc. Long-term use of opioids can lead to a range of negative consequences, including the development of tolerance, physical dependence, and opioid use disorder, increasing the risk of overdose and death. Conventional treatment methods also need frequent hospital visits.

Invasive neuromodulation is an effective treatment option for various neurological conditions. However, it also carries significant risks, such as site infections, perioperative and postoperative complications, blood clots, and device malfunctions. Additionally, these techniques often require multiple hospital visits.

In contrast, non-invasive neuromodulation offers several advantages over invasive methods. These wearable devices provide drug-free treatments that do not require surgery or complex installation. As a result, they are easy for patients and physicians to use.

A comprehensive study about the efficacy of various non-invasive devices is not yet available. However, controlled individual studies by companies and developers have shown promising efficiency in treating various diseases.

Moreover, a 2019 report published in BMJ, a peer-reviewed medical journal, indicated that non-invasive neuromodulation offers a potential solution for patients who are sensitive to traditional treatments. This includes patient groups such as pregnant women, adolescents, and those who experience poor tolerability or lack of efficacy from pharmacological treatment therapies.

The need to treat health conditions of these patient groups may drive the use of non-invasive devices to treat health conditions.

Scientific advancements help improve efficacy and expand applications

The non-invasive neuromodulation field has seen several breakthroughs in recent years, showing promise for accelerated R&D and new and improved devices potentially entering the market in the future.

One example is the proprietary magnetic peripheral nerve stimulation (mPNS), marketed as Axon Therapy, developed in 2023 by US-based Neuralace Medical for managing painful diabetic neuropathy.

Another example is vibrotactile stimulation (VTS), currently under development by an interdisciplinary research team from the University of Minnesota as a treatment for spasmodic torticollis or cervical dystonia. This is a painful neurological condition that affects the neck. Though the product is not yet marketable, the clinical trials are showing significant promise.

VTS devices are also being developed for conditions other than pain. An example is the VTS glove, a wearable device developed by researchers at Stanford University and the Georgia Institute of Technology in 2024. The device applies high-frequency vibrations to the hands and fingers to relieve uncontrollable arm and hand spasms. In clinical trials, patients who used the device experienced significant improvements in symptoms, with some even reporting a reduction in their use of oral medications. The team is now working to develop the device further and make it available to patients as a publicly available therapy.

Furthermore, a new treatment for tinnitus, known as bimodal neuromodulation, which involves stimulating two sensory pathways in the brain, has been developed. Ireland-based company Neuromod offers the Lenire device, which combines headphones and a mouthpiece to deliver auditory and tactile stimuli to alleviate symptoms. Patients wear the device for an hour daily, for at least six weeks, to stimulate the tongue with electrical impulses while listening to tones.

These new developments are likely to give momentum to the ongoing R&D in the sector.

Increased investment signals growing market potential

The sector has also seen an uptick in investments. For example, Nalu Medical, a US-based company, secured US$65 million in funding in 2024 to advance its neurostimulation technology for treating chronic pain.

Similarly, Avation Medical, a US-based company focusing on treating bladder issues, raised over US$22 million in 2024 to launch the Vivally System. This wearable device treats patients with urge urinary incontinence (UUI) and overactive bladder (OAB) syndrome.

Massachusetts–based Cognito Therapeutics, a company focused on developing a new therapy for Alzheimer’s disease, raised around US$73 million in 2023.

This increasing trend in R&D investments shows investors’ rising interest in the field of non-invasive neuromodulation, indicating promising market prospects.

Integration with AI is expected to pave the way for future developments

Non-invasive neuromodulation is seeing considerable success in developing closed-loop systems that leverage artificial intelligence (AI) and machine learning (ML) to give customized therapeutic output. This trend is likely to see more growth, especially with the rapid advancements in the field of AI.

An example is Avation Medical’s Vivally System, a wearable neuromodulation device that uses closed-loop, autonomously adjusted electrical stimulation to treat patients with UUI and OAB syndrome. The device uses a smartphone app to calibrate itself for each patient and then delivers a constant current of electrical stimulation through a wearable garment. It also uses an advanced AI-powered closed-loop algorithm and electromyography (a medical test that measures the electrical signals sent by nerves to muscles and received back from them) to enable continuous real-time monitoring and therapy adjustment, ensuring uniformity and safety.

Non-invasive neuromodulation device companies are forming partnerships with research institutes to develop safe ways to treat various disorders using generative AI neuromodulation.

One such collaboration started in June 2024 between US-Swiss generative neuromodulation firm, Dandelion Science and Geneva-based research institute Wyss Center for Bio and Neuroengineering. The goal is to develop a generative AI neuromodulation platform for treating neurodegenerative and neuropsychiatric disorders.

Similar collaborations are likely to commence in the future, as it is clear that the combination of neuromodulation and AI is set to impact various treatment fields significantly.

Expansion of insurance coverage could boost treatment accessibility

Conventionally, chronic pain treatment involves a combination of drugs and physical therapy. The US patient usually pays 20% of their Medicare-approved amount. People with severe pain spend about US$7,700 on annual healthcare expenditures, and with insurance, they have to spend around US$1,600 annually. For the management of pain conditions such as migraine, the out-of-pocket expense can increase to 30% of their Medicare-approved amount.

Non-invasive neuromodulation treatment has proved to be more cost-effective than conventional treatments. Although many non-invasive pain management devices are not covered by insurance, some are eligible for reimbursement.

For instance, Nerivio, a wearable device for treating migraine, is covered by Medicaid and Highmark Insurance. Moreover, Theranica, Nerivio’s Israel-based parent company, introduced the Nerivio Savings Program in October 2020 to help US patients access the device. It is a reimbursement plan that allows patients to receive their first device for a copay of up to US$49 (for 18 treatments), depending on their insurance coverage. The refill costs US$89 for those without insurance.

Additionally, patients may be able to use Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) to pay for specific approved devices. An example is Cefaly, for which, though not covered by insurance in the USA, consumers can use HSA and FSA funds or finance their purchase with Affirm (a US-based financial technology company that offers flexible payment options) for US$36 per month upon qualifying. Without insurance or other financial aid, the upfront cost varies from US$330 to US$430, and an additional US$25 for three reusable electrodes, each usable up to 20 times each.

Non-invasive neuromodulation devices’ high upfront cost remains the key barrier to broader adoption 

Overall, non-invasive neuromodulation devices offer a more cost-effective option than other treatments. The most significant barrier for patients opting for non-invasive neuromodulation is the high upfront cost, especially with no insurance coverage.

For example, Israel-based Zida Therapeutics’ Zida Control Sock, a device to treat urinary incontinence, comes with an upfront cost of US$750. Without insurance, many people may find it challenging to cover this cost. This is particularly true for older adults whom conditions such as chronic pain and urinary incontinence affect the most. According to 2023 data released by the US Census Bureau, 14.1% of Americans aged 65 and older live in poverty, making these devices less accessible to them without insurance coverage.

However, this situation may improve as several companies are now in talks to receive insurance coverage for their devices. With an increase in R&D, companies can also offer robust evidence to demonstrate the effectiveness and long-term safety of the devices, prompting insurance companies to provide coverage.

With reimbursement available for companies such as Theranica and Zida, and with several other companies such as Neurovalens planning to enter discussions with insurance providers to achieve reimbursement status, the accessibility has a chance to improve in the near future. This will likely drive adoption in the coming years.

EOS Perspective

Adopting non-invasive devices will likely increase as a standalone treatment and adjunct therapy. While non-invasive treatments currently focus on conditions such as chronic pain, tinnitus, urinary incontinence, etc., experts believe that this will soon expand into other neurological conditions, including ALS, and Parkinson’s disease.

Currently, there are only seven FDA-approved drugs for ALS treatment, all of them with limited effectiveness. The significant unmet need in this field presents a compelling opportunity for non-invasive neuromodulation companies. PathMaker Neurosystems is among the few companies conducting feasibility studies and developing non-invasive neuromodulation treatment options for ALS patients.

Research is also underway to develop a non-invasive treatment for Parkinson’s disease, which was previously treated using invasive techniques. Czech Republic-based STIMVIA has reported promising results from its initial pilot study of a new treatment for patients with Parkinson’s disease as an add-on therapy.

Several new non-invasive devices are also in the development pipeline, and their clinical trials are promising. An example that has shown positive results in a pivotal trial is a treatment for improving upper limb function by Netherlands-based ONWARD Medicals.

Non-invasive neuromodulation has the potential to revolutionize the treatment of chronic pain and other neurological disorders. As the field continues to evolve, with advancements in AI-powered wearables and increased investment in R&D, we can expect to see even more innovative solutions emerge in the coming years.

Phase 3 Drug Candidates - A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence
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Phase 3 Drug Candidates – A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape?

Many biopharmaceutical companies, such as AriBio, Annovis Bio, Athira Pharma, Cassava Sciences, and Alzheon, specializing in treating neurodegenerative diseases, are developing drugs for Alzheimer’s disease (AD) that are currently in phase 3 of clinical trials. If approved, these drugs can ameliorate the AD treatment approaches to a considerable extent. A major prerequisite to this is for concerned authorities to take concrete steps to fast-track clinical trials and increase AD research investment.

With only a 1% success rate of clinical trials in drug development until 2019, the AD treatment gap is alarming. A 99% failure rate means there is a very limited influx of new, more effective, and more advanced AD drugs into the market, and the gap between available treatment options and the rising number of AD cases is increasing.

The disease burden of Alzheimer’s will rise from US$1.3 trillion in 2020 to US$2.8 trillion by 2030 globally. With the rise in the aging population across the globe, the estimated number of AD patients will increase from 55 million in 2020 to 78 million in 2030.

However, recent drug approvals, such as Elli Lilly’s Kisunla (Donanemab) in July 2024 and Biogen/Eisai’s Leqembi (Lecanemab) in January 2023, bring a ray of hope for a new approach to AD treatment.

Initial hopes for new drugs can be premature

New drugs do enter the market from time to time. However, their impact on AD treatment in the long term is not always significant. An example of this is Biogen’s Aduhelm. Based on its ability to reduce amyloid protein in the brain, the FDA approved Aduhelm (Aducanumab) in 2021 in an accelerated approval route for AD treatment.

However, in 2024, Biogen discontinued the drug in the alleged desire to reprioritize its resources in AD treatment. Experts cite weak clinical evidence for efficacy, serious side effect risks, a high price point, and poor sales among the many reasons for Aduhelm’s withdrawal from the market.

AD drug candidates succumb to clinical failures

Eisai and Biogen have been working together since 2014 to develop and commercialize AD drugs. However, they have faced clinical drug failures, similarly to many other pharmaceutical companies during that time. For instance, they had to terminate Elenbecestat, one of their AD drugs, in phase 2 clinical trial in 2019 following an unfavorable risk-benefit ratio finding by the Data Safety Monitoring Board (DSMB).

Eisai launched its first AD drug, Aricept, an acetylcholinesterase inhibitor, in the USA in 1997 in collaboration with Pfizer. The annual peak sales of Aricept were US$2.74 billion before its patent expiry in 2010. However, Pfizer exited neuroscience drug research and development in 2018 after the failure of its AD drug candidates, such as Dimebon and Bapineuzumab.

Clinical challenges in Alzheimer’s research and reallocation of resources were among the other reasons for Pfizer’s exit from neuroscience R&D and drug development. Nevertheless, Pfizer did not desert the neuroscience space completely, rather forged a spin-off company called Cerevel Therapeutics in partnership with Bain Capital.

Phase 3 Drug Candidates - A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence

Phase 3 Drug Candidates – A Ray of Hope in Alzheimer’s Disease Bleak Treatment Landscape by EOS Intelligence

Recent drug launches focus on amyloid beta targeting mechanism

In January 2023, the FDA approved Leqembi (Lecanemab), a drug by Biogen and Eisai, for AD treatment. It is a monoclonal antibody that clears away the amyloid beta plaques known to cause cognitive impairment in AD patients. With MHRA’s (Medicines and Healthcare Products Regulatory Agency) approval of Leqembi, Great Britain becomes the first European country to authorize the drug for the treatment of early-stage AD as of August 2024.

In July 2024, the FDA approved Kisunla (Donanemab) by Eli Lilly to treat early-stage AD. The drug’s mechanism of action is the same principle as that of Leqembi, an amyloid beta protein plaque targeting mechanism. Kisunla becomes the third anti-amyloid drug approved for AD treatment, following Aduhelm (now discontinued) and Leqembi. Both Kisunla and Leqembi drugs carry the risks of the formation of temporary lumps in the brain that can be fatal. Therefore, physicians advise regular brain MRIs to alleviate this risk. Neurologists and researchers are in disagreement over whether the benefits offered by these drugs are clinically meaningful.

Researchers are still studying the side effects of these two drugs. Prescribing them requires confirmation of the presence of amyloid protein in the brain. Therefore, PET scans and CSF tests are required before such a prescription.

The FDA has approved both drugs in the USA for intravenous infusions (IV) in the early stages of AD. Kisunla is administered every four weeks instead of every two for Leqembi. Therefore, Kisunla offers greater convenience compared to Leqembi.

Experts from Bloomberg Intelligence suggest that Eli Lilly will likely surpass Biogen and Eisai’s reign at the top of the AD drug market by capturing around 50% of the US$13 billion market globally by 2030. This is partly because of Kisunla’s convenient dosing and the fact that AD patients can stop taking the drug after the amyloid levels touch the clearance threshold.

Newer therapeutic approach-based drugs are in phase 3 clinical trials

Apart from the amyloid beta therapeutic approach, AD researchers are exploring the role of other mechanisms in AD treatment, such as anti-tau antibodies, neurotransmitter receptors, and synaptic plasticity or neuroprotection. Drugs based on these mechanisms are currently in phase 3 of clinical trials.

The Washington University School of Medicine’s DIAN-TU (Dominantly Inherited Alzheimer Network Trials Unit) trial is testing Lecanemab plus Eisai’s investigational anti-tau antibody E2814 in patients with early-onset AD caused by a genetic mutation. E2814 prevents the spreading of tau seeds in the brains of AD patients. This drug is in phase 3 clinical trial. The clinical study commenced in June 2024 and will complete by November 2029.

ACP-204 by Acadia Pharmaceuticals is also in phase 3 clinical trial for AD. The agent acts as an inverse agonist at the 5-HT2A serotonin receptor. FDA has approved Acadia’s previous 5-HT2A inverse agonist, Nuplazid, for Parkinson’s disease psychosis. ACP-204 will be the first drug for AD treatment in Acadia’s product portfolio if approved.

Another drug in phase 3 trial is AriBio’s AR1001, a phosphodiesterase-5 (PDE5) inhibitor. Apart from AR1001, two more AD drugs are in AriBio’s pipeline, AR1002 and AR1003 that are currently under the investigational new drug-enabling stage of clinical trials.

For better patient outcomes, researchers are attempting to develop AD drugs with non-invasive modes of administration that are likely to be less expensive and equally effective compared to AD drugs administered intravenously.

The safety and effectiveness of oral therapy candidate Buntanetap, developed by Annovis Bio, are comparable in people with early onset AD regardless of whether they do or do not carry a genetic risk factor APOE4. That is according to new data from a phase 2/3 clinical trial that tested three doses of Buntanetap against a placebo in more than 300 patients with the neurodegenerative disease. Buntanetap modulates protein production to reduce clumping. The competitive advantage of Annovis Bio over its peers is the fact that Buntanetap targets multiple proteins in the brain, such as amyloid beta, tau, alpha-synuclein, and TDP43, making it more effective than AD drugs that target a single protein.

Apart from Buntanetap, Annovis Bio has another oral drug to treat advanced AD and dementia in its pipeline, ANVS301, which is in phase 1 of clinical trial. In July 2024, Annovis Bio received FDA approval to transition to a new solid form of Buntanetap in future clinical trials allowing the company to refine its drug formulation, potentially improving its efficacy and safety profiles.

Another promising AD drug candidate, Fosgonimeton by Athira Pharma, is a small-molecule positive modulator of the hepatocyte growth factor (HGF) system, previously showing neuroprotective, neurotrophic, and anti-inflammatory effects in preclinical models of dementia. This drug is in phase 3 clinical trial. Athira Pharma ended 2023 with a strong balance sheet, signaling its better financial position to augment its ongoing pipeline development.

Eli Lilly’s new drug Remternetug works as pyroglutamyl (3)-amyloid beta-protein (3-42) inhibitors, positioning it as a promising AD drug. Remternetug will join Eli Lilly’s portfolio as a second AD drug if approved.

Simufilam by Cassava Sciences is a proprietary, small-molecule oral drug that restores the normal shape and function of altered filamin A (FLNA), a scaffolding protein, in the brain. It is now in phase 3 clinical study to test this new and promising scientific approach to treating and diagnosing AD. The mechanism of action of this drug involves stabilizing a critical protein in the brain instead of removing it. This novel approach distinguishes Cassava Sciences’ drug from other treatments that predominantly focus on amyloid-beta or tau proteins. In May 2024, Cassava Sciences raised US$125 million by selling its stock to shareholders. The funds will be utilized for the continued development of Simufilam.

Valiltramiprosate by Alzheon is potentially the first oral disease-modifying treatment for AD. Valiltramiprosate is well differentiated from plaque-clearing antibodies in development for AD due to its novel mechanism of action, oral mode of administration, and potential efficacy in a genetically targeted population. In October 2017, Valiltramiprosate/ALZ-801 received FDA Fast Track designation for AD investigation. Due to Alzheon’s significant progress in AD drug development, the company has attracted a lot of investors since 2022. Alzheon received US$100 million in June 2024 in Series E venture capital funding which will be utilized to further develop and commercialize Valiltramiprosate. This is in addition to US$50 million received in series D round of funding in 2022.

Big names dominate the competition, with clinical trials in progress by smaller biopharma players

On the competitive landscape front, the AD drug market is highly competitive, with many pharmaceutical companies financing R&D to engineer new drugs that could potentially delay the progression of AD and/or restore neuronal health. The global AD therapeutics market size was US$4.8 billion in 2023 and will surpass US$7.5 billion by 2031, as per Towards Healthcare, a healthcare consulting firm.

A couple of large players still dominate the global AD therapeutics market. Interestingly, they are not the only ones active in the AD treatment development, as several smaller biopharmaceutical companies that specialize in neurodegenerative disease treatment are working on AD drugs (many currently in phase 3 of clinical trials).

High R&D costs are a considerable factor in slowing the progress down

Between 1995 and 2021, the cumulative private spend (total R&D expenditure by pharmaceutical companies, does not include federal funding) on clinical stage R&D for AD was US$42.5 billion, with the largest share of 57% (US$24.1 billion) incurred during phase 3. During the same period, the FDA approved 878 drugs across all therapeutic areas; only six of these drugs were for AD treatment (four cholinesterase inhibitors [ChEIs], memantine, and aducanumab). These statistics speak volumes of the complex, expensive, time-consuming, and predominantly unsuccessful nature of AD clinical trials. This ultimately leads to exorbitant prices of AD drugs.

A range of factors drive the R&D costs and, in turn, the price of AD drugs. A significant component here is patient screening, which contributes to 50-70% of the cost. Patient recruitment and retention are also challenging, given the considerable length of such trials.

Moreover, patient recruitment challenges stunt the progress of AD clinical trials. The recruitment rate for AD clinical trials is as low as one patient per site per month. In terms of eligibility, 99% of AD patients who are eligible for participation in a clinical trial never consider taking part. This further increases the time taken to conduct AD clinical trials.

EOS Perspective

After decades of failure in clinical trials, two anti-amyloid AD drugs, Kisunla and Leqembi, are available in the market, forming a duopoly in the USA. There are several promising drugs in phase 3 clinical trials with a new mechanism of action apart from amyloid beta protein inhibitors. However, the disease management landscape is prone to unforeseen changes, such as the withdrawal of drugs owing to safety, efficacy, and pricing issues.

The AD treatment landscape faces challenges such as drug inefficacy, complex pathophysiology of AD, expensive and time-consuming clinical trials, delays in diagnosis by physicians, behavioral changes and deteriorating mental health of AD patients, and severe side effects of medications. These challenges will continue to impede the development of new disease management approaches.

An issue that is very likely to continue to challenge progress in developing better treatment options for AD is the severe lack of funding. Dementia research is extremely underfunded compared to HIV/AIDS, cancer, and COVID-19 in the USA. Irrespective of the fact that the deaths attributed to AD are on par with cancer, the difference between the annual US federal government funding for AD vis-à-vis cancer is strikingly huge.

AD drug development is a tough market to operate in. The ongoing issue with AD research funding persists, and there do not seem to be changes in federal funding soon. On top of that, the slow progress in successful R&D and many failed clinical research trials will likely make private-sector investors hesitate or withdraw.

In addition to this, AD drug manufacturers will also continue to face the challenge of low to modest drug sales due to poor adoption rates stemming from issues like restricted coverage.

As of June 2023, Medicare was covering AD drugs that slow down the progress of the disease provided a physician agrees to the collection of real-world evidence of these AD drugs, as per the Centers for Medicare & Medicaid Services (CMS). However, there is a significant underlying problem with drugs for AD treatment. When the drug finally enters the market, patients cannot afford the treatment, and the coverage is restricted and sometimes withdrawn. There is no foreseeable change to this impasse, and hence, the AD treatment development is likely to be slow.

If reimbursement of AD drugs is removed, patients are likely to stop administering AD drugs altogether and adopt alternative healthcare resources such as antidepressants, as found in a 2021 study by researchers from Paris-Saclay University and Memory Center of Sainte Périne Hospital in France.

The reluctance of payers to cover the treatment cost for AD is influenced by several factors beyond just the high cost of the drug. Factors include cost-effectiveness of treatments, uncertain long-term safety and efficacy benefits of treatments, clinical guidelines and recommendations, availability of alternative treatments including generics (from drug makers such as Cadila, Cipla, Dr. Reddy’s, among others), and regulatory and reimbursement policies.

The future of AD treatment approaches will continue to remain bleak, and patients will be left with only a few available drug options unless the right authorities set out a plan for fast-track clinical trial processes, increase AD research investment, and support broader insurance coverage.

IRA Are Patients Winning at the Cost of the US Pharma Sectoral Growth by EOS Intelligence
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IRA: Are Patients Winning at the Cost of the US Pharma Sectoral Growth?

The market reaction to the US Inflation Reduction Act of 2022 is mostly mixed. It is expected to change the pharma industry dynamics in terms of the competitive positioning and product pricing of those companies projected to be negatively impacted by the IRA. The answer to whether the IRA will be able to curb rising healthcare costs in the USA lies in the legislation’s on-the-ground application.

IRA to decrease prescription drug prices via a four-pronged strategy

Prices of prescription drugs in the USA are 2.78 times higher than in 33 other countries analyzed in a 2024 report published by RAND, a public policy think tank.

In pursuit of reducing healthcare costs in the USA, the Biden government passed the Inflation Reduction Act (IRA) in August 2022. One of the major goals of the act includes the reduction of prices of prescription drugs.

This is expected to be achieved through a four-pronged strategy, the mainstay of which involves the US federal government negotiating the prices of some high-priced prescription drugs covered under Medicare.

The second prong includes pharmaceutical firms paying a rebate to Medicare if they raise the price of prescription medicines covered under Medicare by a rate that is higher than the inflation rate.

The monthly cost of insulin for Medicare patients is capped at US$35, as the third prong.

The fourth prong aims to reduce prescription drug prices by capping the out-of-pocket costs of Medicare Part D patients at US$4,000 in 2024 and US$2,000 in 2025.

IRA Are Patients Winning at the Cost of the US Pharma Sectoral Growth by EOS Intelligence

IRA Are Patients Winning at the Cost of the US Pharma Sectoral Growth by EOS Intelligence

Pharma companies to suffer more due to IRA compared to projected government savings

Under the IRA, large pharmaceutical companies, defined as those with over US$1 billion in net profits, are required to pay a minimum of 15% annual taxes, a financial burden on these companies. Analysts predict that the annual revenue from corporate taxes could be to the tune of US$222 billion. Furthermore, the IRA is expected to save over US$287 billion for ten years from the roll-out, as per the estimates of the Congressional Budget Office (CBO).

Apart from the increased financial burden on some companies, experts foresee potential adverse impact on several pharmaceutical companies based in the USA to a considerable extent.

The pharma companies witnessing the least to no impact are the ones with their primary operations based outside the USA, biologics or large molecule drug producers, and the ones that do not receive government funding for R&D. This is because of the differing timelines under IRA for negotiating the prices of biologics and small molecules. Biologics’ timeline is 11 years after FDA approval, while small molecule drugs are eligible after 7 years. Therefore, Medicare negotiations will begin four years earlier for a small molecule drug that has received approval at the same time as a large molecule biologic drug.

Apart from these adverse effects, such as differential treatment of small molecule drugs compared to biologics under Medicare price negotiation timelines, there are some other negative impacts on the overall US pharma industry, such as diminishing competition among generic drug producers, decreased discovery of new treatments, and new uses of existing drugs.

IRA to affect the revenues of top pharma companies surely but variably

There are differing viewpoints regarding the impact of IRA on pharmaceutical companies’ revenue. One group of experts suggests that Medicare prescription drug negotiations under the IRA will depend on the expiration of the drug’s patent. Other experts expressed their opinion that irrespective of when a drug loses exclusivity, a significant threat to drug revenues comes from the competition entering the market and not from lower negotiated drug prices.

The first group of experts states that lower negotiated prices in 2026 are expected to have a lower impact on medicines projected to witness revenue loss owing to patent expiry around the same time. One such example of a drug losing its exclusivity in the USA in 2025 is Stelara by Janssen Biotech approved for treating psoriasis.

In contrast, pharma companies producing medicines that are expected to witness competition from their generic counterparts after 2026 are projected to lose revenue owing to lower negotiated prices even before the drugs lose exclusivity. However, some companies’ revenue will be affected more than others.

Medicare price negotiations to hit revenues of some drugmakers drastically

The pharma industry’s revenue is expected to decrease by 2% due to the new measures brought about by the IRA, as per a 2022 report by Morningstar, a US financial services firm. Among the companies that will be highly affected are Novo Nordisk, Gilead, Bristol Myers Squibb, AbbVie, and AstraZeneca. In contrast, others, such as Pfizer, Merck, Roche, and Novartis, will not be as much impacted by Medicare price negotiations.

Some 15% of global branded drug sales come from Medicare in the USA, as per Morningstar estimates. Therefore, the impact of the IRA on pharmaceutical companies depends on their reliance on Medicare sales, price adjustments, high-cost specialized drugs, and extended patent protection.

Medicare prescription drug negotiations are projected to impact pharma companies the most among all IRA measures, although this impact might not be uniform across the players. On the other hand, Medicare negotiations are projected to save the government approximately US$100 billion through 2031. The pharma companies facing the highest revenue losses include Novo Nordisk, Gilead, and AstraZeneca.

When the Medicare price negotiation measures start to roll out in 2026, two drugs of Novo Nordisk, namely, Ozempic and Rybelsus, that are approved to treat type 2 diabetes, are expected to witness an 8% decline in their projected revenue through 2031, as per Morningstar. Gilead’s Biktarvy, which treats HIV-1 infections, is expected to be subject to price negotiation in 2027 and thereby face a projected revenue loss of 7% through 2031. On similar lines, Calquence (to treat mantle cell lymphoma) and Tagrisso (to treat non-small cell lung cancer) drugs of AstraZeneca are expected to lose 6% revenues through 2031 owing to Medicare price negotiations.

In contrast, considering the existing portfolios, Pfizer, Merck, Bristol Myers, and BioMarin are expected to witness no revenue loss due to Medicare negotiations.

Medicare inflation caps to impact major pharma companies negatively

Another important IRA measure is Medicare inflation caps. This measure involves drug producers paying penalties for increasing drug prices beyond the inflation rate. It is expected to result in US$62 billion in government savings through 2031.

Around March 2023, the US federal government, along with the Centers for Medicare & Medicaid Services (CMS), released a list of 27 drugs whose prices were increased by their manufacturers at a higher rate than the inflation rate. This list included AbbVie’s Humira (to treat Crohn’s Disease) and Astellas Pharma’s and Seagen’s Padcev (to treat urothelial cancer). Gilead Sciences, Johnson & Johnson, and Pfizer are among other impacted companies by Medicare inflation caps. Pfizer had the most drugs on the list, with a total of five.

Bristol Myers Squibb is one of the pharma companies that is expected to be highly impacted by Medicare inflation caps. The company’s drugs, such as Eliquis (to treat or prevent blood clots), Opdivo (to treat melanoma), Orencia (to treat rheumatoid arthritis), and Yervoy (to treat various cancer types) are among the medicines that are expected to face revenue loss owing to inflation caps. Other drugs on the list include Novo Nordisk’s drugs such as Novolog and Levemir (both for type 1 diabetes) and Victoza (for type 2 diabetes), Johnson & Johnson’s drugs such as Imbruvica (to treat certain cancers) and Xarelto (to treat or prevent blood clots), along with Novartis’s Sandostatin (for severe diarrhea and flushing related to metastatic carcinoid tumors).

In contrast, Merck is not expected to face any revenue loss due to inflation caps, while GSK, Regeneron, Roche, and Sanofi are projected to witness minimal revenue loss as these companies have not raised the prices of their drugs beyond the inflation rate.

IRA to potentially reduce competition from generics

According to the IRA, following the price negotiations of some of the branded drugs, manufacturers of the generic versions of such drugs will have less scope to charge a reduced price for those drugs. This would disincentivize the generic drug producers to manufacture generic versions of the already low-priced branded drugs.

EOS Perspective

The IRA represents a substantial change in the US legislation that strives to make healthcare more affordable to Americans through increased access to more reasonably priced prescription medicines.

However, IRA can be expected to affect small-molecule drugmakers more negatively than biologics. Moreover, some pharmaceutical companies are projected to feel the pinch more than others in terms of revenue losses.

Companies such as Merck, Bristol Myers Squibb, and the pharmaceutical association PhRMA have filed lawsuits against some provisions of the IRA, stating that they are unconstitutional. Bristol Myers Squibb and J&J are planning to appeal after the US court dismissed the IRA lawsuits. These pharmaceutical companies are trying to find ways to circumvent the negative impact of the legislation.

IRA is also expected to negatively impact R&D and medical innovation. This is evident from the fact that biopharma companies have reduced their R&D efforts in the neuroscience space, especially since a lot of development work in this space involves small-molecule drugs. Moreover, as IRA exempts only one orphan drug from price negotiation, investments in R&D for orphan drugs are likely to get deprioritized. Many pharmaceutical companies are reconsidering their R&D planning and investment strategies to counter the effect of IRA.

IRA is clearly not a win-win strategy for all stakeholders. Pharmaceutical companies are mostly at the losing end, while patients could be winners. Considering all the positives and negatives of IRA, only time will tell the actual impact of the legislation on the overall pharmaceutical industry.

Denmark – A Trailblazer in Digital Health Innovation by EOS Intelligence
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Denmark – A Trailblazer in Digital Health Innovation

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The COVID-19 pandemic has spurred the need to embrace new digital tools and technologies within the healthcare sector. There has been a significant increase in the use of technology to provide care, resulting in improved health outcomes. In Europe, Denmark has made significant progress and is at the forefront of the digital health transformation with a 99% digitalization rate. Over the last few years, Denmark has strived to digitalize further its healthcare infrastructure, testing and leveraging technologies such as AI and robotics to implement them at full scale across the country. In this transformation, the Danish digital health system can be a source of valuable lessons, uncovering various opportunities it presents for health tech companies.

Demark’s digital health: Harnessing power from a robust public infrastructure

Denmark’s healthcare system is among the most expensive worldwide, with 10% of GDP allotted for healthcare expenditures and 90% publicly funded through taxes. The health infrastructure is highly digitalized, with almost 99% of healthcare communication done electronically.

The national e-health portal, Sundhed.dk, launched in 2003, plays a key role in Denmark’s digitalization, offering a comprehensive platform catering to both healthcare professionals and citizens alike. Sundhed.dk provides safe and secure access to an individual’s personal health records (from hospitals), medication information, vaccinations, laboratory results, appointments, and referrals. The portal is user-friendly and is regarded as one of the superior models for public healthcare information exchange worldwide.

Over the last 20 years, the Danish government has supported and invested in various digital health initiatives, rolled out several IT services, and strengthened its digital healthcare infrastructure. In 2007, the country introduced E-record, through which individuals can access their medical information from EHR systems using the Sundhed.dk portal. The government also launched Shared Medication Record, which has records of patients’ prescriptions, details of the doctor who prescribed the medicines, and information pertaining to where the medications were picked from. During the COVID-19 pandemic, the “My Doctor” app was introduced to facilitate video consultations between GPs and patients. These digital initiatives contribute to improved care coordination and increase the patient’s trust in the system.

Denmark – A Trailblazer in Digital Health Innovation by EOS Intelligence

Denmark – A Trailblazer in Digital Health Innovation by EOS Intelligence

Unraveling the blueprint: Denmark’s digital health success story

Well-formulated digital health strategies address the needs of patients and healthcare workers

Many countries develop digital health strategies, which are frequently focused solely on technical aspects, steering away from addressing the actual needs of patients and healthcare professionals. Moreover, these policies often function as plain vision documents with no clear description of action plans or the roles and responsibilities of various stakeholders.

In contrast, Denmark’s digital health strategy is well-formulated and primarily focused on addressing the needs of patients and healthcare workers. It provides a clear vision of how digital technology can help meet their needs. In addition, the strategies highlight the importance of cross-sectoral collaboration, detailing focus areas and specific initiatives that must be jointly executed. For instance, it clearly mentions how the health and education sectors should work together to promote digital health literacy.

Denmark’s well-crafted digital health policies are a cornerstone of its successful digital health transformation. Since 1999, the country has been updating these strategies every four years, ensuring ongoing review and modernization of its digital health infrastructure.

Governance models aid in the speedy integration and implementation of digital healthcare tools

Denmark follows a regional governance model instead of the top-down approach, controlled by the state (national) government. The states and municipalities are responsible for developing and implementing their own health IT solutions in alignment with the national strategy.

Further, the government has established several steering groups to aid in implementing and disseminating digital health initiatives for rapid digital uptake. For instance, Connected Digital Health in Denmark, a cross-governmental organization, manages, coordinates, and ensures the implementation of various action plans mentioned in the national digital health strategies.

In addition, the government also regularly engages in public-private partnerships to boost its digital capabilities. The country’s strong governance is considered one of the critical success factors for the digital health transition.

Common IT standards help in effective healthcare data exchange

Many countries have deployed digital health technologies; however, integration remains sparse, resulting in a fragmented digital landscape. Integrating patient information siloed across multiple healthcare segments is crucial for establishing a high-quality digital health infrastructure. The adoption of common IT standards helps facilitate this data exchange and integration.

Denmark has been using these standards since 1990 for electronic health data communication as well as improving workflows between public hospitals, general practitioners, private healthcare entities, specialists, laboratories, and home care services. The early development of these standards significantly increased electronic communication within the healthcare sector, contributing to the high level of digitalization of the Danish healthcare sector.

Strict testing protocols ensure digital health tools are user-friendly

The user-friendliness of digital technologies is considered one of the major factors for early e-health adoption. Denmark undertakes several initiatives to ensure that digital health tools and technologies are user-friendly and easy to use. For instance, the country collects feedback from healthcare stakeholders about their experience with various digital health solutions, checks if they are user-friendly, and uses the input received to develop new solutions.

The country has also implemented strict testing protocols for telehealth solutions by evaluating their performance on mobile devices and testing the products with a range of end users, including the elderly and people with disabilities.

Government’s focus on educating and training healthcare stakeholders helps them to use digital tools effectively

Denmark educates and trains healthcare workers to use digital tools appropriately. According to a 2020 Deloitte report, nearly 76.8 % of Danish clinicians mentioned that they are well-trained and supported in using digital health tools and solutions.

Local governments and hospitals in Denmark collaborate with tech professionals to provide support, education, and training on using digital solutions such as EMRs, telemedicine platforms, and shared IT standards for healthcare data exchange. Digital health literacy of front-line healthcare workers is one of the core objectives of the country’s digital health strategy.

Unlocking opportunities: Denmark’s digital health sector for health tech companies

According to Statistics Denmark, the percentage of the Danish population aged 75 or above is expected to double from 7.8% in 2017 to 14.4% in 2047. In addition, the country faces a severe labor shortage, with projections suggesting that by 2035, Denmark might have a shortage of 14,500 healthcare workers. These factors are expected to put increased pressure on the Danish healthcare system.

In order to tackle these challenges, Denmark’s government continues to invest in advanced innovative technologies and digitalization strategies. In 2018, the country launched a digital health strategy titled “A Coherent and Trustworthy Health Network for All: 2018-2024”, aiming to modernize the healthcare infrastructure further. Under this initiative, the country aims to expand telemedicine solutions, increase virtual care visits, and automate the administrative and clinical workflows within the Danish healthcare system. This initiative is creating opportunities for startups and companies offering health tech solutions in the areas of telemedicine, video consultations, remote patient monitoring, hospital automation, and diagnostics.

Danish government seeks to expand telemedicine solutions for various segments of the patient population

Denmark has been using telemedicine services since 2012, beginning with home monitoring solutions for Chronic Obstructive Pulmonary Disease (COPD) patients. The country seeks to further expand the rollout of telemedicine solutions for patients with COPD, chronic diseases, heart failure, comorbid conditions, and pregnant women facing complications. In December 2023, the government of Denmark invested about US$72 million to expand telemedicine solutions for these patients, offer digital rehabilitation courses, and increase the number of virtual consultations through GPs.

Various governmental organizations in Denmark have been looking to partner with companies providing innovative remote monitoring and virtual care solutions to facilitate home treatment.

For instance, in 2021, in collaboration with the local government, Trifork, a Denmark-based digital health company, developed a telemedicine solution called Telma for severe COPD patients. The solution provides COPD patients with medication, measuring tools, and devices to track pulse and oxygen levels at home. The Telma app transmits this data in real time and facilitates communication between healthcare professionals and patients through video consultations, thus lessening the need for frequent hospital visits.

Similarly, in 2022, two Denmark-based health tech companies, Copenhagen Center for Health Technology (CACHET) and Cortrium, forged a research collaboration to develop a novel technology to monitor a patient’s heart rhythm remotely. This allows heart failure patients to receive prompt medical care without visiting a hospital.

The Danish government is also looking to provide telerehabilitation services amidst the rising mental health issues across the country. In 2021, the government established the Centre for Digital Psychiatry to develop, test, and implement several nationwide digital services. In March 2023, the Center initiated a research project with Monsenso, a Danish mobile health company, to provide personalized digital treatment for patients with depression.

A rise in telemedicine programs catering to various segments of the patient population is expected in the forthcoming years. This surge in demand fuels the growth of companies offering telehealth solutions nationwide.

AI presents several opportunities for innovation and collaboration within the healthcare segment

Denmark actively seeks to integrate AI into its healthcare system, especially in diagnostics, presenting numerous opportunities for AI-based health companies to thrive. The country has established research and innovation centers across the country focusing on AI for uses such as identifying at-risk stroke patients, helping radiologists interpret scans, and assisting in other diagnostics.

In 2021, Denmark established the Radiology AI Test Center (RAIT) to accelerate the development and implementation of medical AI applications in the country. Through RAIT, private companies can test and validate their AI-based technologies in Denmark. For example, in 2021, through the RAIT program, several Danish hospitals in Copenhagen partnered with US-based imaging AI startup Enlitic to evaluate an AI-based algorithm to read chest X-rays. Similarly, in 2023, RAIT partnered with Cerebriu, a Denmark-based health tech company, to use AI to improve MRI imaging of the brain.

Investments in advanced digital technologies modernize healthcare infrastructure

As Denmark endeavors to digitalize its hospitals, ample opportunities arise for companies specializing in robotics and mobile health to improve hospital and clinical workflows, among other areas.

Some steps have been taken to digitalize hospitals. For instance, the Centre for Clinical Robotics (CCR), a research and innovation center for healthcare robotic technology in Denmark, aims to leverage robotic technology for various hospital processes, such as food service, cleaning, medication dispensing, clinical sample collection, etc.

Another interesting instance is the pilot project between Systematic, a Denmark-based software company, and physicians at the Aalborg University Hospital. Systematic has developed a communication platform called Columna Flow Clinical Tasking, which facilitates direct communication among the physicians at the Aalborg Hospital. The solution offers a real-time overview of the patients, including their medical conditions and the workload of hospital clinicians on duty. This empowers physicians to prioritize patients and efficiently allocate tasks during peak hospital hours.

EOS Perspective

The Danish health system is poised for an even more profound digital transformation in the coming years, aiming to improve patient accessibility and convenience. Denmark’s healthcare market is already highly digitalized, which provides a robust foundation for further digital transformation and innovation.

Home care and telemedicine, health data interoperability, AI-based diagnosis, healthcare automation, personalized medicine, and preventative health are likely the key focus areas for the next phase of digital health transformation.

Further, the country is looking to elevate patient care through its super hospital program, which involves consolidating smaller hospitals into larger, higher-capacity units. The aim is to provide superior medical care at lower costs. Technology will play a key role in improving healthcare delivery and patient outcomes in these hospitals, with applications across logistics, clinical decision support tools, diagnostic tools management, and patient engagement, among other areas.

These initiatives can be expected to make the Danish health system even more robust. The system is expected to move from a doctor-centric to a patient-centric care model, where patients would be actively involved in taking care of their own health. The country’s meticulously crafted digital health strategies, well-established digital infrastructure, and technology-proficient population lay a solid foundation to usher in the next wave of innovation.

As Denmark persists in its commitment to build a healthcare system fit for the future, there are abundant opportunities for health tech companies to thrive and drive innovation within the Danish healthcare industry.

The Promise of Comprehensive Genomic Profiling in the USA by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

The Promise of Comprehensive Genomic Profiling in the USA

Comprehensive Genomic Profiling (CGP) is a diagnostic tool that sequences a patient’s tumor DNA to identify genetic mutations that drive cancer growth. Insurance coverage for CGP varies widely depending on the type of cancer, the patient’s stage of disease, and the specific test being used.  Despite CGP’s tremendous potential to transform cancer care and diagnosis, its implementation is hindered by inconsistent insurance coverage policies.

Comprehensive genomic profiling is a cutting-edge technology that is revolutionizing cancer diagnosis and treatment. Unlike standard gene testing, which looks at a small number of genes, CGP analyzes thousands of genes across the entire genome. This provides a much more comprehensive picture of genetic mutations that may be driving a patient’s cancer, thereby leading to more personalized and effective treatment options. Despite the benefits of CGP, access to this technology remains limited due to a variety of factors, which include high costs, limited insurance coverage, and regulatory hurdles.

One of the biggest challenges for CGP has been payer acceptability. Payers tend to be cautious about covering CGP because it is a relatively new technology, and there is still some debate about its clinical value and cost-effectiveness.

Private payers in the USA are more likely to cover CGP for patients with rare or complex cancers or for patients who have failed standard therapies, such as chemotherapy or radiation therapy.

In contrast, public payers, such as Medicare, may have more restrictive criteria for coverage and only cover CGP for certain types of cancer or for patients who meet specific clinical criteria. These criteria could include a requirement that CGP tests be performed in Medicare-accredited labs. Other major public payers in the USA, such as Medicaid and Veterans Affairs (VA) health plans, also cover CGP, but each payer has different criteria for coverage. Generally, they require that the test is ordered by a physician and is deemed medically necessary for the patient’s treatment plan.

The lack of coverage makes it financially inaccessible for many patients, which limits the ability of healthcare providers to consistently offer CGP testing. This presents a significant obstacle to the widespread adoption of this promising diagnostic tool. Some payers are hesitant to reimburse CGP due to concerns about the cost-effectiveness of the test and the lack of long-term data on clinical outcomes. However, major public and private payers such as Medicare, UnitedHealth (UHC), Aetna, and Cigna, among others, have included CGP tests in their health policies in recent years, nonetheless, the coverage remains uneven.

Cost and regulatory hurdles are stifling the growth of CGP

Payers have historically covered traditional testing, such as immunohistochemistry (IHC), fluorescent in situ hybridization (FISH), and single gene tests, but have been hesitant to provide coverage for CGP. This is mainly because these tests have been around for longer than CGP, so payers are more familiar with them and are more comfortable covering them.

Another reason is that CGP is more expensive than traditional tests. While the exact cost varies depending on the specific test and lab performing it, the cost of CGP tests can range from a few hundred dollars to several thousand dollars, while traditional tests are typically in the range of a few hundred dollars. This is due to the fact that CGP tests are more complex as they analyze a large number of genes, whereas traditional tests focus on analyzing one specific gene at a time, making them less expensive.

According to a study published in 2021 by the Journal of Clinical Oncology, CGP could improve overall survival by about 6% (0.06 years, a relatively small but meaningful amount of time for cancer patients and their families) for US$9,000 per patient, compared with traditional testing strategies. On the other hand, as per a 2022 article by the American Journal of Managed Care, although the cost of CGP tests is high, these tests can help identify the most effective treatment options for each patient, which can lead to better outcomes and fewer unnecessary treatments, which in turn can lower overall healthcare costs.

Read our related Perspective:
 Commentary: Genetic Testing Fraud – The Next Big Concern for the US Healthcare?

 

To further educate the industry about the benefits associated with CGP, Illumina, a California-based biotechnology company, established Access to Comprehensive Genomic Profiling (ACGP) in 2020, which is an alliance of seven members, including leading molecular diagnostics companies, pharmaceutical manufacturers, and laboratories. ACGP aims to educate about CGP for advanced cancer patients by engaging directly with the US payers.

Additionally, a few strategies are being adopted by the healthcare industry, such as bundling CGP tests with other diagnostic tests to reduce the overall cost per test. This way, instead of running a CGP test and a separate test for a specific genetic mutation, both tests could be combined into one-panel tests. This could reduce the overall cost per test by eliminating the need to run two separate tests, as well as reducing the need for multiple lab visits and samples. However, it’s important to note that the savings may vary depending on the specific tests and the laboratory.

The ambiguity surrounding reimbursement for CGP tests among the insurers also stems from the FDA’s ongoing debate over proper classification and regulatory framework for these tests. While the FDA recognizes the potential benefits of CGP, concerns linger about its quality, accuracy, and cost-effectiveness. To address these concerns, the FDA has been working with stakeholders to establish reimbursement policies that make CGP tests accessible to patients. These stakeholders range from academic institutions (such as Mayo Clinic and Memorial Sloan Kettering) to health insurance companies (such as UnitedHealthcare and Aetna) to CGP test developers (such as Guardant Health and Foundation Medicine).

Payers’ coverage for CGP is expanding but is highly uneven

Payers, such as Aetna and Cigna, have included CGP tests in their health plans but do not cover all types of cancers. While an increasing number of payers is expanding coverage for CGP, there is a lot of variation in terms of what is covered and for which types or stages of cancer.

For instance, Aetna announced in 2020 that it would cover CGP testing for certain types of breast and colorectal cancer. However, the coverage for each type of cancer gene mutation is different.

While Aetna’s policies for CGP coverage are very nuanced, Cigna’s are complicated. Cigna‘s coverage varies depending on the type of CGP test being ordered, whether the test is considered medically necessary for the patient’s condition, and the patient’s location. Sometimes, the patient needs to meet certain criteria to be eligible for coverage (e.g., only the advanced stage of cancer is considered under coverage).

Similarly, UHC, one of the leading private health plan providers in the USA, also limited its CGP coverage to patients with advanced cancers, such as lung, breast, or colorectal cancer. However, in early 2023, UHC issued a new policy expanding coverage for CGP tests from Foundation Medicine and Guardant Health. The new policy covers CGP tests for a wider range of cancers, including early-stage cancers and other types of tumors. The goal of this policy change is to increase access to CGP testing and to help catch cancer earlier when it is more treatable.

Aetna and Cigna are not far behind in expanding their coverage for CGP tests. In 2023, both companies included additional benefits for members receiving CGP testing, such as on-site care in some facilities and counseling services.

There’s an increasing recognition that CGP can help identify patients who may benefit from targeted therapies. Overall, payers are becoming more open to covering CGP, but there is still variability in their policies and coverage levels.

EOS Perspective

The adoption of CGP is creating a ripple effect throughout the healthcare industry. Payers are increasingly recognizing the value of CGP tests and expanding their coverage. By providing broader coverage for CGP tests, payers can position themselves as offering more cutting-edge care options. This can give them a competitive edge over other insurers who may not provide coverage for these tests. In addition, by broadening the coverage of tests for early-stage cancer, payers can help to identify and treat cancers earlier, which can lead to better outcomes for patients and potentially lower costs in the long run.

Further, the growing adoption of CGP has an impact on healthcare industry stakeholders beyond payers. It is likely to fuel a shift towards precision medicine, where treatments are tailored to the individual patient based on genetic information.

Diagnostic companies are likely to invest in CGP technology to stay competitive and offer more comprehensive tests. For healthcare providers, offering CGP tests allows them to differentiate themselves, improve patient outcomes, and attract more patients. However, it can also add complexity to the treatment process and increase costs if not managed correctly (e.g., wrong interpretation of genetic information due to the large amount of data for individual patients).

For test kit producers and labs, CGP is creating new opportunities for growth and market share but also increased competition and pressure to lower costs and improve accuracy.

Overall, while still not fully embraced by the industry, CGP is shaking up the healthcare landscape, creating both great opportunities and new challenges for all stakeholders.

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