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Biotechnol Healthc. 2004 May; 1(2): 46–51.
SWOT Analysis for Molecular
Diagnostics: Strengths, Weaknesses, Opportunities, and Threats
Daniel H. Farkas, PhD, HCLD
Director, Molecular Diagnostics, The Methodist Hospital Associate Professor of Pathology, Baylor College of Medicine, Houston David W. Bernard, MD, PhD
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“In other words, if an adenine forms one member of a pair, on either chain, then on these assumptions the other member must be thymine; similarly for guanine and cytosine„. If only specific pairs of bases can be formed, it follows that if the sequence of bases on one chain is given, then the sequence on the other chain is automatically determined”
The following popper user interface control may not be accessible. Tab to the next button to revert the control to an accessible version. Destroy user interface controlWatson and Crick, 1953.
These famous words, from the classic letter to the editor of Nature,
described the newly discovered double helical structure of DNA. Watson and Crick continue, “It has not escaped our notice that the specific pairing we have postulated immediately suggests a possible copying mechanism for the genetic material.” This quote may be the most glaring understatement in all biological literature.
Thus, over 50 years ago, was born the notion of nucleic acid hybridization, which is foundational for molecular diagnostics. It is unlikely that Watson and Crick could foresee that their discovery of DNA’s structure would lead to the widespread diagnostic use in the clinical laboratory
of DNA and subsequently RNA as an analyte, not unlike glucose for diabetes or antibodies for pathogens.
Daniel H. Farkas, PhD, HCLD
The new nucleic acid-based diagnostic tool has developed many names, e.g., molecular diagnostics, molecular pathology, molecular genetics, and molecular genetic pathology. Then, there are the inevitable subdivision names, such as molecular hematology-oncology, molecular oncology, molecular virology, and molecular microbiology. The list seems inexhaustible as we apply the tools of molecular biology to every section of the hospital diagnostic pathology department (molecular coagulation, molecular frozen section) and to general medicine (molecular cardiology). Although the fundamental discoveries of the double helical structure of DNA and the flow of genetic information from DNA to RNA to proteins laid the foundation for clinical molecular diagnostics, it came into being only with development of a key technique called Southern blot hybridization analysis. This technique dominated molecular diagnostics in the 1980s and into the early 1990s. At that point, this labor-intensive, time-consuming technique limited molecular diagnostics to low volume esoteric testing performed in regional centers of excellence.
POLYMERASE CHAIN REACTION
The development in biotechnology that revolutionized molecular diagnostics was the invention of polymerase chain reaction (PCR) in the 1980s. By the early 1990s, PCR became commonplace. Simply put, this in vitro nucleic acid amplification technique is a highly specific way to amplify targeted pieces of DNA (bacterial, viral, human) to obtain a much larger amount, so that DNA targets that were thought of as needles in a haystack in the ’80s became haystacks full of specific needles in the ’90s. One could use any number of straightforward detection techniques to complete the laboratory test.
PCR has gone through several iterations to reach its ubiquitous status in 2004. Today, PCR usually is performed by semiautomated instruments that couple amplification with simultaneous fluorescence-based detection —
a combination known as “real-time PCR.” Front-end robotics may automate
the entire process from specimen receipt to generation of laboratory test
result, but only large specimen volumes tend to justify the high costs of robotics. Real-time PCR, coupled with small, low-throughput DNA/RNA purification instruments for low- to medium-volume tests complement high-volume “home run” tests. Home run tests create an economic foundation for organizations that perform these tests, and they include the following:
; HIV load monitoring
; HIV and hepatitis C virus detection in blood units in the blood bank
; Chlamydia trachomatis and Neisseria gonorrhoeae (CT/NG) detection,
usually tested together from one specimen — the first example of
a molecular diagnostics “panel”
; Cystic fibrosis (CF) mutation detection, usually a 25-member panel
of mutations recommended by two professional societies; this is a
grander example of the potential for molecular diagnostic panels. Estimates of the size of the worldwide in vitro diagnostics (IVD) market range upward to $22 billion at the manufacturer sales level, including instruments and reagents; the United States represents about half the total market. It is reasonable to extrapolate from the sales in the HIV viral load marketplace, including screening of blood products, that the total value of molecular diagnostics is about 5 to 10 percent of the total IVD market. The growth rate has been significant, considering that only 10 years ago the molecular diagnostics marketplace accounted for less than 1 percent of the total IVD marketplace. While CT/NG and HIV testing became established in the mid-’90s, CF testing has established itself only
recently as a blockbuster test.
What is it about molecular diagnostics that has spurred such a dramatic introduction into the world of clinical diagnostics? Is the growth sustainable? This SWOT examination, which analyzes the Strengths, Weaknesses, and Opportunities of, and Threats to, molecular diagnostics, may generate some answers.
STRENGTHS OF MOLECULAR DIAGNOSTICS
Modern molecular pathology is based on PCR (owned and marketed by Roche and licensed to several other companies that also market tests) and on PCR alternatives. The most popular alternatives are:
; Gen-Probe’s transcription-mediated amplification
; Becton Dickinson’s strand displacement amplification
; BioMerieux’s nucleic acid sequence-based amplification
; Branched DNA (bDNA) technology from Bayer and Chiron
These biochemical reactions performed on purified nucleic acids from patient specimens sensitively and specifically amplify DNA or RNA to facilitate the answering of diagnostic questions. Examples of these diagnostic questions include:
; Determine presence or absence of pathogenic DNA (e.g., virus,
bacterium, parasite, fungus)
; Quantify viral load (e.g., HIV or cytomegalovirus) in infected
patients to assess efficacy of antiviral therapy
; Detect minimal residual disease (usually cancer) posttherapy
; Identify mutations associated with genetic disease (e.g., leukemia,
muscular dystrophy, and Alzheimer’s disease) to name but three of
many molecular genetic (including oncology) targets
; Sequence-specific genes involved in hereditary cancers in an effort
to apply interventional therapy rationally before disease strikes
(e.g., sequencing of BRCA-1 and BRCA-2 in breast cancer patients
There are scores of other applications (for listings, go online to ?www.amptestdirectory.org? or to ?www.genetests.org?).
In the case of molecular virology, “stat” molecular testing is now possible through rapid (~20 minutes) nucleic acid extraction from cerebrospinal fluid for detection of herpes simplex virus infection in
about an hour. With positive identification, lifesaving antiviral therapy can be rationally applied. Assessment of tumor gene “signatures,” also known as “gene rearrangement tests,” makes it possible not only to diagnose specific cancers, but also to monitor therapy and relapse. Advances in diagnostics have been made in many sections of the pathology department using the tools of molecular biology and extending to applications in identity testing, transplantation, anatomic pathology (especially fluorescent in situ hybridization, or FISH), and even biowarfare agent detection.
These examples of the strengths of molecular diagnostics demonstrate that the diagnostic pathology laboratory has fully embraced nucleic acid as an analyte. This type of testing has a market size equal or soon-to-be-equal to that of the protein tests for immunodiagnostics, serology, and other determinations. Clinical chemistry analysis of conventional and traditional analytes such as glucose or sodium still dominates the marketplace. Yet, the highly specific answers provided by molecular diagnostics coupled with their potential to provide physicians
with valuable personalized information on complex diseases represent key strengths and growth potential.
In summary, pathology has entered the genomic era. As molecular diagnostics continues to mature, it is in an excellent position to grow as medicine moves into the post-genomic era with the elucidation of the role of more and more genes and gene products in complex diseases. While investigation of certain individual genes in some cancers is diagnostically advantageous, cancer and many other diseases, including hypertension, cardiovascular disease, obesity, and diabetes, are multigenic and complex. Molecular diagnostics is poised to take advantage of the additional information coming from sequencing of the human genome. The rate of growth of these diagnostic applications promises many more blockbuster applications for molecular diagnostics in this decade alone. Go to:
WEAKNESSES OF MOLECULAR DIAGNOSTICS
In real estate, the mantra is “location, location, location.” In molecular diagnostics, the holy grail seems to be “content, content,
content.” The marketplace is well served by the vendors that are supplying equipment and reagents to molecular diagnostics laboratories. Start-up and well-established companies alike are constantly trying to establish and increase sales through introduction of new tests. For example, in the past several years, new tests have been added to the molecular pathology laboratory menu in hematology, coagulation, and iron overload disease.
Aside from CF mutation testing, however, no test recently has demonstrated extremely high use. If HIV and CF are home run tests, then other tests, such as the FLT3 analysis for hematology, Factor V and prothrombin Leiden
mutation detection for coagulation workups, and hemochromatosis testing for iron overload disease are no more than solid base hits up the middle. In the Northern United States in early spring, the first moderately warm day tends to drive winter-weary inhabitants to push the season with spring-like garb, while winter clearly has every intention of returning. Are the biotechnology companies pushing the season of the post-genomics era? So-called “one-off” tests with a single analyte generally do not portend huge financial returns in molecular diagnostics; therefore, most companies instead explore opportunities for test panels that allow analyses of many markers or pathogens simultaneously.
The exception is the market leader, Roche, which continues successfully to add “one-off” tests to its dominant real-time PCR platform. Some
tests have been brought to market prematurely to generate sales in the diagnostic community, and in the process have attracted the negative attention of regulatory bodies. An example is the Roche-Affymetrix cytochrome P450 chip, which the U.S. Food and Drug Administration has suggested requires more regulatory oversight.
Modern medicine is based on remarkable discoveries of biomedical research. Medicine is conservative, however, reaching new levels of service incrementally and slowly. Only after years of research and trials does a new test or procedure become standard care. This is true in every specialty.
Much investigation remains in basic and translational research laboratories to establish the genes and gene expression profiles that are important in diagnosing and managing complex diseases. Many trials must be designed to determine whether test panels that are technically possible are useful clinically. Simply creating a panel of pathogens’ target nucleic acids may not mean physicians will embrace it as pivotal for managing their patients. The time is coming for molecular panels because progress in that endeavor is inevitable, but in 2004 the era of molecular panels has not fully arrived. Optimistically, this seeming weakness of molecular diagnostics may be described alternatively as an opportunity. The reagents sold by IVD companies are among the most expensive used in the hospital-based pathology department or reference laboratory. Furthermore, some tests, while important to offer and perform, are ordered so rarely that economies of scale are not realized by large batches for test runs; this adds to the high expense of performing molecular diagnostic testing. The government-based reimbursement of molecular diagnostics laboratories for performance of molecular tests is inconsistent.
An example is viral load testing for HIV, compared with testing for hepatitis C virus (HCV). Many laboratories realize a profit margin of more than 100 percent on Medicare reimbursement for HIV viral load testing. In contrast, profit margins are minimal to nonexistent for the “same”
test, done the same way, requiring the same labor, the same equipment and virtually the same reagents, but instead targeting the genome for HCV. In fact, this test often is performed at a financial loss due to its lower reimbursement through Medicare. Non-government third party payers may reimburse at higher levels for this test.
Various industrial and professional organizations have petitioned the Center for Medicare and Medicaid Services for appropriate Medicare reimbursement for HCV viral load testing. This reimbursement situation is convoluted and complicated, with many factors to consider. Besides competing for use of limited resources at a time of multiple federal governmental priorities, such as security, patient safety, and electronic medical records, HCV viral load testing is still relatively new. Only recently have multiple studies shown that therapy such as interferon and ribavirin may be effective for some patients with HCV and that monitoring of viral loads can aid in tailoring therapy and predicting response. In the interim, until this testing is viewed as medically necessary and not experimental, the laboratory medicine community is left with the unenviable task of educating the federal government to correct its reimbursement schedules while laboratories still perform the test. The resolution of HCV reimbursement issues is critical, because hepatitis C is the most common blood-borne infection in the United States, with a death rate that is expected to triple over the next 15 years. Reimbursement aside, it may be suggested that the price of the kits used in this important diagnostic assay is too high for the marketplace, at least for low-volume laboratories that cannot negotiate favorable prices. This kind of dilemma contributes to the high cost of healthcare in this country and represents a weakness within molecular diagnostics testing. Reimbursement issues, however, do not appear headed for rapid or easy resolution. Patent protection of genes and their applications further exacerbates cost issues in molecular diagnostics. (This is discussed later within this article.)
Poor reimbursement for some molecular diagnostics tests is compounded by the actions of some third party payers. In 2003, at least two payers announced that certain molecular diagnostic tests would not be reimbursed. Both of these institutions remain in close dialogue with professional organizations to help resolve the difficult considerations around reimbursement.
These declarations of nonpayment seem to appear out of nowhere, unprovoked and surprisingly quickly, demanding the immediate attention of the professional community to provide data demonstrating the clinical utility of the affected tests. Understandably, the payers’ point of view reflects
their responsibility to beneficiaries and shareholders. The insurance industry may have concerns about significant the cost of widespread use of expensive tests that seem to be alternatives to cheaper incumbent diagnostic technologies, such as serology and culture, for the diagnosis of disease. Perhaps the emergence of new technologies and assays for
relevant analytes seems to “appear out of nowhere” to the insurance industry. To head off a flood of claims that would generate large financial exposure, blanket denials of coverage are broadcast.
Although molecular diagnostic technologies are almost 20 years old, they have become mainstream only relatively recently. Economic challenges, including reimbursement and relatively high prices, will persist in molecular diagnostics for the foreseeable future.
OPPORTUNITIES IN MOLECULAR DIAGNOSTICS
Opportunities abound in the field of molecular diagnostics — for example,
in pharmacogenomics, panels, and arrays. Further, new technologies may enable point-of-care testing and new medically relevant analytes that will emerge from the completion of the sequencing of the human genome. Pharmacogenomics may be the most immediate new opportunity in molecular diagnostics. Response to therapeutic drugs by an individual is partially a function of that individual’s genetic make-up. Given that our genomes
define our individual characteristics to a greater or lesser extent, depending on environmental factors, individualized drug metabolism is not surprising. The ability or inability to metabolize a drug is genetically determined. Thus, a particular drug may prove safe and effective in one individual, while the same drug causes a severe adverse effect in another. Today, when we present to our physicians with certain signs and symptoms, usually the physician prescribes a particular drug that clinical medicine has learned to be of value. Sometimes drug therapy fails, possibly because of genetic variations in metabolism of that drug. Genetically controlled drug metabolism may be so slow in “slow metabolizers” that the normal dose generates an exaggerated response due to build up of the drug in the body.
Conversely, diminution of effect may be expected for prodrugs that are taken in an inactive form but require conversion in the body to the active metabolite. The day is not far off when laboratories will be able to test an individual for variations in particular drug response genes. The test results would help the physician prescribe the right drug at the right dose in a regimen specifically tailored to that individual, thereby maximizing the chances of therapeutic success.
Implicit in the word “pharmacogenomics” is a synthesis of genomic
investigation and pharmaceuticals. Pharmacogenomics offers the potential for reducing the average cost of developing a new drug, now well over $1 billion (
The following popper user interface control may not be accessible. Tab to the next button to revert the control to an accessible version. Destroy user interface controlLanders 2003). Many drug companies are
investing significantly in pharmacogenomics in anticipation of shaving years off the drug discovery and approval process, bringing potentially lucrative drugs to market much sooner.
Applying pharmacogenomics also has the potential for rescuing drugs that failed in early trials by ensuring that these drugs are prescribed only to that portion of the population for whom the drugs will be safe and efficacious from a genetic viewpoint. The great opportunity for the molecular diagnostics field is that pharmacogenetic testing will need to be done before prescriptions are written. It is not a huge stretch of the imagination to consider regulatory bodies that require a diagnostic test for pharmacogenetic signatures before a prescription may be written for a patient.
The best possible way to take full advantage of pharmacogenomics would be at the point of care, in the physician’s office before the prescription
is written. Consider the day when a buccal swab (scraping of the inside of the cheek to harvest DNA-containing cells) or blood specimen would be drawn in the physician’s office. The DNA automatically would be extracted and then analyzed in an instrument that assesses the patient’s DNA for
key genetic markers to inform the physician that, for example, drug A is a better choice for this patient than drug B because this patient is incapable of metabolizing drug B into its active therapeutic form. For the height of convenience, imagine a computer or telecommunications link between the pharmacy and the physician’s office that relays the information securely to the pharmacy so the results are available when the patient arrives at the pharmacy. No time is spent waiting in the physician’s office for the test results. These are not farfetched scenarios, but real opportunities for molecular diagnostics as well as for companies offering innovative telecommunications or information technology solutions.
Indeed, real-world examples of pharmacogenomics-based prescribing exist today. Trastuzumab (Herceptin) is a drug most efficacious in breast cancer patients who exhibit a particular genetic amplification of an oncogene,
HER-2/neu. With a different kind of genetic anomaly, chronic myelogenous leukemia patients over-express a particular oncogenic protein that can be specifically blocked from performing its action by the drug known as imatinib mesylate (Gleevec).
The genetics of drug response are complex; so-called “DNA chips” already
are being marketed that allow the researcher and diagnostician to study relevant genetic signatures in patients. These will be important tools in defining practical and routine diagnostic assays for drug choice. DNA chips are ordered arrays of specific DNA probes that allow simultaneous interrogation of hundreds to tens of thousands of portions of the genome. In this sense, these are not unlike computer chips that can perform thousands of calculations simultaneously. The probes on the chip act like molecular Velcro that specifically binds related elements of the genome (while ignoring unrelated elements) for evaluation. Assuming concerns about costs and quality control are adequately addressed, chips likely will be used diagnostically. For example, complex diseases like cancer may have gene expression signatures demonstrated by chip-based analysis that may be useful in differential diagnoses of diseases.
THREATS TO MOLECULAR DIAGNOSTICS
The reimbursement challenges to molecular diagnostics were introduced in the section of this article describing weaknesses. Although these reimbursement challenges pose economic threats to molecular diagnostic services, it seems clear that hard work and open lines of communication among all interested parties must ultimately lead to appropriate reimbursement for these medically important tests; if not, test availability will become limited.
The patenting of many genes, mutations, and specific bacterial and viral nucleic acid sequences represents an opportunity for commercial developers of molecular diagnostic tests as well as a threat to practitioners of these same tests. Patents are a key part of business in this country, and they stimulate research. Companies must be allowed government-sanctioned protection of patents if they are to invest in what may be economically risky endeavors. While this is true for the vast amounts of money necessary to bring a drug to market, one must ask: is exactly the same intellectual property (IP) protection required for a test