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Why Disruptive Innovations Matter in Laboratory Diagnostics
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Article:
S. Nam.
Why Disruptive Innovations Matter in Laboratory Diagnostics.
Clin Chem 2015;61:935-937.
http://www.clinchem.org/content/61/7/935.extract
Guest:
Spencer Nam is a Research Fellow specializing in healthcare at the
Clayton Christensen Institute for Disruptive Innovation.
Bob Barrett:
This is a podcast from Clinical Chemistry, sponsored by the
Department of Laboratory Medicine at Boston Children’s
Hospital. I am Bob Barrett.
Advances in clinical laboratory testing have had a profound
impact in improving the quality of medical care. Today
laboratory diagnostic tests inform physicians and patients of
the exact causes of a number of diseases and disorders,
including cancer, chronic diseases, infectious diseases,
sexually transmitted diseases, and genetic disorders.
Laboratory diagnostics have traditionally served as the
trailblazers of medical innovation by creating new pathways
to identify and overcome difficult medical conditions.
However, a challenge facing the clinical diagnostics
community is in the rising cost of healthcare. Less progress
has been made to make diagnostic tests more affordable
and accessible.
With genetic testing expected to become more prevalent in
the future, the cost issues in laboratory diagnostic testing
will only become more serious. Without a major paradigm
shift the confluence of these conflicting issues lowers the
visibility on how research efforts, investment activities, and
usage decisions will be made in the clinical diagnostics
community.
In the July 2015 issue of Clinical Chemistry, Spencer Nam
from the Clayton Christensen Institute for Disruptive
Innovation published an opinion piece titled ‘Why Disruptive
Innovations Matter in Laboratory Diagnostics.’ Mr. Nam joins
us in this podcast.
Tell me what are some challenges facing the field of
laboratory diagnostics in the next 10-20 years?
Spencer Nam:
So I think President Obama outlined some of this in his
State of the Union address, but the precision medicine is
getting a lot of attention. And as we look forward to some of
the issues that we will be facing in healthcare, precision and
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personalized diagnostics will be one of the biggest
challenges that we will have to overcome. With lot of the
chronic disease patients coming out of the woodwork we will
have to think about how to diagnose their problems and
how to treat them properly. So we think that that's going to
be a big issue.
Another issue is monitoring and also clearly identifying the
disease progression of these chronic patients over time. And
right now many of our diagnostic tests and devices are not
equipped to do that well. So that’s another challenge that I
think will become more important as we move forward.
And then finally, preventive and predictive diagnostics, so
instead of dealing with diseases that have progressed to a
point where they become somewhat acute, we will be
thinking more along the lines of, how do we prevent certain
types of diseases, and in order to do so how do we actually
identify at what point we will need to intervene, or change
our behavior to a point where we will avoid onset of the
disease.
And then related to that, because we all are different
individually, how do we customize these predictive
approaches in diagnostics so that individuals can have a
customized way of knowing when I am going to be coming
down with a particular disease and how do I prevent that,
and all that will be more important as we look ahead.
Bob Barrett:
How would you describe the evolution of laboratory
diagnostics over the past two to three decades? What has
the field accomplished and where does it need to go?
Spencer Nam:
So as we look back, I think of three things that really made
significant progress. The first is the diagnosis of acute
diseases. So the refinement of polymerase chain reaction,
also known as PCR, technology has really become so
prevalent and also dominant in molecular diagnostics field,
and we have been able to really diagnose some pretty tricky
diseases over the years.
And then recently the ability to analyze genes, DNA
structures, and so forth have allowed us to identify more
rare diseases that we have not been able to identify in the
past.
So those abilities have really increased our ability to tackle
some of the challenging diseases, I would say, in the past
two to three decades.
And then you add automation to that and then you have the
confluence of large volume processing capabilities, tracking
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down some of the more esoteric diseases, and so those are
some of the positive things that we have seen.
But as we look forward, and I think I pointed some of this
out in my answer to a previous question, we certainly need
more precision diagnostics in more challenging diseases like
cancer or neurological disorders such as Alzheimer’s
disease, as well as some of the behavioral disorders. We
just don’t have any of those diagnostics really wellestablished at this point. So those spaces will be, I think,
the next frontier of the laboratory diagnostics.
Bob Barrett:
Your research at the Institute focuses on disruptive
innovations. Let’s talk about those. How are they different
from other types of innovations?
Spencer Nam:
Sure! So the way we think about innovations, we think of
two areas. First is sustaining innovations and second is
disruptive innovations.
Sustaining innovations are innovations that are essentially
incremental improvements of existing products or solutions
or services. And then sometimes these improvements could
be quite dramatic, but the idea is that whatever we have
today, tomorrow it will become more impressive, faster,
stronger, more accurate, sometimes going virtual, could be
another improvement, and these are all how we define
sustaining innovations.
On the other side, with disruptive innovations, particularly in
healthcare, the way we think of them are, those are the
solutions that make healthcare more affordable, more
accessible, and performing at a very high level.
So products and services that make healthcare cheaper and
also more accessible without compromising the quality of
the technology or of the service would be examples of
disruptive innovations.
And so, we hope that as we think about the current
challenges in our healthcare environment, as the cost of
healthcare continues to rise, that we think that disruptive
innovations will be critical in bringing down or stabilizing the
cost issues over a course of several years or decades, so
that we can actually have these life-saving products and
solutions for a broad set of patients in a very affordable
way.
Bob Barrett:
So what are some examples of disruptive innovations? Are
there examples that you can point out in laboratory
diagnostics?
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Spencer Nam:
Yes. So the disruptive innovations in healthcare, I can think
of a few. One example that is well-known is the drug-eluting
stents. Until about the 90s, the standard of care in
cardiovascular disease treatment was CABG, the bypass
surgeries, and those were very invasive. Obviously some
people were not eligible for invasive procedures like that.
Then came along stenting, that basically did not require
opening up a patient's chest, and then over time the
stenting actually became much more versatile and almost all
of the simple bypass cases were being done through
stenting, and the CABG become really isolated for more
challenging and complex cases.
At the same time, the drug-eluting stent became much
cheaper, much more affordable than these bypass surgeries,
and then the application of the stenting also became much
broader than what the bypass surgeries could address.
So more patients dealing with broad issues being able to
access the life-saving procedure at an affordable rate, these
are all sort of the key elements of disruptive innovations. So
that would be an example from the overall healthcare space.
In diagnostics, I think that most of the innovations up to
this point have been sustaining innovations in diagnostics.
Although point-of-care diagnostics, in general, seems to me
has the closest disruptive elements in them, because pointof-care diagnostics really take diagnostic tests that’s
available in the laboratory environment or in physicians’
offices and you really bring them outside of that and you
bring the test to the patient’s bedside. That is a significant
change in how the process of diagnosis is done.
So in general, the point-of-care diagnostics we consider to
be disruptive if a broad population can access that.
But these days there are lot of interesting examples that are
emerging. For example, Theranos, which is a startup
company, although now it’s worth billions of dollars, out of
California, started by a dropout from Stanford, the model
basically allows a number of tests to be offered to a patient
at an extremely affordable rate. And so something like that
could really change how diagnostic tests are priced and how
they are offered to patients.
Recently, in the last ten years, CLIA lab-based diagnostic
testing also has proliferated because of the challenges
associated with getting FDA approvals for these diagnostic
tests. That’s another model that could potentially change
the process significantly.
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And then, when we think about genetic testing, I think
23andMe has gotten lot of attention. 23andMe, when they
first came to the market was not an FDA approved test; in
fact, it was not even a clinical test, it was more of a test to
have your curiosity satisfied. Curiosities of the individuals
who wanted to trace their ancestry and so forth.
But now that once people have understood the boundaries
of what this test can do, now it has received FDA approval
for at least a couple of different indications.
And so you start this test outside of the FDA realm, and
then eventually the public acceptance has brought the test
within the clinical settings, and that is a clear example of
disruptive innovation.
Bob Barrett:
Why are disruptive innovations important in laboratory
diagnostics? Why can't other innovations satisfy those
needs?
Spencer Nam:
So in diagnostics we have the responsibility as a gatekeeper
for identifying, monitoring, and also following the progress
of all the diseases.
So diagnostic tests could actually serve as a way to really
effectively treat diseases, but it also can serve as a way to
prevent diseases.
The prevention is, as we all know, is the best way to really
deal with some of the nasty diseases that we know, but if
the preventative method becomes too costly, then that
actually makes it difficult for a large population to access
such product or service.
So, from the perspective of how do we create a product that
is going to be accepted and accessed by a large population
in an affordable way, we think that disruptive innovations
would be the best way to address those challenges or those
parameters.
And so in diagnostics we think, disruptive innovations really
need to play an important role in keeping the cost structure
of diagnostics tests at a stable fashion and continues to
allow new innovations to emerge, such that the general
population will have easier access over time to use these
tests on a regular basis to diagnose disorders that they may
have or may not have.
Bob Barrett:
What are some challenges in bringing more disruptive
innovations to clinical environments, and how can these
issues be overcome?
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Spencer Nam:
I think the biggest challenge is, although we need this, is
the regulatory environment, the FDA, as well as the
reimbursement community, putting a lot of restrictions on
what can be reimbursed, these are the challenges that I
believe make any product, but particularly diagnostics
products, to come to the market effectively and in time.
It usually takes -- some diagnostics tests will take as long
as five to seven years to be approved by the FDA, and that
is a lot of investment required and also time consumed
before a test is marketable.
So the regulatory burden really puts to lot of damper on
some of the more interesting technologies that would like to
be marketed.
But having said that, as 23andMe is an example, as I
explained earlier, 23andMe actually successfully bypassed
that problem by offering the test as a consumer product
initially, and then once they developed enough data points
to go to the regulatory bodies to explain the product
clinically, justify the product, they were able to get the
approval very quickly on a couple of indications.
So there are ways to go round the problem or circumvent
the problem by reaching out to the edge of the regulatory
boundaries, if you will, and really establishing the validation
away from the regulatory bodies initially and then try to
have the regulatory agencies approve the product after the
fact. It is an interesting strategy to bring products faster to
the market.
Another way lot of diagnostic companies have addressed
these regulatory issues is to use a new business model. So
instead of a self-contained test or diagnostic kits, they have
used CLIA labs to essentially run non-approved diagnostic
assays. Labs can market those tests to hospitals and other
large laboratories.
And so some of these business models that also take
advantage of the current policy and current rules in the
industry have also helped to overcome the regulatory
challenges.
But these are some of the examples of how we could
potentially bring some of these innovative tests to the
market sooner than later.
Bob Barrett:
Well, finally, please talk about what areas of laboratory
diagnostics you think need disruptive innovations the most,
and why?
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Spencer Nam:
I think the theme has been pretty consistent throughout this
discussion, but I think the chronic diseases, particularly
cancer, diabetes, neurological disorders, many of these
difficult to treat diseases, or the diseases that are very
difficult to pinpoint exactly when the disease begins and how
they progress, are areas where we need more effective
diagnostic products.
So not only identifying what the disease is and what's
causing it, but also understanding at what point the disease
began and then what is the rate of progression of the
disease as we follow the patient along.
And then, if we take that to the next level, each patient is
genetically somewhat unique and based on that uniqueness
or unique characteristics, can we tell something about how a
particular disease progresses in person X versus person Y?
And finding ways to address these issues will be an
opportunity or an area where disruptive innovations could
make an important contribution.
In fact, because some of these questions are challenging,
even with today's advanced technology and medical
knowledge, we think that disruptive innovations that really
focus on how to offer a very affordable but highly effective
solution to a broad population is probably the Holy Grail that
will continue to push the boundaries of our innovation
further along.
So we think that, as we think about these challenging
diseases, disruptive innovation is a significant driver for us
to really conquer these diseases over the next several
decades.
Bob Barrett:
Spencer Nam is a Research Fellow specializing in healthcare
at the Clayton Christensen Institute for Disruptive
Innovation. He has been our guest in this podcast from
Clinical Chemistry on disruptive innovations in laboratory
diagnostics.
I am Bob Barrett. Thanks for listening!
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