Medtech manufacturers looking to capitalize on growth opportunities in the over-the-counter (OTC) diagnostics market will need to seek out partners among consumer and pharmaceutical companies, concludes a new report by Cambridge Consultants (Cambridge, MA, and Cambridge, England). The report follows a workshop hosted by Cambridge Consultants in late June, at which industry representatives from across Europe discussed the future of diagnostics as a consumer-driven market. Workshop attendees noted that the OTC tests market is poised for substantial growth in Europe, especially in nations with centralized healthcare providers such as those in the United Kingdom and Italy.

Delegates at the meeting included representatives from companies such as bioMèrieux Italia SpA, Roche Diagnostics GmbH, Unipath Ltd., Abbott Point of Care, and Procter & Gamble.

The report notes that today's worldwide consumer diagnostics sector is focused predominantly on glucose and pregnancy testing. However, the meeting delegates noted that the prevalence of conditions such as cardiovascular disease, high cholesterol, and obesity has created a major commercial opportunity and patient benefit for in-home testing and monitoring.

Overall, delegates said that the technology needed to drive the OTC diagnostics market already exists. However, they also noted that the diagnostics industry may not be capable of realizing this market opportunity on its own.

By partnering with pharmaceutical companies, diagnostics manufacturers could take advantage of the pharmaceutical industry's expertise in funding outcome studies, the report notes. Meanwhile, consumer companies could provide diagnostics manufacturers with access to consumer design expertise, as well as channels to market. An example of such collaboration is the consumer diagnostics joint venture forged by Inverness Medical and Procter & Gamble in July 2006 to explore opportunities for codevelopment and joint marketing.

"In both the United States and worldwide, the diagnostics industry hasn't really changed in a number of years," said Simon Burnell, PhD, author of the report and head of Cambridge Consultants' diagnostics group in Cambridge, England. "We see incremental innovations and new products, but these are typically aimed at the same target customers—the healthcare providers. If they continue as they are, diagnostics companies—or at least the slow movers—run the risk of missing a massive opportunity for profit and growth.

"Diagnostics companies everywhere should be feeling anxious," he adds. "Reaching this new market involves significant change and investment, which some companies do not have the resources to exploit. This is why the attendees at the recent workshop identified collaboration as the way forward. Successful collaborations among key players from the pharmaceutical, diagnostics, and consumer sectors will create a powerful and convincing offering for consumers."

To gain more insights into the U.S. industry perspective on OTC diagnostics, this fall Cambridge Consultants plans to repeat the workshop and report with a wholly North American audience of diagnostics industry representatives.

"The U.S. healthcare system has a very different structure and, consequently, a different set of drivers for the uptake of OTC diagnostics," says Ben Arlett, manager of diagnostics for Cambridge Consultants in Cambridge, MA. "In particular, the mechanism of reimbursement, the regulatory environment, and consumer awareness are very different in the United States."

Arlett says that U.S. patients appear to be far more likely to demand added control over the diagnostics tests that are performed on them than European consumers. "Therefore, the United States represents more-fertile ground for consumer diagnostics," he says. "A U.S. patient pays for his or her healthcare insurance and for a deductible at each clinician visit. Paying themselves makes them predisposed to the notion of choice.

"Pharmaceutical companies have reinforced this lately with many commercials on TV, prompting consumers to ask their doctor for different brands of drug," he adds. "This has brought brand awareness into the pharmaceutical world—turning drugs into consumer products. Against this backdrop, it is easy to believe that a similar change could easily be adopted in the diagnostic world."

On the other hand, Arlett notes, the regulatory and reimbursement models in the United States remain complicated. "The system is not as joined up in its thinking as in many European countries, and this may restrict and limit adoption of the new diagnostic products on the market," he says. "These are hurdles that can indeed be overcome, although it may take some time."

Regardless of the market, Arlett says that it is up to manufacturers to drive the market for OTC diagnostics. "In both Europe and the United States, companies need to break from the current mold of providing a product to labs, which in turn provide a service to clinicians," he says. "Diagnostic companies need to create a consumer market by targeting products at consumers themselves. There needs to be a comprehensive marketing effort to bring these products into the public eye. In effect, the technology is secondary to the marketing."

The free report based on the European meeting—titled The Future of Diagnostics: A Consumer-Driven World?—can be requested from the Cambridge Consultants Web site at www.CambridgeConsultants.com/fm_diagnostics_07.shtml.

© 2007 Canon Communications LLC

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