Thursday, December 22, 2011

Alere Acquires MAS; Enhances its Diagnostic IT Offering

The trend of in vitro diagnostic companies fortifying their information managment system profile continues, as more and more hospitals need lab systems that can report to an EMR.     News this month that Charlottesville-based Medical Automation Systems (MAS), a major provider of information management systems for point-of-care testing, has been acquired by Massachusetts-based Alere Inc.
 In 2010, Abbot acquired Starlims Technologies for 123 million dollars.   The companies software was already used by more than 500 labs.

Kalorama Information expects a $850 million dollar market for Lab Information Systems.  Kalorama Information's report on Laboratory Information Systems contains breakdowns of the market for LIS products by hardware and software, and discusses the major players and trends in the industry.  The report can be found on its website.

Tuesday, December 20, 2011

Arizona Hospital Sends Patients Home Early, With a Droid Phone

As noted in Fierce Healthcare , Flagstaff Medical Center is releasing patients with heart failure and providing them with a smartphone.  The program uses advanced 3G wireless technology and health-monitoring devices to enhance the care of patients with congestive heart failure (CHF) or other related conditions.  Zephyr Technology and Verizon Wireless are partners in this effort.

FH notes that each of Flagstaff's monitoring kits include: 3G-enabled Motorola Droid X2 smart phone with a mobile application that allows patients to rapidly record and send information to the medical center via a secure Internet portal; an oxygen and pulse monitor; blood pressure cuff; and weight scale. Additional items in the kit may include an advanced Zephyr health-monitoring system to measure other vital signs such as breathing rate, skin temperature, activity and posture.

We expect programs like these to become routine.  Kalorama Information has reported on these type of applications and the growth of handheld devices in heatlhcare in its <i>Handhelds in Healthcare</i> Report.  The report includes profiles of relevant companies. 

Thursday, December 8, 2011

Should a Molecular Test Be Treated As A Drug?

Promethus Lab's ability to patent a molecular test is at issue at the supreme court.   Mayo Clinic produced a it's own version of Nestle's Prometheus's test for auto immune diseases and wished to offer it outside its lab.  A district court sided with Mayo and invalidated the patents. Prometheus appealed to the U.S. Court of Appeals for the Federal Circuit, and that court ruled that what Prometheus patented was a "transformation" and thus could be patented.The Supreme Court will hear this case.

Fellow personalized testing company Myriad Genetic's amicus brief provides some insight into the possible industry impact of this case.  Key to the industry argument, diagnostics should be treated as drugs are.  Molecular tests are expensive to make, they involve a lot of trial and error and risk of failure, thus they should have patent protection so that the people who made the discovery of a connection can be compensated.

 Much like in the pharmaceutical industry,
personalized medicine research and development are
extremely costly and offer a very low rate of success.
The amount of time and effort required is
enormous. Additional clinical trials are required to
demonstrate the clinical utility of the discovered
correlation. Many trials are essentially equivalent to
pharmaceutical trials in both design and scope,
sometimes involving following patients for years to
determine long-term survival. Costs for research
tools such as reagents and laboratory equipment
(especially high-throughput platform equipment such
as microarray chips) can also be substantial,
especially since many of these reagents and platforms
are themselves patented products. For example,
researchers at Genomic Health reportedly spent well
over 100 million dollars and 7 years, including
numerous clinical studies involving hundreds of
patients, in bringing OncoType DX® to market.3
 In other words, if the court allows Mayo to win, they may be providing competition on this specific test, but who will be the company that will discover the next marker-drug connection?   Further the Myriad Genetics amicus disputes the contention that Prometheus is attempting to patent a natural law.

For example, while this Court has repeatedly
explained that “Einstein could not patent his
celebrated law that E = mc2; nor could Newton have
patented the law of gravity,”  the Court has explicitly upheld
a patent claiming a 
specific and practical application of the law of gravity.
Eibel Process Co. v. Minn. & Ont. Paper Co.,

The Federal Circut Court in 2010 rejected the claim that the process
Prometheus was seeking to patent was so abstract as to be non-patentable.
“[T]he claims
recite specific treatment steps, not just the
correlations themselves. And the steps involve a
particular application of the natural correlations: the
treatment of a specific disease by administering
specific drugs and measuring specific metabolite

This will be a court case to watch as it would have implications for pricing and development of molecular tests. 

Friday, December 2, 2011

anti - TNF Drugs Leading Battle Against Arthritis

Tumor necrosis factor, or TNF, related to cell death that leads to inflammation, is a main cause of arthritis pain.   According to the report, products such as Remicade, Enbrel or Humira that can block TNF have been effective in treatment and are leading in terms of revenue for the treatment of rheumatoid arthritis.  Abbott’s Humira leads the group of TNF products.  But as the report’s author suggests, the success of these products with rheumatologists and patients also means that it has become a competitive marketplace.
“Humira will likely become the world’s  biggest-selling drug  by 2016, after the fall of Lipitor in 2011,” said Melissa Elder, who authored our recent report on this topic.    “However, new products on the horizon and other factors may challenge this dominance over the next five years.”
Entrants to this area include Bristol-Myers Squibb, with its newest introduction of Orencia, UCB with Cimzia and many others. So far the existing products have fended off those challenges.  Some of the key other factors that may challenge anti-TNF dominance include new small molecule therapies attempting to vie for  first-line utilization; launch of biosimilars; and physicians gaining comfort with IL-6 therapies. One or all of these could potentially derail the anti-TNF dominance. The strongest near-term competitor is Pfizer’s tofacitinib, a JAK1-3 inhibitor. Tofacitinib is a small molecule therapy and can be manufactured  more cheaply than biologic therapies.  However, there are some safety concerns with the product.  On-going Phase III clinical trials will help to sort out the concerns and provide potential indications.
The report notes that the prescription arthritis market is not without its challenges for all drug makers.   Reimbursement for high-price biologic medicines will be challenging over the next few years as payors seek to manage cost through purchasing arrangements and cost-sharing with their insured population, which could be a limiter to price growth, according to the report.
Kalorama Information’s report, The World Market for Prescription Arthritis Treatments, has more information on this pharmaceutical market category including segment market estimates, trends in the industry and detailed company profiles.  The report can be found at Kalorama Information’s website at: 

Monday, November 28, 2011

Getting Information into an EMR: Solutions Vary

The installation of an EMR system creates an obstacle for healthcare entities: How to transform all the paper forms and physician-patient conversation into electronic health records.  There are certainly laptop-weilding tech-savvy physicians out there, and iPads are popular with the profession.  But for most, it's not practical to have a computer, no matter how small, play a role in the patient office visit.  Physicians converting to EMR are figuring out ways to get information that was collected in paper form into digital records so that it can be utilized and begin to meet meaningful use requirements.

-For some, dedicating a staff member, an office worker or medical assistant into the role has been the best way to ensure that electronic records are quality-assured and that they met the standards of the organization.

-Many physicians, group practices or hospitals have taken to hiring scribes in order to convert paper records and forms completed by the patient into digital records.   There are numerous companies offering this service.  A fee of $20 an hour is not unusual for these services. 

-For others, digital pens are a solution.  The heatlhcare worker or the patient will enter information into the digital pen as they fill out necessary forms.  One such pen product by Shareable Ink actually learns the users handwriting over time.

Monday, November 21, 2011

Patients Avoiding Medical Care Due To Costs

One of the stats we are tracking constantly as we publish Kalorama Information forecasts is doctor visits. Trends in doctor visits is an indicator of how the healthcare system is functioning, but especially diagnostics where an increase or decrease in doctor visits will be associated with test volumes.  Doctor visits have been in a downward trend since the beginning of the recession, reaching a point where some suggest that when patients do visit, they are sicker.  According to Amednews,  US patients are increasingly reducing doctor visits due to cost, and this could be leading to sicker patients. 

In the latest Commonwealth Fund study, when broken down by insurance status, 76% of the uninsured had problems with access because of cost.  Patients in industrialized countries have health care bills, but U.S. patients with complex medical needs were more likely to have trouble paying them. "Sicker adults" were defined as those who rated their health as fair or poor; received care for a serious chronic illness, injury or disability within the past year; underwent surgery within the past two years; or had been hospitalized within the past two years.
 Other sources suggest that the decline may be permanent.

"I don't think we'll see the same utilization patterns again," said Michael Thompson, a New York-based principal for PwC's Global Human Resources Division, which surveys clients on health issues. "Health care is not free anymore. That has an impact on how people are engaging the system."
We've looked at these issues in our report on 'Out of Pocket Healthcare.' 

Wednesday, November 16, 2011

New Tests Need for Tropical Diseases as they reach US and Europe

Point of care test makers should produce tests now for diseases affecting the developing world, before they reach developed nations.  The finding was published in Kalorama Information's recent report, Point of Care Diagnostics for Emerging Infectious Disease Threats (Dengue Fever, HIV, HPV, STDs, Chagas, TB, and Other IDs): Market Analysis and Technical Considerations.

According to World Health Organization statistics, globalization has made the world a smaller place in a very short time, with numerous reports of the spread of imported diseases such a lyme, Chagas and malaria to regions where they were not usually present. Chagas Disease, Dengue, Malaria and TB are among the diseases the World Health Organization lists as ‘emerging’ for North America.  The same diseases are emerging in Western Europe (though chagas cases are extremely rare in that region.)  Global travel and trade, along with climate change, are expanding the habitats of the mosquitoes that carry many of the vector-borne Our lead diagnostic analyst, Shara Rosen says:

“Sitting comfortably in the easy chairs of N. America and Europe, there is a false complacency that most of the diseases featured in this report are a problem of developing countries.  The situation in developed countries is probably less urgent for the tropical diseases.  But it is equally important to have better rapid tests for HIV, tuberculosis and sexually transmissible diseases worldwide."

The report predicts strong demand for rapid and efficient tests for countries in the developing world, financed from large foundations, but also suggests that healthcare providers in developed countries can also benefit.    
The full report details the companies that are making tests now and breaks down the testing market in terms of diseases.

The report can be found at

Friday, November 11, 2011

Done Right, Retail Clinics Can Work for Wal Mart...Or Other Outlets

In-store medical clinics represent a viable business for retailers who locate and manage them correctly.   Kalorama has completed 3 studies on the nascent industry over the past five years and estimates retail store sales at $733.4 million.  We’ve always felt our forecasts could be dramatically changed if a major retailer jumped in.  

Recent news suggests that may happen.  WalMart sent out a request for information document to strategic partners that was obtained by media sources indicated that WalMart planned to offer primary care services to its customers and sought a partner to help do that.  Further statements indicate the retailer intends to take advantage of healthcare reform and the possibility of millions of newly insured.  According to Kalorama, the retailer could benefit from tying new clinics into the store rather than keeping it as an independent entity outside the main traffic zone.  Some of the old Wal Mart locations were near the entrance to the stores.

This is clear.  The clinics can’t be seen the same as a travel agency, optometrist or Subway sandwich shop.  Our research has found that retail clinics worked best when connected to pharmacies, when supported by the management of the store and when their success or failure was measured on indirect as well as direct revenue.   We note  the success of retail clinics in pharmacies versus other locations.  The two strongest retail clinic chains mirror the two strongest drug store chains, CVS and Walgreens. CVS’s Minute Clinic grew from 541 stores in 2009 to over 560 in 2011. With fewer stores but faster growth, Walgreens has embraced the concept; its Take Care Health has gone from 250 to approximately 330 in two years’ time.  

Kalorama’s study indicated that mass outlets like WalMart or Costco could gain at least $800 per day from indirect revenues – extra purchases made by customers who came to the store to receive primary care services.  This is most likely what's on the retailer's mind as they consider more clinics.

Wednesday, November 9, 2011

To Sell Medical Beds, Companies Looking Outside the US and Europe

Makers of the beds used in hospitals, nursing homes and patient’s homes  will see their best growth from markets outside the U.S. and Europe, according to our latest healthcare market research report.  According to the healthcare market research publisher, the 5.3 billion dollar market for medical beds will see small growth over the next five years in traditionally strong markets but growth can be expected in other countries.

Medical bed makers selling to Europe have already encountered lower sales due to cost restraints, and changes to the US healthcare system are likely to have the same effect.   At the same time, we expect sales of medical beds in the rest of world to more than double by 2016.
This change the way bed manufacturers look at their marketing efforts and where they locate distributors and sales personnel..  As a percentage of the total market, the report forecasts that sales outside the US and Europe will grow from 13% to 18% of all medical bed sales between now and 2016.  Africa, Middle East are among the regions that Kalorama sees companies targeting more in the future.   India presently has one-fifth of the world average number of hospital beds per million population and an estimated 455,000 additional beds will be required by 2012, an investment estimated at over $30 billion.  

We note that the "rest of world" market, as it is labeled in our report, still represents the smaller portion of total sales and bed manufacturers will still need to adapt to competitive bidding and other changes in the major markets.   Innovation and production cost reduction are likely at most firms. 


Friday, November 4, 2011

Dramatic Change in X-Ray Market As Digital Exceeds Traditional Systems

Kalorama Information estimates that digital X-Ray system sales will exceed those of traditional x-ray systems used for a medical (non-dental) purpose in 2011.  According to the healthcare market research publisher, revenues for digital X-ray systems are the largest component of the 12 billion-dollar radiography market, slightly higher than the firm’s projection for traditional systems.   According to Kalorama Information’s Report: Medical Imaging Markets: X-Ray, Digital X-Ray, CT and Other Radiography Systems, digital x-ray will exhibit the highest growth in the market radiography market which includes mammography, fluoroscopy, dental imaging, computed tomography, and analog x-ray systems.
Our recent report states that it is initially expensive to purchase a digital system such as the Philips DigitalDiagnost or the Siemens AXIOM Multix, or the products of several other companies.  But with continued usage, operating costs are lower than those of standard radiography. Digital systems do not require film and processing, the annual costs of which can be as great as the capital cost of standard radiographic equipment.   And, once a digital system is installed, a large film storage facilities are no longer needed.   
“The initial cost of buying a digital system is several times higher than a conventional system,” said Joe Constance, the report’s author and imaging analyst for Kalorama Information.  “But the high cost can be justified, particularly  in a high volume setting.“
Kalorama finds that it is not cost savings but convenience and usability that are especially driving system sales.  Diagnosticians can retrieve digital x-rays almost instantly from a computer terminal.   The movement to digitize diagnostic imaging is closely tied to the movement to boost health care efficiency through the digitization of health care records – electronic medical records (EMRs). As a result of steadily increasing digital business, radiology equipment manufacturers that once had significant involvement in film and film-related technologies have been investing in alternative digital technologies.
The report also notes change in the competitors operating in x-ray equipment.  Because innovation relies greatly on funding, large companies with flexible budgets for research and development have owned a sizable percentage of the market. But others, such as Kodak, have left the business. That company decided to focus its attention on the significant digital growth opportunities in consumer and professional imaging and graphic communications. 
            The report contains analysis of the market including company profiles, regional market breakouts, key trends and market shares of competitors.  The report can be found at:

Friday, October 28, 2011

DNA Microarrays Labs Find Use But Resist New Purchases

Our Linked In site discusses the  changing use of DNA microarrays by labs.  Only a small percentage of labs will continue to purchase these systems. 

What do vendors do when customers using a product don't plan to use it much longer? In the case of   DNA Microarrays it means vendors must adapt, sell consumables, and take advantage of the installed base of market new products.

While labs are getting use out of DNA microarrays, in the future they plan to make changes. Kalorama's most recent survey of labs 'DNA Micorarray Trends' found that labs using DNA Microarray for gene expresson profiling, SNP genotyping and other tasks will for the most part keep their existing systems and not upgrade. When they do get a budget for purchasing in many cases tasks performed by the microarray system will be shifted to some of the powerful next generation sequencing products.

Our survey found that only about 10% of labs have plans to replace their microarray system and that it was more common for upgraders to desire a sequencer rather than a microarray system. Vendors have caught on. Companies have been offering trade-ins or also making hybrid systems capable of both running microarrays and sequencing.

In this, our analyst Justin Saeks sees a slight advantage for Illumina. See our Linked In site for more of the insights discovered in this DNA Microarray lab survey conducted by Kalorama Information analyst Justin Saeks.

Wednesday, October 26, 2011

A Mega Test Service Company in the Works?

Rumors of a Quest-LabCorp merger abound now that the CEO of Quest has resigned.   Although highly competitive in the low-growth standardized testing area,  Quest was hurrying to add new specialty test products to its portfolio to boost profits. 

Clinical lab services is a market with two large players (in the US) but then a fairly broad range of little competitors.  Often in such a market scenario that would mean that a few of the smaller competitors will gain market share, enter the top positions and the market will evolve.  In lab testing, there is still a strong regional element.  And the growth is in specialty molecular tests and in situ hybridization tests that require special knowledge, which allows niche players to thrive.  This means there might be a broad group of competitors for some time. 

Thus even though Quest and LabCorp are the largest, they still may need to join up in order to manage the threat from the many competitors offering speciality solutions. 

Monday, October 24, 2011

Will Healthcare Be Ready For New Patients...One Early Indication

As this article in American Medical Association's journal  highlights, one indication of whether the healthcare system is ready for the expected flood of new patients with insurance is the twenty-somethings on their parent's plans who are the immediate result of the legislation's passage.  They are not a perfect indicator because younger age obviously has an impact on health.  But, as this article indicates, there could be as many as 600,000 new insured patients in America and physicians must be ready for the surge.

Our report on Healthcare reform called 'Winners and Losers' highlighted the effect on primary care physicians that the legislation would have.  They unfortunately were not seen as winners from the legislation.  Because they are capitated and in many cases maxed out as to the nubmer of patients they could see, the increase in patients was a general negative for this group.  It could be a positive for RNs and PAs, in states that encourage the practicies of these professionals.

Wednesday, October 19, 2011

Medical Market Opportunities Among China’s Second Tier Cities

Companies marketing pharmaceutical, medical device and diagnostic products may find the best growth opportunities in China’s second tier cities

In a recent report we note that the percentage of Chinese residing in urban healthcare markets rose from 36% to 50% between 2000 and 2010. While major urban healthcare markets – concentrated around metropolises like Shanghai, Hong Kong, Beijing and Guangzhou – have long featured high demand for a range of pharmaceutical and medical devices, pronounced urbanization throughout China has nurtured demand in second-tier cities along China’s coastal provinces, but also in the middle and western half of the country.

   “Cities like Chengdu, Chongqing in West China; Zhengzhou and Wuhan in Central China are already the beneficiaries of MNC R&D investment,” said analyst Emil Salazar, “but are also targets for medical product sales and ideal hubs for provincial and regional distribution networks for pharmaceuticals, IVD reagents and other medical supplies.” Among other findings from Kalorama’s report, provinces of Southwestern and Central China are projected to see the greatest market growth for pharmaceuticals and medical devices over the next four year with strong demand out of their emerging regional metropolises.

The full report from Kalorama Information

China Healthcare Reform and Its Impact on IVD, Medical Device and Pharmaceutical Markets

includes breakdowns of the IVD, pharmaceutical and medical device market by regions with figures from 2004 to 2015.  More information on this report can be found at:

Friday, October 14, 2011

"Class" Long Term Care no longer part of Health Care Reform

 The Obama Administration has confirmed that long-term care insurance will not be part of healthcare reform, a provision that actually made the Long Term Care Industry one of the industries cited by Kalorama Information as benefiting from healthcare reform in its report. "Healthcare Reform: Winners and Losers"

One of the conditions of passage of the healthcare reform bill was that a study would be conducted to assure that long term care insurance would be available and sustainable for 75 years.  The certification could not be made, thus the provision was dropped. 

HHS stated in a recent press release that the problem has not gone away.  The industry may have expected some increase from the health care reform bill, but as previous Kalorama Information research has indicated, this is a growing industry that will continue to see revenues despite the provision's failure. 

"The Oncology Report" Cites Kalorama Cancer Rx Forecast

In the past few years, we've noticed that biotech products like  TKIs are taking market share from chemo products and espcecially hormone therapies.  This trend was reported on in the Oncology Report, citing Kalorama's market estimate by analyst Melissa Elder.  

Of course it should be clear that pricing is part of the story behind revenue growth of biological approaches to cancer. Treatments for Avastin or Herceptin can add up to scores of thousands of dollars.  Still, the success of these products commerically does indicate increasing effectiveness and acceptance by government agencies, payors, providers and patients.

Wednesday, October 12, 2011

FISH Can Be Utilized For Infectious Disease

Making Germs Glow - we've noticed the trend of FISH testing being used not only for its key application of cancer testing but, increasingly, for detection of infectious disease. A University of Arizona team has found that a specific type of FISH testing can reduce wait time to deliver eager patients news about bloodstream infections.

Every year, more than 875,000 patients are diagnosed with bloodstream infections in the U.S., resulting in more than 90,000 deaths and significant costs to the health-care system.  The article one company utilizing a PNA-FISH (peptide nucleic acid fluorescent in situ hybridization) technology that can provide evidence of infection in hours and not days.  FISH uses fluorescent molecules tagged to genetic sequences that match those in the microbe. When added to a dried drop of blood culture containing pathogens, sequences that find their match inside the microbe cling to the pathogens.  

These type of results will propel use of these technologies for FISH testing.  We expect competition to expand in this market as key companies like Abbott are joined by smaller concerns. 

The problem that better diagnostics can solve is not only the matter of treatment lag time and patient outcomes that one might expect - of course the patient is better served when the condition is correctly identified -but also the use of antibiotics.  In medical practice, a lag time means that more often than not, antibiotics will be prescribed, even in cases where test results might have eliminated that prescription

Tuesday, October 11, 2011

Next Big IVD OP? Developing World

 Rapid tests that are easy-to-use and that can provide results in high-temperature and scarce water conditions may be the next big growth opportunity in in vitro diagnostics, according to a new report by Kalorama Information.  The healthcare market research publisher describes a quarter-billion market in the next five years for tests that can detect malaria and TB – but also rarer disease like leptospirosis and chikungunya in its new report, Point of Care Diagnostics for Emerging Infectious Disease Threats, co-authored by Kalorama diagnostic market analyst Shara Rosen and Diagnostic Consulting Network President Brendan O’Farrell.

Of the seven biggest killers worldwide, TB, malaria, hepatitis, and, in particular, HIV/AIDS continue to surge, with HIV/AIDS and TB likely to account for the overwhelming majority of deaths from infectious diseases in developing countries by 2020 and the response of the international community towards the problem has created a market.  The report cites a 13% growth rate for sales of tests that treat these the most pressing health needs.  This is greater than Kalorama forecasts for most areas of the point of care diagnostics market. 

“Now that neglected diseases have come onto the radar the supply of money to deal with it has increased,” said Shara Rosen.  “For the past 10-15 years politicians and aid agencies have come to understand that infectious diseases are not merely causes of suffering and death but are also significant barriers to economic development.”

Increased funding for infectious disease diagnostics by groups such as the Gates Foundation, the Program for Appropriate Technology in Health (PATH, Seattle, WA) and The Foundation for Innovative New Diagnostics (FIND, Geneva, Switzerland) is helping to develop a new generation of sophisticated test platforms that are designed to meet the needs of low resource environments (electricity, water, refrigeration, etc.).   These efforts may go a long way to improving the detection of pathogens that are found primarily in developing countries (malaria, Chagas, Dengue and others). 

“However, the same platforms are sorely needed everywhere,” according to Rosen. “There is a huge need for user-friendly, highly specific and reliable technologies for rural and underserved communities, worldwide, and that is where the opportunity is.”

While it is a growing market, it is not a market without competitors.  Kalorama’s market research finds that there are at least 75 vendors worldwide that market rapid test kits for emerging infectious diseases.  The current market leaders are companies that have invested in sophisticated new technologies and those that have established relationships with governments and international aid agencies .

More specific market categories as well as trends and detailed company information can be found in Kalorama Information’s Point of Care Diagnostics for Emerging Infectious Disease Threats.   The report is available from Kalorama Information at