Critical success factors for innovative diagnostics: 1) meet a market need, 2) develop sufficient evidence to secure coverage and adequate reimbursement from payors, and 3) educate health system executives, physicians and patients.
Key Ingredients for Commercial Success
To be a commercial success, a new diagnostics test must address an unmet need, whether it’s a gap in a care pathway or excessive cost. Marketing generally leads the product definition process. Gathering voice of customer inputs ensures a deep understanding of needs and requirements as well as informs future messaging. Collaboration with R&D and Medical teams is important. The goal is to balance market needs with technical feasibility, budgets and timelines.
In today’s cost-conscious world, “build it and they will come” is a fantasy. To win big, even the best diagnostics need robust evidence to earn credibility with health systems, doctors and payors. The speed of adoption and degree of market penetration depend on efficient execution of clinical development and publication plans. Engage outside stakeholders early in the planning process. Collaboration fosters trust and ensures that their evidence needs will be satisfied. Widespread adoption requires publication of health outcomes and cost-effectiveness data in peer-reviewed journals.
If cost savings are clear, payors often issue positive coverage policies relatively quickly. Health systems will help promote the technology to physicians and adoption tends to be very rapid. Growth may depend mostly on the ability of the company to generate awareness and train users. Laparoscopic surgery is an example from the medical device industry. Procedures deliver shorter length of stay and recovery time, have fewer complications than open surgeries, and cause less pain for the patient.
If outcomes are better than standard of care, but costs are higher, adoption may be slow because it will take time to prove improvements in outcomes. Speed of adoption may also depend on physician acceptance and availability of training.
Patients increasingly accept responsibility for their own treatment, take time to investigate diagnostics and treatment alternatives and insist on best outcomes that suit their lifestyle. These educated patients self-advocate and drive physicians to new methods by shopping for treatment. Consumerism can be a powerful force to influence reimbursement.
Bringing it all together
- Execute market research to define market needs and match product design to fill those gaps.
- Cost is the major driver for new product and technology adoption. Be prepared to publish evidence of cost-effectiveness data in addition to health outcomes data.
- Engage payors and providers early in clinical development planning.
- Design patient engagement and education programs to empower them to create demand for your product.