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Laboratory-Developed Testing: Technologies and Markets

  • January 2015
  • -
  • BCC Research
  • -
  • 104 pages

This BCC Research study focuses attention on the laboratory developed testing market, commonly referred to as LDTs. It also explores the unique regulatory scheme behind LDTs, how they are marketed and used, and the analyte-specific reagents necessary for development.

Use this report to:
- Identify the various technologies with relation to their use in laboratory-developed testing (LDT).
- Learn about the unique regulatory scheme behind LDTs, how they are marketed and used, and the analyte-specific reagents necessary for development.
- Receive a deeper analysis of various issues and concerns within the laboratory-developed test industry.
- Focus on suppliers of the analyte-specific reagents used within LDTs.

Highlights
- The laboratory-developed test market within the U.S. was valued at $8.1 billion in 2013 and $9.7 billion in 2014. The market is expected to reach roughly $17.7 billion in 2019, a compound annual growth rate (CAGR) of 12.7% from 2014 to 2019.
- Laboratory-developed clinical assay segment within the U.S. market is expected to increase from nearly $8.6 billion in 2014 to $16.1 billion in 2019, a CAGR of 13.4% from 2014 to 2019.
- The related analyte-specific reagent segment within the U.S. market is expected to grow from $1.1 billion in 2014 to about $1.6 billion in 2019, with a CAGR of 7% from 2014 to 2019.

Introduction & Scope

INTRODUCTION

STUDY GOALS AND OBJECTIVES
This study is designed to focus attention on the laboratory-developed testing market, commonly referred to as LDTs or “home brews.” BCC Research has focused on the
marketplace within the United States, as it is the only industrialized country that allows wide usage of LDTs. This report explores the unique regulatory scheme behind LDTs,
how they are marketed and used, and the analyte-specific reagents necessary for development. BCC Research also provides a look at the unique players within the
marketplace and how they interact with each other.

REASONS FOR DOING THE STUDY
Laboratory discoveries have long been a source of clinical diagnostic products and have routinely developed into FDA-regulated in vitro diagnostics. This transition involves a number of preclinical and clinical testing steps to validate both the accuracy of the test and the clinical relevance of the test prior to FDA marketing and approval. The goal is to make sure such a product is safe and effective for the treatment and diagnosis of disease, and the regulatory regime has been effective in protecting the public from clinical diagnostics that are not effective.

However, there are a number of laboratory discoveries useful for clinical diagnostics that are novel, unique or esoteric, and which offer benefits for patients, but are unable
to go through the FDA approval process for a variety of reasons, such as public health, low market demand or the introduction of a new technology. Historically, in the clinical
diagnostics industry tests were marketed by individual clinical laboratories; now, due to a number of new technologies as well as national marketing capabilities, a number
of companies have made the marketing of laboratory-developed tests an industry in and of itself.

SCOPE OF REPORT
This report will focus on companies that rely on laboratory-developed testing for at least 10% of their revenue. This is meant to avoid focusing on companies and laboratories that only occasionally offer laboratory-developed tests to deal with unique patient needs. This report will also focus on suppliers of the analyte-specific reagents used within these laboratory-developed tests, as their contract manufacturing is a key to the successful development of these tests. While various technologies will be highlighted with relation to their use in laboratory-developed testing, we will not explore the markets for these different technologies in depth.

Table Of Contents

Laboratory-Developed Testing: Technologies and Markets
TABLE OF CONTENTS
CHAPTER 1 INTRODUCTION 2
STUDY GOALS AND OBJECTIVES 2
REASONS FOR DOING THE STUDY 2
SCOPE OF REPORT 2
INTENDED AUDIENCE 3
INFORMATION SOURCES 3
ANALYST'S CREDENTIALS 3
RELATED BCC RESEARCH REPORTS 3
BCC RESEARCH WEBSITE 4
DISCLAIMER 4
CHAPTER 2 SUMMARY 6
SUMMARY TABLE MARKET FOR U.S. LABORATORY-DEVELOPED TESTS, THROUGH
2019 ($ MILLIONS) 6
SUMMARY FIGURE MARKET FOR U.S. LABORATORY-DEVELOPED TESTS, 2012-2019
($ MILLIONS) 6
KEY TRENDS 7
THE RISE OF FDA REGULATION 7
GENOMIC RAMP-UP 7
DECLINE OF THE ACADEMIC MEDICAL CENTER 7
EVOLUTION OF THE LABORATORY-DEVELOPED TEST (LDT) 7
MOLECULAR DIAGNOSTICS EXPLOSION 7
SHIFTS TOWARDS LICENSING AND STARTUP INVESTMENT 8
SLOW DECLINE OF SEROLOGY 8
CHAPTER 3 OVERVIEW: DESCRIPTION OF LABORATORY-DEVELOPED TESTS 10
LIFE CYCLE OF CLINICAL DIAGNOSTIC TESTS 10
TABLE 1 LIFE CYCLE OF CLINICAL DIAGNOSTIC TESTS 12
WHY USE AN LDT 12
COMMON TECHNOLOGIES USED 13
POLYMERASE CHAIN REACTION (PCR) 13
How PCR Works in an LDT 14
NEXT-GENERATION SEQUENCING 15
How NGS Works in LDTs 16
Sequencing by Synthesis 16
SOLiD Sequencing 17
Semiconductor Sequencing 17
OTHER MOLECULAR TECHNOLOGIES 18
MASS SPECTROMETRY 18
How Mass Spectrophotometry Works in LDTs 19
HPLC-MS 19
MALDI-TOF 20
IMMUNOASSAYS 20
How an Immunoassay Works in an LDT 21
CLINICAL INDICATIONS 23
ONCOLOGY 23
INFECTIOUS DISEASE 23
RARE DISEASES 24
MATERNITY 24
CHRONIC DISEASE 24
DIFFERENCES BETWEEN LDTS AND FDA APPROVED TESTS 25
CHAPTER 4 USES OF LABORATORY-DEVELOPED TESTS 28
TABLE 2 USES OF LABORATORY-DEVELOPED TESTS 28
ESOTERIC TESTING 28
ANATOMIC PATHOLOGY 29
PUBLIC HEALTH 30
NEW TECHNOLOGY 30
MOLECULAR DIAGNOSTICS 31
MASS SPECTROPHOTOMETRY 31
GENOMICS AND NEXT-GENERATION SEQUENCING 32
CHAPTER 5 SEGMENTS 34
CLINICAL DIAGNOSTICS 34
TABLE 3 SEGMENTS OF THE CLINICAL DIAGNOSTIC INDUSTRY 34
SPECIALTY LABORATORIES 35
REFERENCE LABORATORIES 35
ACADEMIC MEDICAL CENTERS 36
ANALYTE-SPECIFIC REAGENTS 36
TABLE 4 SUMMARY OF LABORATORY-DEVELOPED TEST MARKET SEGMENTS 37
CHAPTER 6 LABORATORY-DEVELOPED CLINICAL ASSAYS 39
TABLE 5 U.S. MARKET FOR LABORATORY-DEVELOPED CLINICAL ASSAYS, THROUGH
2019 ($ MILLIONS) 39
ANATOMIC PATHOLOGY 40
TABLE 6 U.S. MARKET FOR ANATOMIC PATHOLOGY LABORATORY-DEVELOPED
TESTS, THROUGH 2019 ($ MILLIONS) 40
GENOMIC TESTING 41
TABLE 7 U.S. MARKET FOR GENOMIC LABORATORY-DEVELOPED TESTS, THROUGH
2019 ($ MILLIONS) 41
MASS SPECTROPHOTOMETRY 42
TABLE 8 U.S. MARKET FOR MASS SPECTROPHOTOMETRY
LABORATORY-DEVELOPED TESTS, THROUGH 2019 ($ MILLIONS) 42
SEROLOGY 43
TABLE 9 U.S. MARKET FOR SEROLOGY LABORATORY-DEVELOPED TESTS,
THROUGH 2019 ($ MILLIONS) 43
MOLECULAR DIAGNOSTICS 44
TABLE 10 U.S. MARKET FOR MOLECULAR DIAGNOSTICS LABORATORY-DEVELOPED
TESTS, THROUGH 2019 ($ MILLIONS) 44
CHAPTER 7 ANALYTE-SPECIFIC REAGENTS 47
ANALYTE-SPECIFIC REAGENT MARKET 47
TABLE 11 U.S. MARKET FOR ANALYTE-SPECIFIC REAGENTS FOR
LABORATORY-DEVELOPED TESTS, THROUGH 2019 ($ MILLIONS) 47
CONTRACT MANUFACTURERS 48
TABLE 12 U.S. MARKET FOR ANALYTE-SPECIFIC REAGENTS FROM CONTRACT
MANUFACTURERS FOR LABORATORY-DEVELOPED TESTS, THROUGH 2019 ($
MILLIONS)
48
SPECIALTY MANUFACTURERS 49
TABLE 13 U.S. MARKET FOR ANALYTE-SPECIFIC REAGENTS FROM SPECIALTY
MANUFACTURERS FOR LABORATORY-DEVELOPED TESTS, THROUGH 2019 ($
MILLIONS)
49
CHAPTER 8 TECHNOLOGY AND PATENTS 51
AUTISM ASSOCIATED GENETIC MARKERS-LINEAGEN 51
SUMMARY OF THE PATENT 51
IMPLICATIONS OF THE PATENT 52
LINEAGEN 52
COMPETITIVE ANALYSIS 53
DIAGNOSTIC PROCESSES THAT FACTOR EXPERIMENTAL
CONDITIONS-SEQUENOM 53
SUMMARY OF THE PATENT 53
IMPLICATIONS OF THE PATENT 54
SEQUENOM 54
COMPETITIVE ANALYSIS 55
METHODS FOR IMPROVING INFLAMMATORY BOWEL DISEASE
DIAGNOSIS-NESTLE/PROMETHEUS DIAGNOSTICS 55
SUMMARY OF THE PATENT 55
IMPLICATIONS OF THE PATENT 56
PROMETHEUS DIAGNOSTICS 56
COMPETITIVE ANALYSIS 57
METHODS AND COMPOSITIONS FOR UNIVERSAL DETECTION OF NUCLEIC
ACIDS-UNITAQ BIO 57
SUMMARY OF THE PATENT 57
IMPLICATIONS OF THE PATENT 57
UNITAQ BIO 58
COMPETITIVE ANALYSIS 58
GENETIC POLYMORPHISMS ASSOCIATED WITH ALZHEIMER'S DISEASE,
METHODS OF DETECTION AND USES THEREOF-CELERA/ QUEST DIAGNOSTICS 58
SUMMARY OF THE PATENT 58
IMPLICATIONS OF THE PATENT 59
QUEST DIAGNOSTICS 59
COMPETITIVE ANALYSIS 60
MATERIALS AND METHODS FOR DETERMINING DIAGNOSIS AND PROGNOSIS OF
PROSTATE CANCER-THE REGENTS OF THE UNIVERSITY OF
CALIFORNIA/PROVERI
60
SUMMARY OF THE PATENT 60
IMPLICATIONS OF THE PATENT 60
PROVERI 61
COMPETITIVE ANALYSIS 61
METHOD AND KIT FOR CHARACTERIZING MICROORGANISMS-FRY
LABORATORIES 62
SUMMARY OF THE PATENT 62
IMPLICATIONS OF THE PATENT 62
FRY LABORATORIES 63
COMPETITIVE ANALYSIS 63
BIOMARKERS FOR MONITORING TREATMENT OF NEUROPSYCHIATRIC
DISEASES-RIDGE DIAGNOSTICS 63
SUMMARY OF THE PATENT 63
IMPLICATIONS OF THE PATENT 64
RIDGE DIAGNOSTICS 64
COMPETITIVE ANALYSIS 65
TABLE 14 PATENT APPLICATIONS FOR LABORATORY-DEVELOPED TESTING 66
CHAPTER 9 LABORATORY-DEVELOPED TEST RandD 68
RAPID DETECTION OF INFECTIOUS DISEASE 68
APPLICATION OF GENOMIC LDTS 68
USE OF CIRCULATING TUMOR CELLS IN DIAGNOSTICS 69
CHAPTER 10 INDUSTRY STRUCTURE 72
REAGENT MANUFACTURERS 72
REFERENCE LABORATORIES 72
ACADEMIC MEDICAL CENTERS 72
SPECIALTY LABORATORIES 73
REGULATORY 73
TRENDS IN PRICE AND PERFORMANCE 73
INDUSTRIAL CHANGES 73
CHAPTER 11 GOVERNMENT REGULATIONS 75
CLINICAL DIAGNOSTICS 75
CLIA VS. FDA 76
TABLE 15 DIVISION OF LABORATORY SERVICE CENTERS FOR MEDICARE AND
MEDICAID SERVICES, LABORATORIES BY TYPE OF FACILITY (EXEMPT/NON-EXEMPT
COMBINED), CLIA UPDATE, THROUGH JUNE 2014
77
IMPACT OF THE FDA'S GUIDANCE ON LDTS 78
SUMMARY OF FDA'S DRAFT GUIDANCE 78
IMPLICATIONS 79
CASE STUDY: GOOGLE'S 23ANDME 80
REGULATIONS OUTSIDE OF THE UNITED STATES 81
REGULATIONS WITHIN ASIA 81
AUSTRALIAN LDT REGULATIONS 81
STATUS OF LDTS WITHIN EUROPE 82
HEALTH CANADA AND LDTS 83
CHAPTER 12 INDUSTRY ISSUES 85
INDUSTRY ANALYSIS 85
FDA VERSUS THE LDT INDUSTRY 85
FDA's Perspective 85
LDT Industry's Perspective 85
Points of Contention 86
Potential Paths Forward 86
Evolution of Genomic Tests 87
TWO-TIER BUSINESS 88
REIMBURSEMENT AND PAYER MARKETS 88
CODING A TEST 89
VALUING THE LDT 89
POTENTIAL SOLUTIONS 90
INDUSTRY RECOMMENDATIONS 90
INVEST IN INFORMATION TECHNOLOGY PARTICULARLY DATABASE
MANAGEMENT 90
ENCOURAGE TIE-INS WITH EXISTING ELECTRONIC HEALTH RECORD
SYSTEMS 91
SUPPORT EFFORTS TO REGULATE LDTS FOR ROUTINE ANALYTES 91
SELL OFF INTELLECTUAL PROPERTY 92
ENCOURAGE ONE-STOP SHOPPING WITHIN SPECIALTIES FOR
LABORATORY-DEVELOPED TESTS 92
CLINICAL LABORATORY IMPROVEMENT AMENDMENTS (CLIA): STATE SURVEY
AGENCY CONTACTS 93
CHAPTER 13 COMPANY PROFILES 104
23ANDME 104
ACCESS GENETICS 104
ARUP LABORATORIES 104
ASURAGEN 105
BD 105
BIOREFERENCE 106
BIOTHERANOSTICS 106
CYTOCELL 107
EMPIRE GENOMICS 107
ENZO BIOCHEM 107
EUROFINS 108
FRY LABORATORIES 108
GENECENTRIC DIAGNOSTICS 108
GENOMIC HEALTH 109
IDT 109
ILLUMINA 109
LABCORP 110
LUMINEX 110
MERCK KGAA 110
MOLECULARHEALTH 111
MYRIAD GENETICS 111
NEOGENOMICS 111
OLIGOS ETC. 112
PROVERI INC. 112
QUEST DIAGNOSTICS 112
RIDGE DIAGNOSTICS 113
ROSETTA GENOMICS 113
SELAH GENOMICS 114
SEQUENOM 114
SIEMENS 115
SIGNAL GENETICS 115
THERMO FISHER 115
UNITAQ BIO 116
VENTANA MEDICAL SYSTEMS INC. 116

LIST OF TABLES

SUMMARY TABLE MARKET FOR U.S. LABORATORY-DEVELOPED TESTS, THROUGH
2019 ($ MILLIONS) 6
TABLE 1 LIFE CYCLE OF CLINICAL DIAGNOSTIC TESTS 12
TABLE 2 USES OF LABORATORY-DEVELOPED TESTS 28
TABLE 3 SEGMENTS OF THE CLINICAL DIAGNOSTIC INDUSTRY 34
TABLE 4 SUMMARY OF LABORATORY-DEVELOPED TEST MARKET SEGMENTS 37
TABLE 5 U.S. MARKET FOR LABORATORY-DEVELOPED CLINICAL ASSAYS, THROUGH
2019 ($ MILLIONS) 39
TABLE 6 U.S. MARKET FOR ANATOMIC PATHOLOGY LABORATORY-DEVELOPED TESTS,
THROUGH 2019 ($ MILLIONS) 40
TABLE 7 U.S. MARKET FOR GENOMIC LABORATORY-DEVELOPED TESTS, THROUGH
2019 ($ MILLIONS) 41
TABLE 8 U.S. MARKET FOR MASS SPECTROPHOTOMETRY LABORATORY-DEVELOPED
TESTS, THROUGH 2019 ($ MILLIONS) 42
TABLE 9 U.S. MARKET FOR SEROLOGY LABORATORY-DEVELOPED TESTS, THROUGH
2019 ($ MILLIONS) 43
TABLE 10 U.S. MARKET FOR MOLECULAR DIAGNOSTICS LABORATORY-DEVELOPED
TESTS, THROUGH 2019 ($ MILLIONS) 44
TABLE 11 U.S. MARKET FOR ANALYTE-SPECIFIC REAGENTS FOR
LABORATORY-DEVELOPED TESTS, THROUGH 2019 ($ MILLIONS) 47
TABLE 12 U.S. MARKET FOR ANALYTE-SPECIFIC REAGENTS FROM CONTRACT
MANUFACTURERS FOR LABORATORY-DEVELOPED TESTS, THROUGH 2019 ($
MILLIONS)
48
TABLE 13 U.S. MARKET FOR ANALYTE-SPECIFIC REAGENTS FROM SPECIALTY
MANUFACTURERS FOR LABORATORY-DEVELOPED TESTS, THROUGH 2019 ($
MILLIONS)
49
TABLE 14 PATENT APPLICATIONS FOR LABORATORY-DEVELOPED TESTING 66
TABLE 15 DIVISION OF LABORATORY SERVICE CENTERS FOR MEDICARE AND
MEDICAID SERVICES, LABORATORIES BY TYPE OF FACILITY (EXEMPT/NON-EXEMPT
COMBINED), CLIA UPDATE, THROUGH JUNE 2014
77

LIST OF FIGURES

SUMMARY FIGURE MARKET FOR U.S. LABORATORY-DEVELOPED TESTS, 2012-2019
($ MILLIONS) 6

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