From pandemic urgency to real-world impact: How diagnostics investment priorities are evolving

When the Covid-19 pandemic hit, molecular and rapid diagnostics received unprecedented attention and funding. The most important thing for adoption back then was speed, and speed is still important, but the industry has shifted. It is not enough to be scientifically reasonable. Nowadays, practicality is paramount. This is a top priority that anyone involved in investing in and developing diagnostic technologies must understand in order to be successful because, as research shows, there is an increasing preference for diagnostic technologies that are ready for clinical deployment as early as possible.

Practicality trumps novelty

In the past, scientific breakthroughs might have been enough to secure funding. For now, investors and hospital administrators are hoping lab tests show more than speculative promise. They want technology to be integrated smoothly and immediately into every aspect of their operations. There are no regulatory issues. No need to overtrain or retrain. There will be no disruption to the way medical records are kept. Bottom line: No time or money wasted, easier to get funded and adopted. The bottom line is that any testing needs to be done at a clinical level, where clinicians can get accurate information and patients can be helped and become healthier.

It is these diagnostic approaches designed for early clinical deployment, often referred to as “clinical-first” approaches, that are arousing growing interest. But this is the challenge for startups. They may have a test backed by strong science — and strong science is still important — but they need to have the evidence that investors and clinical partners are demanding that the diagnosis has a meaningful impact on care decisions. Having sufficient clinical evidence, essentially real-world validation early in the process, can provide data that resonates with clinicians and payers even before large trials are completed.

Focus on economics and access

Another important consideration for startups is to focus on the health economics of the technology, particularly reimbursement pathways. Diagnostic designs without a clear strategy often struggle to gain traction, regardless of their clinical promise. Whether a fee-for-service or value-based model, a reimbursement structure that encourages staff engagement and reduces administrative complexity will strongly influence which tests are used and how clinicians allocate time and resources.

Equally attractive and considered practical is the idea that testing is decentralized. Results are closer to the patient and received faster. Decisions can be made faster, and while costs can be reduced, an equally important benefit is increased access to care, especially in underserved areas.

Another way to increase efficiency and access is to be able to provide multiple readings from a single test sample. Proteomic approaches, the large-scale study of proteins in an organism or cell, are of particular interest for their potential to complement genomic data in the assessment of complex diseases, where protein-level information can better reflect real-time physiology.

Capitalize on the elephant in the room

The question always faced with any new technology is how to best utilize artificial intelligence, and it certainly has a role to play. The focus is no longer on applying it to unvalidated tests, but towards using artificial intelligence to enhance existing diagnostics. Emerging applications include improving interpretation accuracy, increasing throughput, and streamlining workflow. The most direct value of artificial intelligence is to enhance, rather than replace, clinically proven detection methods.

Large amounts of information need to be processed in a constantly changing environment. This last lesson helps keep things under control. Break down development into smaller phases related to three main hallmarks: validation, pilot deployment, and scale. Nothing guarantees success, but taking these incremental steps can minimize investment risk and help encourage investment.

Photo: Andriy Onufriyenko, Getty Images

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