Blog | 6/23/2025

High Value Diagnostics to the World: How to Get a WIN on the Board

By Arushi Agarwal, Donna Hochberg, PhD, Gary Gustavsen, Laura Ory, Nicholas Cadirov, PhD, and Camden Carmichael

The single site, “specialty lab” model has long been pursued in the US by companies developing novel, often proprietary, tests due to significant advantages over a distributed kit approach.

However, this model also comes with at least one critical downside – namely, it is a challenging and often protracted journey to capture test volume from outside of the US. A path to success exists, but it requires a carefully planned and well executed strategy. 

Here are three keys to success for specialty labs when planning for an international expansion WIN.

All diagnostic companies ultimately face the challenges of determining the optimal timing to plan for international expansion. Act too soon and divert critical resources to support continued growth in the “home market”; act too late and enter a potentially overcrowded, already well-served market. The latter can have particularly significant implications for a specialty lab, as the challenges with shipping samples across country borders essentially requires these companies to “replicate” their US specialty lab in multiple markets. Understanding how best to operate within the unique regulatory, reimbursement, and technology environment inherent to each country and building the appropriate capabilities will be critical to success. Furthermore, if the specialty lab chooses a commercialization path that requires developing a kitted version of its test, timelines can be even further protracted.

Given all the the factors influencing a successful ex-US launch, the simple answer for when to act is “as soon as possible.” However, doing this will require an in-depth understanding of the financial impact this expansion will have on the business.

With the need to “build from scratch” in each market, specialty labs often assume that the only viable strategy for ex-US commercialization is to develop a kitted version of its test. While this may ultimately be the right strategy, the options of pursuing a centralized (e.g., a tech transfer to a select set of labs within a country) versus decentralized (e.g., developing and distributing a kit broadly) model should both be considered. When making this decision, three key features of the test should be considered:

• Technical complexity of the test
• Anticipated test volumes
• Turnaround time requirements 

Once the optimal business model (kit versus centralized lab) is selected, a deep understanding of key clinical and market factors, by geography, will help inform the country priority order for international expansion.  Evaluation of clinical and market factors is complicated by the unique clinical utility of each test, the complexity of technologies used to perform testing, and the relatively high price per test. 

Clinical Factors Impacting Country Prioritization

The very nature of specialty lab tests means a new step or approach is being introduced into the existing clinical paradigm. This requires a change in behavior and workflows for clinicians, labs and sometimes even patients. The engagement required by test developers to drive this paradigm shift can be significant with some markets being more receptive than others; historical sentiment regarding adoption of novel diagnostic tests can often be a meaningful indicator to inform which markets are likely to be more or less receptive.

The need for labs to adopt novel and often complex technology (whether through a tech transfer or a distributed kit) may also require significant investment on the part of the test developer to ensure labs are empowered to incorporate high quality testing into their workflows. Similar to understanding clinician willingness to incorporate novel clinical insights, it is critical for specialty test developers to ensure an understanding of the history of how labs in each country incorporate new tests and technologies.

Market Factors Impacting Country Prioritization

While many would argue that garnering value-based pricing in the US is one of the most daunting aspects of commercialization, this is often a greater challenge ex-US given the significant price sensitivity and often a high evidence bar for achieving coverage. Understanding what pricing levels are acceptable is critical to determining the need for an alternative, lower cost test format. Furthermore, many ex-US markets have unique evidence requirements for achieving regulatory approval and payer coverage. Considered together, these factors will influence where it is most feasible to consider expansion in the near- vs. long-term.

Of course, another key component of prioritizing markets for geographic expansion will be an assessment of the market potential for the test. While this is an important consideration for the expansion roadmap and critical input to the business case, it can be surprising how significant the other factors above are on the ultimate success of a specialty lab test outside the US. In some cases, the market with the largest addressable patient population may not be the first priority market for expansion. 

Understanding each of these elements will help to build a view on the revenue potential and anticipated costs, ultimately informing the margin implications by geography.

The centralization vs. decentralization decision that is determined while Informing the Business Case, will have downstream implications for go-to-market strategy in each country.
If a distributed kit strategy is pursued, specialty labs need to consider the optimal partner for kit development and commercialization. In some cases this may be one global partner, and in other cases it may be appropriate to engage multiple local partners. Given the complex nature of specialty lab tests, the first consideration is finding a partner with the appropriate level of technical expertise to ensure the kit development process is successful, smooth and timely. From here, additional commercial considerations can come into play to select additional local/regional partner(s) including:

• Complexity of local regulatory and market access dynamics, and advantages conferred by engaging a local player with previous expertise and relationships
• Installed base for platform(s) needed to perform testing
• Additional support needed for distribution and ability for a partner to leverage existing customer/distributor relationships as well as a strong reputation to help drive sales

One example of a decentralized approach was Natera’s partnership with BGI to expand in China. BGI was selected due to its widespread installed base, in addition to broad commercial reach and local market access/regulatory experience.

While a tech transfer requires lower investment in test development, specialty labs need to focus on finding the right lab partners to support local testing, ideally those with

• Strong reputation and adequate reach among ordering clinicians
• Appropriate level of internal technical expertise to perform testing
• Sufficient resources (FTEs, platforms, etc.) to support additional test volume

A detailed “lab mapping” exercise can be highly beneficial to understand the local lab landscape and who the ideal partner(s) for ex-US commercialization may be.

An example of this approach is the launch of Exact Science’s (previously Genomic Health) Oncotype DX test in Germany in partnership with MVZ for Histology, Cytology, and Molecular Diagnostics Trier. This lab was selected based on its outstanding reach and reputation amongst German oncologists, as well as superior expertise in offering specialized molecular diagnostics.

The decision to launch a specialty lab test ex-US can often seem daunting, but with early and detailed planning companies can set themselves up for a 

If you’re interested in learning more on how to approach an ex-US expansion strategy for your organization, please contact us at diagnostics@healthadvances.com