Blog | 5/9/2025

Innovation is Not Enough!! Why Market Access is the New MVP for Diagnostics

By Donna Hochberg, PhD, Chris Karras, Peter Origenes, Martha O’Neill, Ivan Hristov, Alfonso Barrios, PhD, Jenna Harding, PhD, Shun Hang Chan, PhD

Unlike in therapeutics, historically, the clinical diagnostics industry didn’t pay much attention to market access. Not even twenty years ago, the largest players in the industry may not even have known what CPT codes were used by labs to capture reimbursement from payers. Early point-of-care (POC) tests, for example, missed the mark by not securing differential reimbursement rates based on the value a rapid result can provide. As a result, many of these tests share the same codes and reimbursement rates as lab-based tests.

Fast forward to today, we see the benefits a robust market access strategy can provide demonstrated by high-value, specialty lab diagnostics and complex tests such as Oncotype DX®. While there have been improvements in applying the principles of market access to more traditional lab and POC diagnostics, we still have a long way to go. This gap is becoming increasingly problematic in a post-pandemic world where payers are increasingly scrutinizing diagnostics and competition is intensifying.

Market access is no longer optional but essential, even for the most basic diagnostic products; the evolving macro environment demands evidence-based proof to capture value. You could say that for diagnostics, market access is now not just the most valuable player but a core part of the minimum viable product.

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Here, we explore the recent market events and trends that have and are heightening the importance of market access to commercial success for new diagnostics of all types.

The last decade has seen numerous advances in our technical capability to perform testing. This trend is only accelerating:

Workflow enhancements: automation of broadly and for mass spec and next generation sequencing (NGS); miniaturization to enable point of need testing
New capabilities: multiplexing, high sensitivity detection
Digital and software tools: image analysis, algorithmic assays, other AI

As technology sophistication and complexity grows, fitting novel tests into existing coding and coverage frameworks becomes challenging. More importantly, the value of these advances is lost without OEM advocacy and data to prove their worth.

The payer landscape is changing rapidly, with non-traditional payers gaining influence:

Patients as Direct Payers: With the rise of direct-to-consumer (DTC) testing and high-deductible health plans (HDHPs), patients increasingly cover diagnostic costs.¹
Health System Formation: Integrated delivery networks (IDNs) and health system formation, in the US and beyond, is concentrating decision-making power with fewer, more influential stakeholders.²
Alternative Payment Models: Continued shifts to value based payment models and capitation under global budgets is putting more decision making in the hands of labs and or health systems versus traditional payers.³

Each of these stakeholder groups and non-traditional payers comes to the table from a different perspective. Planning ahead to address these different perspectives is now even more critical to success.

During the pandemic, payers were forced to pay for a significant uptick in testing. At the time, everyone was touting the value diagnostics brought to pandemic management but now we have gone in the opposite direction with controls on diagnostics at the rate and coverage levels alike seen as low hanging fruit for controlling the cost of care.

US Reimbursement Cuts: On the clinical pathology side, PAMA (Protecting Access to Medicare Act) remains a threat with the current stay on implementation of the next round of cuts set to expire at the end of 2025. Many tests would be subject to as much as 15% rate cuts. While not as drastic, the physician fees schedule from Medicare for pathologist review of cases saw a 2.9% cut from 2024 into 2025.^4-5
International Rate Pressure: Across Europe, budget cuts aimed at controlling healthcare spending often target diagnostic testing as a cost-saving measure. For example, Germany made across the board cuts (as part of an overall healthcare reform bill) to rates for more than 500 diagnostic tests with an average cut of 9% but with some tests (e.g., lactate an important part of sepsis management) seeing a >70% hit.⁶
Coverage policies are tightening, and diagnostics are easier targets for payers compared to pharmaceuticals or medical devices. Payers have increasingly scrutinized the clinical utility of tests, using reimbursement policies as a lever to limit perceived overuse. A more fragmented reimbursement infrastructure (i.e., billing and coding) and higher potential for overuse compared to pharmaceuticals and devices has led to increased coverage pressures. Syndromic panels, for example, have been at the forefront of payer scrutiny, with some notable coverage decisions:
- Various large payers (e.g., BlueCross BlueShield, United HealthCare, Aetna, etc.) have limited respiratory panel reimbursement for up to 5 pathogens, making broad panels of 6 or more not covered.^7-9
- Medicare, via the MolDx program, has institutionalized similar restrictions to limit coverage of syndromic panels to 5 or fewer pathogens.¹⁰

How do we fight the continued treatment of diagnostics as the ugly step child to therapeutics?

Optimal market access (and supporting advocacy organizations such as AdvaMedDx)!

At the same time as reimbursement coverage and rates are becoming more restrictive, labs and OEMs are facing challenges on the cost side of the equation.

Tariffs are/have the potential to drive up the cost of parts and finished products with long times to standing up new manufacturing capabilities.
Increasingly complex technologies can be require heaver investment to produce.
The cost of labor is higher and skilled labor hard to find. US core laboratory staff vacancy rates increased from ~7% to ~15%+ from 2016 to 2022, a trend that is expected to continue in the near-future, increasing labor costs for labs and tightening margins.¹¹

In this context, the value of leveraging a strong market access plan becomes more critical to actually obtaining an favorable ROI.

In part due to where diagnostic innovation has been focused and in part due to the shift to fewer customers with more buying power, competition to win business has intensified across most segments of the industry. Just a few examples include:

Sepsis diagnosis: After a long history of failures, four breakthrough tests in sepsis related diagnostics (Inflammatix, Cytovale, SeptiCyte, and MeMed) are all vying for share in a “new” space.
Primary Care POC: In POC, multiple players (Vital Bio, Genalyte, Truvian, etc) are pursuing the primary care physician office lab with broad multidisciplinary testing platforms; while each has a slightly different spin they are all progressing at the same time.
Core Lab: In traditional lab testing disciplines, labs are seeking standardization and centralization solutions leading to bigger purchases under the same tender or purchasing process.

An optimal market access strategy is a critical part of the arsenal for driving differentiation.

Conclusion

Rather than seeing reimbursement cuts and tightening coverage policies as insurmountable obstacles, diagnostic companies should see market access as a core part of commercial strategy and an opportunity to achieve a higher ROI due to a value based price.

We know from older examples that market access really is the MVP!

The good news – evidence that the diagnostics community is recognizing the increasing importance of market access is readily apparent in our business. Increasingly, many larger Dx firms are seeking not only product-specific strategies but also advise on broader tactics to optimize market access and medical affairs organizational structure(s) and guidance to develop decision making frameworks to ensure the optimal market access investment is made with each new product introduction. Similarly, smaller diagnostics companies are starting to ask earlier about market access. Still there is room to improve across the industry in terms of recognizing the importance of market access strategy to success and the criticality of planning ahead.

Stay tuned for our next blog in this series where we’ll dive into best practices in market access for diagnostics.

If you’re interested in learning more on how to progress a market access strategy for your product(s) or organization, please contact us at diagnostics@healthadvances.com.

Innovation is Not Enough!! Why Market Access is the New MVP for Diagnostics

Conclusion

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