HEALTHCARE: Congress debates Medicare funding for complex tests By Vita Reed
Orange County Business Journal Staff
Beckman Coulter Inc. is looking to bring advanced genetic testing to everyday laboratories as a way to boost its business.
The Fullerton-based company, which makes instruments and supplies for labs running tests for doctors and medical researchers, is working on a machine to bring advanced genetic testing—known as molecular diagnostics—to more labs.
“Molecular diagnostics is already a good-sized market” with $2 billion in sales annually, Beckman Chief Executive Scott Garrett said.
Beckman is developing a machine that would take genetic analysis, which is used to determine things such as if a patient is predisposed to cancer, out of expensive scientist-led labs and put it into general clinical labs.
The effort comes as Congress is in talks over extending Medicare funding to cover some genetic testing. Even if the federal funding doesn’t come through, a new molecular diagnostics machine could bring business for Beckman.
The company counts yearly sales of $2.7 billion, most from hospital and independent labs running routine tests for doctors.
Garrett and other Beckman officials talked up plans for a broad-based molecular diagnostic machine at the company’s annual business review last month.
Beckman is developing a product that is easy to use and doesn’t take up much space in a lab, Garrett said.
The company is working on a new analyzer machine, the DxN, set to come out in 2010. The analyzer is expected to initially test for sexually transmitted diseases, infectious diseases and compromised immunity, such as HIV viral load. It also will help rush results on things like spinal fluid analysis, according to Garrett.
“We may have more, (but) we won’t have less (tests),” Garrett said.
Additional tests could address other infectious diseases and genomics—the study of the human gene pattern.
Beckman should roll out a prototype of the testing program by year’s end, he said.
Company watchers have been waiting to see if Beckman develops a simple diagnostic machine that runs a variety of tests that are “meaningful to the routine hospital market,” said Jeffrey Frelick, an analyst with Lazard Capital Markets, in a recent research report.
Garrett doesn’t expect molecular testing to overtake its leading immunoassay test, or the use of chemicals to test for a concentration of a substance in urine or blood. Those are the type of routine tests done by labs, hospitals and other healthcare providers.
But molecular tests could catapult Beckman to “a whole new level,” Garrett said.
Beckman’s molecular diagnostic push comes around at a time when Congress is considering legislation that would bring in a new payment system for diagnostic testing.
The proposed Medicare Advanced Laboratory Diagnostics Act of 2007 would start a trial of a new Medicare payment system for some genetic testing. Versions of the bill are in both the House of Representatives and the Senate.
Beckman wouldn’t get more direct revenue from any Medicare funding expansion, but higher payments could spur hospitals and commercial laboratory operators to step up buying Beckman’s machines and supplies.
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