Navigating the Diagnostic Commercialization Process

ABC-Logo-CopyPerryDimas2-150x150Guest Post By: Perry Dimas, Senior Vice President and General Manager for Premier Source, part of AmerisourceBergen

The 2015 Business of Personalized Medicine Summit was an inspiring day with talented professionals. One key takeaway was that while diagnostics hold the promise of getting the right medicine to the right patient at the right time, much work remains to develop a standardized system of approving and covering diagnostic tests to ensure patient access.

As an industry, diagnostics are settling into a commercialization pathway similar to medicines, but we lack some of the foundational measures that make it possible. Shepherding a diagnostic test from pre-launch to commercialization can often and accurately be described as “building the plane while we fly it.” Premier Source is fortunate to support diagnostic manufacturers through the regulatory, coding, and coverage/reimbursement challenges that are clearly defined for medicines but not these informative tests. Why are these factors uniquely challenging to diagnostic manufacturers, and what will change to open up more opportunity?

Regulatory Approval:

Most diagnostic innovators establish a Laboratory Developed Test (LDT) business model and administer tests out of their own laboratories. In the diagnostics industry, validation of the test is currently regulated by CMS’s Clinical Laboratory Improvement Amendments (CLIA).

Importantly, the FDA has proposed framework for diagnostic oversight, but the structure and timing of these regulations have not yet been finalized. It’s imperative to understand the FDA’s process when it is announced and the impact it will have on commercialization of existing and new diagnostic tests. While it will end a period of confusion for many stakeholders, there will be a period of transition before a potential streamlining occurs and tests are better enabled to reach the highest potential of offering diagnoses and guidance to providers and patients.


For most products and services offered in healthcare, such as procedures, medications, and diagnoses, a system for coding exists and is consistently used across providers and payers. For example, medications and dosages are assigned a J-code, so the payer quickly understands what it is reimbursing. Unfortunately, the same process does not exist for diagnostic testing; there is not currently a coding structure to identify what each test does. Lacking an appropriate code, many diagnostic companies use a miscellaneous CPT code. This raises red flags and makes the process for being reimbursed for a valuable healthcare tool a challenging process for the manufacturer.

An industry standard for coding would reduce questions among payers, streamline the billing process for providers and allow for overall industry tracking of use. The AMA has been working to apply more transparency and structure to diagnostic coding, but it is still a work in progress. Premier Source frequently assists manufacturers with coding hurdles to ensure they are reimbursed appropriately.

Coverage and Reimbursement:

While the industry continues to work to address the challenges presented by the lack of standardized coding, diagnostic manufacturers can take steps to see greater reimbursement success within this developing environment. Acquiring the right data to demonstrate clinical utility is especially crucial. The vast majority of the time, this data is accumulated post-launch, a key difference in the commercialization of diagnostic tests versus medications. Specifically, payers look for observational trial data, such as how a test, once ordered by a physician, impacts patient management and effects health outcomes. And, how exactly did it help?

There is a proven pathway that Premier Source has developed with payers to guide diagnostic manufacturers through this process. We help secure meetings with medical directors of governmental and commercial payers to make sure data collection is aligned with what the payer wants to receive. Proving clinical utility can help catapult diagnostic tests to widespread adoption within the payer community.

Currently in its infancy, the diagnostic space has many question marks. While admittedly no one has all of the answers, Premier Source and our many partners in the field are working to determine the best practices and options for diagnostic manufacturers to most effectively navigate the commercialization process. The conference may have ended, but the conversation needs to continue to drive the adoption of diagnostic tests as an informative and valuable component of personalized medicine.


Perry Dimas is Senior Vice President and General Manager for Premier Source, the part of AmerisourceBergen that focuses exclusively on the unique commercialization needs of novel diagnostic providers and manufacturers, particularly those whose tests advance the utilization of personalized medicine. Premier Source leads a team of experts who partner with personalized-medicine diagnostic companies, providing reimbursement consulting and contracting services as well as back-end billing services. Mr. Dimas and his team work closely with Lash Group, the leader in patient support services for the pharmaceutical industry, to maximize operational efficiency and ensure diagnostic customers access best in class technology infrastructure and solutions to support physicians and patients.

Mr. Dimas is also founder of The Diagnostic Conference, which is aimed at bringing together the principal thought leaders and executives in personalized medicine from the leading diagnostic companies and pharmaceutical manufacturers, to discuss the current challenges and subsequent opportunities for launching a successful diagnostic test in the U.S. marketplace. Prior to joining Premier Source Diagnostics, Mr. Dimas led the reimbursement efforts for Precision Therapeutics and XDx. These two diagnostic companies are considered pioneers in the laboratory developed test business model. In this business model, the molecular diagnostic is performed in a CLIA certified laboratory and the company is at financial risk for all services. He was responsible for all billing, appeals, and payer relations activities for both companies and brings a wealth of commercial knowledge of how to successfully launch a diagnostic test. Mr. Dimas has more than 15 years of commercialization and reimbursement experience with novel diagnostics.

FDA Oversight of Diagnostic Medicine – A Trap for the Unwary


Diagnostic medicine is experiencing new challenges at the USPTO and the U.S. Food and Drug Administration (FDA). Under a new FDA proposal, laboratory developed test providers, previously exempt from FDA oversight, must now consider if their diagnostic test may be subject to FDA oversight, either as a moderate risk (Class II) or high-risk (Class III) device. If so, the test provider may then need to seek FDA approval or clearance through a premarket approval application (PMA) or a 510(k) premarket notification submission. During the 510(k) process, a company asserts that its new test or device is substantially equivalent to an existing predicate device for the purpose of establishing safety and effectiveness. However, undiscerning statements of “substantial equivalence” that are not narrowly tailored to the safety and efficacy of the new device may seem inconsistent with the company’s prior statements before the USPTO regarding the patentability of the device. These apparent discrepancies can be exploited during patent litigation to undermine the enforceability or validity of the patent asserted. Thus, a test develop may inadvertently jeopardize patent assets in an attempt to secure expedient regulatory clearance for a new device. This dilemma is partly attributable to the often large lag between the patent procurement and market clearance of the device or test. Continue reading this entry

Patent Subject Matter Eligibility – Impact on Litigation and Prosecution


Personalized medicine relies on diagnostic technologies to accurately evaluate a patient’s clinical or genetic signature to guide treatment decisions. Protecting innovation by patenting the diagnostic methods and tools that inform clinical intervention and treatment has been the traditional means to protect investment in these important technologies. Recent U.S. Supreme Court decisions have challenged inventors’ ability to patent diagnostic innovations, notably the Supreme Court’s Prometheus, Myriad, and Alice decisions, by removing from the scope of patentable subject matter discoveries that broadly tie a medical marker, e.g., a biomarker or drug metabolite, to a therapeutic intervention (Prometheus), isolated products of nature such as mutated genes that are detected as individual biomarkers (Myriad) and abstract ideas that may integrate complex clinical information (Alice). Continue reading this entry

Breaking Through to Business Solutions for Personalized Medicine: A Thought-Provoking, Can’t-Miss Industry Event


Just as with patient treatments, one size does not fit all when it comes to companies involved in personalized medicine. Each is unique in its mission, culture, and capabilities, so it should come as no surprise that each demands a distinct business strategy that can evolve alongside the industry. The annual Business of Personalized Medicine Summit is centered around helping attendees build just that.

While other forums for discussing personalized medicine have, for the most part, focused on relatively specialized areas such as underlying technologies, financing, regulatory pathways, or payment issues, the Summit seamlessly integrates thought leadership and networking into a one-day, one-of-a-kind forum that addresses cross-sections of such issues with a clear eye toward helping attendees build successful, sustainable industry business models.

And because the Summit is a must for all entities who are currently engaged in personalized medicine as well as those seeking to enter the space, it provides the perfect opportunity to connect with key players in this rapidly developing field. Through fresh discussions with key opinion leaders and each other, attendees can collect insights and arrive at solutions that will drive their individual growth and performance within personalized medicine as well as impact the overall future of health care.

The 2015 Summit, co-hosted by Foley & Lardner LLP, the Personalized Medicine Coalition, AmerisourceBergen, and the California Life Sciences Association, will take place on Wednesday, October 7, at the South San Francisco Conference Center in South San Francisco, California, the birthplace of biotechnology.

Who Should Attend

  • Business, legal, and health care professionals interested in industry leaders’ real-world experience on the current state of personalized medicine and where growth and opportunity exist
  • Business, legal, and health care professionals interested in discussions regarding the regulatory framework for diagnostics and targeted therapies
  • Executives and entrepreneurs interested in hearing diverse perspectives on both the development and delivery of personalized medicine therapies
  • Payors interested in current status and future possibilities regarding reimbursement of personalized medicine technologies
  • Corporate counsel in life sciences and health care provider organizations
  • Health care professionals working in the field of personalized medicine
  • Health care and life sciences investors
  • Researchers and academic personnel
  • Non-profit organizations

Featured Topics

  • Financing & Venture Capital: How investments, partnerships, and other transactions are impacting the business of personalized medicine
  • Payment: Strategies for identifying your target market, collecting evidence, and getting paid
  • FDA/Regulatory: The FDA’s proposed oversight of LDT’s, Obama’s Precision Medicine Initiative, and what to expect in the future as a result
  • Big Pharma: A look at the industry’s involvement and investment in personalized medicine
  • Intellectual Property: High-profile cases with significant implications in the personalized medicine space both at the R&D stage and downstream
  • Big Data: Driving development through complex bioinformatics and collaborative results analysis, plus a look at cybersecurity implications
  • Disruptive Innovation: How personalized medicine is being reshaped through innovative business models, technology applications, and information management
  • Clinical Adoption: Barriers to and solutions for effective understanding, acceptance, integration, and knowledge sharing throughout the personalized medicine life cycle

Register now to hear how some of the industry’s best and brightest are tackling today’s business challenges and what they envision for the future of personalized medicine. Plus, enjoy a special closing keynote presentation with John Parise, Director & Associate General Counsel at Genentech, and Steven Kafka, PhD, President & Chief Operating Officer at Foundation Medicine, as they highlight Roche’s $1 billion majority stake in the genomic cancer diagnostics firm.

For a complete speaker roster and program agenda, visit

Questions? Email or call 303.856.7018.

Nautilus Standard Sinks Dow Patents


Dow Chemical Company (“Dow”) lost a ruling that competitor NOVA Chemical Corporation and NOVA Chemicals Inc. (collectively “NOVA”) infringed claims of two Dow patents when the Federal Circuit applied the U.S. Supreme Court’s new definiteness standard set forth in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014)(“Nautilus”). Dow Chemical Co. v. NOVA Chemicals Corp. (Fed. Cir., August 28, 2015). The court held the claims indefinite under 35 U.S.C. § 112, and reversed the trial court’s award of supplemental damages. Continue reading this entry