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Press Release

For In Vitro Diagnostic Testing Industry, Repeal a Mixed Bag

Kalorama Information
Posted on: 26 Jul 17

ROCKVILLE, Md., July 25, 2017 /PRNewswire/ -- IVD market research firm Kalorama Information notes mixed opinions on the Senate bill for ACA repeal. On one hand, the repeal of the tax is attracting bipartisan support and industry support. On the other there is some concern over the continued provision of healthcare insurance to additional customers and funding of preventative services where diagnostic testing plays a role. And Kalorama notes that despite the public focus on events there are a number of greater priorities for the industry. On there are about four other significant policy issues that diagnostic companies are interested in resolving, according to industry interviews and public statements. Kalorama Information's main report is the Worldwide Market for In Vitro Diagnostics, 10th Edition. 

"For the medical device and the in vitro diagnostics industry, which the healthcare market research covers, one of the most important policy priorities has been a complete repeal of the suspended medical device tax," said Bruce Carlson, Kalorama Information's Publisher. "On the other hand there is some concern about insurance loss and any resulting impact on testing volumes, and there is more concern than might be present in the medical device industry."

The tax as part of the ACA is unpopular broadly in the device industry. The legislation put a 2.3% excise tax on sales (not simply profits) of medical devices, except certain devices sold at retail. If the AHCA is signed into law, the medical device excise tax would not apply to sales after December 31, 2017. (The Consolidated Appropriations Act of 2016 provided a two-year moratorium on the tax that is set to expire December 31, 2017). The medical device tax repeal continues to garner bipartisan support and its inclusion in the AHCA is not expected to encounter significant opposition going forward.

A concern for IVD companies and other healthcare suppliers would be the decline of healthcare utilization in the United States as millions lose coverage with a partial repeal of the ACA. Spending on core lab systems and consumables demonstrably rose among clinical laboratories between 2013 and 2015 in anticipation of ACA implementation. Positive effects on core lab test demand or the volume of tests ordered as part of routine care and treatment episodes could dissipate or disappear if substantial numbers of Americans lose insurance. 

Testing is part of prevention, and this would be a concern for IVD companies. The fate of preventative care service provisions of the ACA, including the obligation of insurers to pay for USPSTF-recommended services without copay, is uncertain at this time. The inclusion of services has been a boon to certain in vitro diagnostic (IVD) markets and suppliers as higher patient volumes and more routine care boosted demand for select screening tests. The AHCA would maintain preventive services requirements for private plans, but would repeal the requirements for the Medicaid expansion population. Preventive services for adults are covered at state option for other Medicaid beneficiaries. States could opt to roll back coverage of preventive services for this group.

However, Kalorama notes that the needs of the IVD industry extend beyond Obamacare repeal.

"Washington and major media are focused on daily coverage of AHCA, Senate Bill, Presidential statements etc," Carlson said. "Fundamental reimbursement and regulatory issues will rate higher in the industry's view."

The industry has some other priorities that the IVD industry is closely watching:

PAMA - Beginning in 2016, PAMA requires applicable clinical labs in the United States (largely independent labs) to submit payment rates and corresponding volumes for lab tests ordered by private payers. The lab-reported test payment and volume data will be used by CMS to calculate the weighted median payment rates to be paid by Medicare for lab.  Kalorama has estimated that this will likely drive prices down as payors could adjust to the new Medicare prices, and a downward pricing spiral results.

Harmonized test results. The American Association of Clinical Chemistry notes that test measurements need to be harmonized, especially as EMR systems make patient data more accessible. "The patient's laboratory results may be from multiple testing facilities that used different measurement procedures. Comparing laboratory results from different non-harmonized measurement procedures may be confusing, which may contribute to medical errors and unnecessary ordering of repeat tests."

Lab-Developed Test regulation. There remains concern in the IVD industry over lab-developed test regulation. There is continued worry that lab developed tests are available to patients and providers as they reverse the decline in performance FDA has experienced in recent years.

Medical Device User Fees. In the 2000s The FDA engaged in a set of steps to make device review faster. FDA was given the authority to collect user fees from medical device sponsors for review activities. Under the legislation, FDA committed to meeting specific performance goals negotiated between industry and the agency related to medical device reviews. 

Kalorama Information's report, The Worldwide Market for In Vitro Diagnostics, 10th Edition, is available at

About Kalorama Information

Kalorama Information, a division of, supplies the latest in independent medical market research in diagnostics, biotech, pharmaceuticals, medical devices and healthcare; as well as a full range of custom research services. Reports can be purchased through Kalorama's website and are also available on and  

We routinely assist the media with healthcare topics. Follow us on Twitter, LinkedIn and our blog on our company website.  

Please link any media or news references to our reports or data to

Press Contact:                                                        
Bruce Carlson
212 807 2262

Editor's Details

Mike Wood

Last updated on: 26/07/2017

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