HHS Folds Cards After Judge Vacates Regulation "AGAINST" Web-Tracking Visitor Behavior

 Example of a judge in Texas VACATING an HHS regulation that "over reaches."

https://www.fiercehealthcare.com/regulatory/hhs-reverses-course-will-no-longer-appeal-federal-courts-hospital-web-tracker-decision

The white flag came 10 days after the administration had filed its appeal to the Fifth Circuit.

The case had been brought in late 2023 by the American Hospital Association (AHA) the Texas Hospital Association, Texas Health Resources and United Regional Health Care System, which had argued that HHS’ Office for Civil Rights (OCR) overstepped its authority with guidance it had issued in 2022.

That bulletin warned providers that online trackers to monitor user traffic and behavior, such as the Meta Pixel or Google Analytics, could be at odds with the Health Insurance Portability and Accountability Act (HIPAA). Such tools are widely employed by hospitals, triggering a spate of class-action lawsuits and settlements.

The lawsuit, which enjoyed the support of numerous state hospital groups and individual health systems, argued that the trackers are a key tool for providers tailoring their service offerings to meet the needs of their communities. The hospitals also argued that HHS had exceeded its statutory authority by expanding HIPAA’s definition for its bulletin and noted that many of the government’s own healthcare websites actively use the tools HHS OCR was restricting.

Despite a March adjustment to the bulletin, Judge Mark Pittman of the U.S. District Court for the Northern District of Texas vacated the guidance. He wrote in the ruling that the department’s bulletin “was promulgated in clear excess of HHS's authority under HIPAA."

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CHAT GPT 4o

The case "American Hospital Association, et al. v. Xavier Becerra, et al." before the United States District Court for the Northern District of Texas, Fort Worth Division, involves the American Hospital Association (AHA) and other plaintiffs challenging the Department of Health and Human Services (HHS) over its interpretation and enforcement of the Health Insurance Portability and Accountability Act (HIPAA) in the context of online tracking technologies.

Background

The case centers on the application of HIPAA’s Privacy Rule, particularly concerning “individually identifiable health information” (IIHI). HHS issued guidance documents, first in December 2022 (the “Original Bulletin”) and then a revised version (the “Revised Bulletin”), which attempted to address privacy concerns related to the use of online tracking technologies by healthcare providers. The Bulletins posited that the combination of a user’s IP address with visits to health-related webpages could constitute IIHI, thereby invoking HIPAA protections.

The plaintiffs, which include two hospital associations and a regional healthcare system, argue that the Bulletins impose new substantive obligations not supported by HIPAA's statutory framework. They contend that HHS overstepped its authority by expanding the definition of IIHI without going through the proper rulemaking processes, thereby violating the Administrative Procedure Act (APA).

Legal Arguments and Ruling

The court ruled in favor of the plaintiffs on several key points:

1. Jurisdiction: The court determined it had jurisdiction over the case, rejecting HHS’s argument that the Bulletins were not a “final agency action” and therefore not subject to judicial review. The court found that the Revised Bulletin represented the consummation of HHS’s decision-making process and imposed new legal obligations on covered entities, making it a final agency action.

2. Substantive Overreach: The court found that the Bulletins improperly expanded the definition of IIHI beyond what HIPAA’s statutory language permits. The Revised Bulletin’s attempt to include online tracking data (the “Proscribed Combination”) as IIHI was seen as an overreach because it imposed new obligations not grounded in the statutory text of HIPAA.

3. Legal Consequences: The court concluded that the Revised Bulletin created new legal obligations by prescribing specific conduct to ensure compliance with the Privacy Rule, effectively making the guidance document enforceable as law. The court rejected HHS’s argument that the Revised Bulletin was merely a policy statement without binding legal force.

Conclusion

The court granted summary judgment in part to the plaintiffs, finding that HHS had exceeded its statutory authority under HIPAA by attempting to regulate online tracking technologies through guidance documents without going through the proper rulemaking process. This case underscores the sensitivity of Texas federal courts to perceived agency overreach and their willingness to curtail what they see as executive agencies exceeding their statutory bounds.

This ruling is particularly significant in the broader context of administrative law and health policy, as it reaffirms the limits of agency authority in interpreting and enforcing complex regulatory frameworks like HIPAA. It also highlights the ongoing tension between federal agencies and the courts regarding the proper scope of regulatory power, especially in a jurisdiction like Texas, known for its skepticism of federal overreach.

##

The judge makes a reference to the Bible, specifically the Book of Luke, in a whimsical manner to emphasize a point. In discussing the expansive reach of the federal bureaucracy and the potential consequences of allowing agencies to overstep their authority, the judge alludes to Luke 19:26, which says, "to everyone who has, more will be given, but from the one who has not, even what he has will be taken away."

This citation is used to underline the idea that once an agency like HHS begins to expand its authority beyond its statutory limits, it tends to accumulate more power, often at the expense of the freedoms or rights initially protected by the law. The judge uses this biblical reference to critique the tendency of federal agencies to self-perpetuate and expand their influence, which is a central theme in his argument against the overreach of HHS in this case.

##

Towards the end of the opinion, the judge broadens the scope of the case beyond just the specific issues surrounding HIPAA. He characterizes the case as being fundamentally about the limits of agency power and the broader implications of unchecked executive authority.

This rhetorical flourish serves to highlight the judge's perspective that this case is not merely a legal dispute over the technicalities of HIPAA, but rather a part of a larger narrative concerning the role of federal agencies and the importance of maintaining a balance of power. By framing it this way, the judge is emphasizing the potential dangers of allowing agencies to interpret and enforce laws in ways that may extend beyond the authority granted to them by Congress.

The comment can be seen as somewhat gratuitous because it steps away from the specifics of the case to make a broader philosophical point about the nature of government power. It reflects the judge's concern with the potential for agency overreach to undermine the principles of limited government and the rule of law, making a case that this decision has implications beyond the immediate legal context.

This closing remark underscores the judge's view that cases like this are critical in preserving the constitutional boundaries of agency authority, ensuring that executive agencies do not exceed the powers delegated to them by Congress. It's a way of stressing the significance of the ruling in the broader context of American governance and legal principles.

Arenas-Gallo and the MolDx Transthyretin policy and Race.

 A July 2024 article in NEJM (Arenas-Gallo) questions use of race-based concepts in medicine.

What might they say about the inclusion of "African-American descent" as a Medicare policy?

##

Camilo Arenas-Gallo and his co-authors argue against the use of race as a biologic category in clinical decision-making, emphasizing that race is a social construct rather than a scientifically valid basis for clinical algorithms. They express concerns that race-based recommendations in medical guidelines could perpetuate health disparities, reinforce unconscious biases, and obscure the impact of socioeconomic factors that more accurately explain differences in health outcomes.

Given these views, Arenas-Gallo might be critical of the MolDx policy's use of African American descent as a criterion for coverage in the context of molecular diagnostics for hereditary transthyretin amyloidosis (hATTR). The inclusion of race as a factor in the policy could be seen as problematic for several reasons:

1. Biologic Determinism vs. Social Construct: Arenas-Gallo would likely question the scientific validity of using "African American descent" as a criterion, given that race does not have a clear biologic basis. He might argue that this approach risks attributing genetic or disease predispositions to race, when in reality, these should be understood through a combination of genetic, environmental, and socioeconomic factors.

2. Potential for Reinforcing Bias: The policy’s focus on race could unintentionally reinforce biases among healthcare providers, leading them to make assumptions about patients based on racial categories rather than individualized assessments. Arenas-Gallo might argue that this could exacerbate existing health disparities rather than addressing them.

3. Neglect of Socioeconomic Determinants: By focusing on race, the policy might overlook more significant determinants of health outcomes, such as access to care, education, and income levels. Arenas-Gallo and his co-authors suggest that socioeconomic factors often have a more substantial influence on health disparities than race itself.

4. Inconsistency and Confusion: The use of race as a criterion could lead to inconsistencies and confusion, both for patients and healthcare providers. Arenas-Gallo would likely advocate for more universal and unbiased criteria that do not rely on race, thereby reducing ambiguity and ensuring that all patients receive equitable care based on scientifically sound factors.

In summary, Arenas-Gallo might argue that the MolDx policy should reconsider the use of race as a criterion and instead focus on more precise, non-racial factors that influence health outcomes. He would likely advocate for an approach that emphasizes individual patient characteristics and broader social determinants of health, rather than relying on race as a proxy for risk.

##

But if a gene is more common in "African American" populations and therefore in guidelines, is that difference in gene frequency really an economic side effect?  Seems unlikely. 

##

You're right to point out that if a particular gene or genetic variant is more prevalent in a specific population, such as African Americans, this difference isn't simply an economic side effect but rather a matter of genetic epidemiology. When a gene is more common in a certain population, this can have significant implications for disease prevalence and, consequently, for clinical guidelines.

Distinction Between Genetic Differences and Race as a Social Construct

Arenas-Gallo and his co-authors would likely acknowledge that genetic differences can indeed exist between populations, which might explain why certain diseases or conditions are more prevalent in specific groups. However, they would also emphasize the importance of not conflating these genetic differences with the concept of race, which is often used as a social and not a strictly biological construct.

The Role of Genetic Epidemiology

• Gene Frequency: If a genetic variant associated with a condition like hereditary transthyretin amyloidosis (hATTR) is more common in African American populations, it makes sense from a medical perspective to consider this in screening and diagnostic guidelines. The frequency of such variants in a population can justify targeted genetic testing strategies.

• Population-Specific Guidelines: The challenge, as Arenas-Gallo might see it, is to develop guidelines that recognize these genetic realities without reinforcing the idea that race itself is a biologic determinant. This requires careful language and a focus on genetic risk rather than race per se.

Balancing Precision and Equity

Arenas-Gallo might argue for a more nuanced approach that separates genetic risk factors from racial categories. This could involve:

• Clarifying the Language: Instead of using "African American" as a shorthand, guidelines could specify that certain genetic variants are more common in people of West African ancestry, for example. This would make it clear that the focus is on genetics, not race.

• Genetic Testing Based on Risk: Guidelines could recommend genetic testing based on known risk factors, including ancestry, rather than broadly applying racial categories. This approach would ensure that individuals at higher genetic risk are identified and treated appropriately, without implying that all members of a racial group share the same risk.

Arenas-Gallo's Likely Perspective

Arenas-Gallo might still be cautious about the use of race in guidelines, even if it's justified by genetic differences, because of the risk of reinforcing stereotypes or overlooking the social determinants of health. He would likely advocate for guidelines that are precise, focusing on genetic risks specific to certain ancestries or populations, while avoiding the pitfalls of race-based medicine. This could involve a shift towards more personalized approaches in medicine, where genetic testing and ancestry information are used to tailor care, rather than relying on broad racial categories.

MolDx TA's and Retroactive Coverage

We hear about MolDx tech assessments and retroactive coverage; here is an example.

Publicly-held Personalis released its 2Q (June 30, 2024) financials as an SEC 10-Q on about August 7, 2024.

They remark,

In January 2024, we announced that we received a final Medicare coverage determination for our NeXT Dx offering, extended retroactively to August 29, 2023. While we estimate that approximately half of new solid tumor cancer cases will be diagnosed in patients covered by Medicare...

https://investors.personalis.com/static-files/1b727c36-7351-4f6f-ab2b-d3a252287e54

Decibio Webinar: Chat GPT Confuses The Main Points

 See main blog about the webinar.

I asked Chat GPT for 8 takeaways "in a verbose and confusing style."

• The ongoing deliberation between centralized and decentralized NGS labs presents a multifaceted conundrum, with a myriad of intertwined factors, including but not limited to, operational scalability, cost efficiencies, and the intricate balancing act required to manage the dynamic regulatory landscape, which perpetuates an environment of uncertainty and complexity.
• Within the context of oncological diagnostics, liquid biopsy, despite its relatively nascent adoption in decentralized settings, is emerging as a potentially pivotal tool in scenarios where tissue availability is insufficient or altogether absent, though its implementation is fraught with logistical and technological challenges that could impede its broader application.
• The intersection of clinical utility and reimbursement policy, particularly concerning MRD testing, remains a labyrinthine domain, wherein the requirements for proving validity and securing coverage are daunting, leaving decentralized labs at a significant disadvantage relative to their centralized counterparts, who continue to dominate this evolving landscape.
• The proliferation of multi-omics, which integrates genomic, proteomic, and other biological data streams, represents a double-edged sword; on one hand, it holds the promise of unparalleled insights into tumor biology, while on the other, it exacerbates the already overwhelming complexity facing labs attempting to integrate these data into actionable clinical workflows.
• The economic realities facing decentralized labs are stark, as the initial capital investment, ongoing operational costs, and the requisite expertise create formidable barriers to entry, which may ultimately preclude smaller institutions from fully participating in the NGS revolution, thereby reinforcing the dominance of centralized testing facilities.
• Universal germline testing, as advocated by recent guidelines, offers a tantalizing glimpse into a future where early detection and prevention of genetically-driven cancers could become the norm, though its integration into clinical practice remains hampered by the current shortage of genetic counselors and the logistical difficulties inherent in expanding access to these critical services.
• The technological advancements in NGS, including but not limited to reductions in sequencing costs, have paradoxically created both opportunities and challenges, as the push towards decentralization is met with the harsh realities of maintaining high-quality, reproducible results in a landscape that still lacks comprehensive standardization across platforms.
• Ultimately, the trajectory of NGS adoption, whether favoring centralized or decentralized models, appears to be contingent upon a confluence of factors that are still in flux, leaving the industry in a state of anticipatory equilibrium, where the balance could tip in multiple directions depending on future developments in technology, policy, and market dynamics.

I also asked for a review in the style of Lewis Black:

Imagine Lewis Black at the podium, gesturing wildly as he dives into his take on the webinar:

"Oh, let me tell you about this freakin' webinar. It was like watching a bunch of brilliant people try to solve a Rubik's Cube in the dark, with their hands tied behind their backs, and maybe a fire burning in the corner—because, why not? You’ve got these experts—top of their field, mind you—arguing about whether we should keep all our fancy gene-testing toys in one big, shiny lab, or scatter them around like confetti at a bad wedding! And let me tell you, no one—no one—could agree on a damn thing!

They start off with this debate: ‘Centralized labs are the future!’ ‘No, decentralized labs will save the day!’ Well, guess what? Turns out, no one knows! You’d think with all the brainpower in that virtual room, someone would have a clue, but no—it’s all just a big, messy pile of 'it depends.'

And don’t even get me started on the reimbursement talk. These folks are going on about how hard it is to get paid for these tests, like that’s a new problem. Welcome to healthcare, folks! It’s been a bureaucratic hellscape since forever! But somehow, they manage to make it sound even more complicated, like trying to decipher hieroglyphics with a hangover.

Then, they threw in some techno-jargon about multi-omics—because what this already convoluted discussion needed was more layers of complexity. Let’s just take a simple idea, add some proteomics, sprinkle in some epigenetics, and BAM! Now no one knows what the hell is going on!

But the cherry on top? They end the whole thing with a big, fat, shrug. ‘The future might be centralized... or decentralized... or both... or neither!’ Thanks, folks, that really clears things up! So, in the end, what did we learn? Absolutely nothing definitive—just that the future of genomics is a giant, spinning question mark, and we’re all just along for the ride. And let me tell you, I can’t wait to see where this train wreck ends up!"

The 8 Takeaway Bullets in French

Here are the bullets translated into French:

1. Les laboratoires centralisés excellent dans les tests complexes et les économies d'échelle.
2. Les laboratoires décentralisés offrent des résultats plus rapides, améliorant l'accès aux soins des patients.
3. Les défis réglementaires et les coûts entravent l'adoption du NGS décentralisé.
4. Le remboursement pour les tests MRD décentralisés reste incertain et complexe.
5. La biopsie liquide comble les lacunes lorsque les échantillons de tissus sont insuffisants.
6. Les tests germinaux universels pourraient améliorer la détection précoce et la prévention.
7. Le multi-omics élargit les connaissances biologiques mais ajoute de la complexité.
8. L'avenir combinera probablement les modèles NGS centralisés et décentralisés.

or,,,

• Zentrale Labore sind hervorragend in komplexen Tests und Skaleneffekten.
• Dezentrale Labore bieten schnellere Ergebnisse und verbessern den Zugang zur Patientenversorgung.
• Regulatorische und Kostenschwierigkeiten behindern die Einführung dezentraler NGS.
• Die Erstattung für dezentrale MRD-Tests bleibt unsicher und komplex.
• Flüssigbiopsien füllen Lücken, wenn Gewebeproben unzureichend sind.
• Universelle Keimbahntests könnten die Früherkennung und Prävention verbessern.
• Multi-Omics erweitert die biologischen Erkenntnisse, erhöht aber die Komplexität.
• Die Zukunft wird wahrscheinlich zentrale und dezentrale NGS-Modelle kombinieren.

And finally, as Haiku

  Costs and rules entwine,
  Sequencers hum near and far,
  Future undefined.

DECIBIO Speakers on Future of NGS (8/2024)

 Topic

The Future of Clinical Oncology Next Generation Sequencing: Decentralized vs. Centralized

Description

Explore the latest findings from the NGS DxBook regarding decentralization trends and gain insights from industry leaders as we discuss the impact of decentralization and centralization on the future of clinical oncology. What to Expect: • Presentation: Key findings on market structures in NGS. • Panel Discussion: Insights from top experts in the industry • Q&A Session: Your chance to ask questions and engage with the panel. Moderator Rishi Kayathi, DeciBio Stephane Budel, DeciBio Panelists

George Daneker Jr. MD Chief Clinical Officer, GM of Oncology at Myriad Vik Vaz Head of Strategy, Market Intelligence at Illumina David Westenberg Managing Director, Equity Research at Piper Sandler Amber Leigh Amber Leigh Consulting Jerome Madison Vice President of Product Management at Labcorp Shawn Levy Chief Science Officer at Element Biosciences Don’t miss out on this opportunity to stay ahead in the evolving world of clinical oncology NGS! Learn more about DeciBio's DxBooks here: https://www.decibio.com/product/dxbooks

Duration

01:06:00

PFS Comment - Integral To

CMS response:

https://www.discoveriesinhealthpolicy.com/2024/11/cms-releases-final-pfs-and-opps-rules.html

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MY COMMENT TO CMS

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Digital Mental Health Treatment Devices (DMHT Devices)

First, I support the proposed Medicare policy for DMHT.  

Second, these may be difficult to price as an average price.  Just as Part B drugs have two payment parts - such as a CPT code for infusion and a HCPCS code for the drug - the "average price" or "typical price" RUC/CMS methodology may be difficult here.

Third, CMS should acknowledge this is a step forward in policy to refer to items as "incident to or integral to" - we have long paid for items that are incident to or integral to.  In fact, the payment concept was formerly "incident to."  Even in this proposed rule, one section refers to "incident to or integral to" while another requires the service to be "incident to."   Historically, numerous items considered "integral to" a physician service were not payable because they were not "incident to."  Witness the line item of statute that makes take-home allergen injections a benefit category. This would have been unnecessary if they were payable as "integral to" like take-home software now is.   While I support the expansion of policy from "incident to" to "integral to," CMS may find it is harder to define the outer borders of "integral to" relative to the definition of "incident to" (e.g. a cancer drug administered while the physician is somewhere in the office suite is "incident to.")

Comment Tracking Number: m06-03ix-0u0w

Chat GPT: Connecting Organizational Psychology and Decision-Making with Clinical Psychology

 what is known about Prof James Westaby of Columbia University? He is an academic psychologist.

ChatGPT said:

Westaby has developed several theoretical models and frameworks to explain how people make decisions and how their social environments influence their behavior. His work is interdisciplinary, drawing on psychology, sociology, and organizational behavior to provide insights into human motivation and behavior in various contexts, including the workplace, education, and personal life.

At Teachers College, Columbia University, Westaby teaches courses and mentors students in these areas, contributing to the academic community through both research and education.

If you're looking for more specific information about his publications or ongoing research projects, I could help you find that as well/  

You said:

What would be some connections or tangents between his work and clinical psychology?

ChatGPT said:

1. Behavioral Change and Therapy:

   • Clinical psychology often involves helping clients change maladaptive behaviors and develop healthier coping strategies. Westaby's research on goal achievement and motivation can inform therapeutic approaches that aim to enhance clients' motivation and commitment to change. Techniques from his work could be applied in Cognitive Behavioral Therapy (CBT) or other therapeutic modalities to help clients set and achieve personal goals.

2. Social Networks and Mental Health:

   • Westaby's exploration of social networks could be relevant to understanding the social dynamics that influence mental health. Clinical psychologists might use insights from his work to assess how a client's social environment, including their relationships and support networks, impacts their mental well-being. This understanding can be crucial in designing interventions that address social factors contributing to mental health issues.

3. Decision-Making Processes:

   • Decision-making is a critical aspect of clinical psychology, particularly in understanding how clients make choices related to their mental health and treatment options. Westaby's research on decision-making processes and how they are influenced by social and environmental factors could be applied in clinical settings to better understand clients' decisions and to guide them toward healthier choices.

4. Motivation in Treatment Adherence:

   • One challenge in clinical psychology is ensuring that clients adhere to treatment plans, whether it's taking medication, attending therapy sessions, or engaging in prescribed activities. Westaby's work on motivation could help clinical psychologists develop strategies to enhance clients' intrinsic and extrinsic motivation to follow through with their treatment plans.

5. Organizational Psychology and Clinical Settings:

   • Westaby's research also touches on organizational behavior, which can be relevant in clinical settings, particularly in the management and structure of mental health services. Understanding how organizational factors affect staff motivation and client outcomes could help improve the efficiency and effectiveness of clinical practices.

6. Interdisciplinary Approaches:

   • Both clinical psychology and Westaby's areas of research benefit from interdisciplinary approaches. Integrating concepts from social psychology, organizational behavior, and clinical psychology could lead to more comprehensive treatment models that address both individual and systemic factors influencing mental health.

These connections suggest that Westaby's work could provide valuable insights into various aspects of clinical psychology, from understanding and improving client motivation and decision-making to considering the broader social and organizational contexts in which therapy takes place.

8-8-2024 Guardant Auto Transcript (OTTER) filtered through CHAT GPT 4o

 From Guardant's August 7 2024 call, an auto transcript (OTTER) was given to CHAT GPT 4o for cleanup.

For the most accurate text, seek a verified human transcription of the call.

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AI - NOT VALIDATED

##

I'd like to acknowledge and thank the FDA and their review team for their collaboration and partnership. With that, I will now turn the call over to Amir Ali for an update on therapy selection and MRD. Thanks.

Amir Ali:

Turning to slide 11, while we are excited for the next chapter in screening, we continue to make excellent progress with our oncology business. We have a robust suite of precision oncology products addressing both late and early-stage cancers, as well as recurrence monitoring for cancer survivors.

Now, I'd like to share a story highlighting the value our liquid biopsy tests bring to late-stage cancer patients. In 2023, a 33-year-old woman went to her doctor after noticing a progressive neck mass during her third pregnancy. She initially received a CGP tissue test to diagnose the cause of the mass, but the test did not identify any actionable biomarkers. The patient then received a Garden 360 liquid biopsy test, which identified her as ALK-positive, leading to a diagnosis of thyroid carcinoma. As a result, the patient was put on Alecensa for therapy. I'm pleased to report that after about a year of treatment, the patient no longer shows evidence of disease. She also successfully gave birth to her third child, and since there are minimal side effects to the therapy, she will remain on Alecensa for another year with a Garden 360 test every three months to monitor.

This is just one of many patient stories that highlight the superior ability of Garden 360 to identify actionable biomarkers and inform cancer care over other approaches.

Top Line Performance (Slide 12):

In slide 12, we had a robust second quarter with total revenue growing 29% to $177 million. This growth was driven by another quarter of very strong precision oncology revenue, which increased 33%, supported by significant Garden 360 reimbursement tailwinds and strong growth in volumes, particularly within biopharma.

Clinical Test Volume (Slide 13):

Clinical test volume for the second quarter grew 14% year-over-year, reaching 49,400 tests, with continued progress in Garden 360 volumes. Reveal also continued to grow strongly, even with our ongoing management of volumes ahead of broader reimbursement. Biopharma volumes were exceptionally strong in the second quarter, growing 56% year-over-year to a record 10,475 tests. We continue to see a lot of excitement for Garden Infinity, our newest biopharma offering, powered by our smart liquid biopsy platform.

Major Upgrade of Garden 360 LVT (Slide 14):

Last week, we launched a major upgrade of Garden 360 LVT on our smart liquid biopsy platform. Garden 360 is a leading liquid biopsy test for patients with advanced cancer. This upgrade provides oncologists with a much more comprehensive view of cancer by utilizing novel genomics and epigenomics sequencing technology with a 10-times larger panel, including 739 genes. The upgraded test covers both currently actionable and emerging biomarkers not available in any other liquid biopsy test. In addition, the test quantifies tumor burden with 10-times more sensitivity, further extending its best-in-class performance. Garden 360 LBT is covered by Medicare and major private payers for CGP of all advanced solid tumors. This upgrade marks the beginning of a new chapter of comprehensive genomic profiling, helping to identify novel targets for the current and next generation of targeted therapies and immunotherapies, unlock new clinical applications, and access genotype and phenotype from the blood.

Upgrade of Garden 360 Tissue Next Test (Slide 15):

In early June, we introduced an upgraded Garden 360 Tissue Next Test, featuring an expanded panel of 498 clinically relevant, actionable biomarkers to identify more treatment options for patients with advanced cancer and further improve best-in-class turnaround time. Tissue Next is differentiated as it leverages our AI-powered scoring algorithm and is the only tissue CGP test that improves PD-L1 detection by over 20% in non-small cell lung cancer. Importantly, the Tissue Next test is covered by Medicare for all advanced solid tumors.

Cosmos CRC Manuscript and Reveal (Slide 16):

Turning to slide 16, where we are the leader in tissue-free MRD, I'm excited to share that our Cosmos CRC manuscript, with data from our Cosmos colon study looking at stage two and stage three patients, was accepted for publication in the peer-reviewed journal Clinical Cancer Research. This study was also submitted to MOVID for Medicare reimbursements for the CRC surveillance MRD indication. Cosmos, our largest MRD study to date, evaluated ctDNA detection using a tissue-free approach and included 1,900 longitudinal surveillance samples from 342 patients, representing a median of six samples per patient. All patients in the study were able to undergo evaluation without the need for tissue testing. The study demonstrated 98% specificity with 81% longitudinal sensitivity for recurrence in stage two or higher colon cancer and more than a five-month median lead time from ctDNA detection to recurrence. This data validates the utility of Reveal in predicting recurrence in CRC.

Future Prospects (Slide 17):

Looking ahead, we have an extensive pipeline of clinical cohorts for establishing validity and utility for Garden Reveal. This will be instrumental in building compelling evidence to support efforts to expand reimbursement and influence changes in practice guidelines. We anticipate publications that will support submissions to Medicare for potential coverage in breast cancer next year and have important clinical validity studies for additional cancers such as lung, pancreatic, and gastric.

Demand and Financials (Slide 18):

We are excited by the demand we are seeing in the tissue-free MRD market, and there are multiple near-term inflection opportunities in 2025. We are making good progress towards CRC surveillance reimbursement, which will improve our ASP. We are also continuing to make very good progress in our COVID reduction initiatives for Reveal. These milestones are significant steps towards our long-term goal of achieving greater than 60% gross margins for our MRD business. We continue to manage volumes to minimize cash burn and expect Reveal to be gross margin positive in 2025.

Financial Results (Slide 19):

Turning to slide 19, I'll discuss our revenue results for the three months ended June 30, 2024, and refer to year-over-year growth rates unless otherwise noted. Total revenue grew 29% to $177.2 million, driven by precision oncology revenue, which increased 33% to $166.5 million. Precision oncology revenue from clinical tests increased 30% to $130.2 million, with clinical test volume growing to a record 49,400 tests in Q2 2024. Clinical volume growth of 14% was in line with our expectations. For the full year 2024, we continue to expect clinical volume growth to be approximately 20%.

Our biopharma business performed incredibly well in the second quarter, with precision oncology revenue from biopharma tests totaling $36.2 million, increasing 45%. This exceptional growth was fueled by a record number of tests in the second quarter, 10,475, which was up 56%. We have increased our biopharma revenue growth expectation for the full year 2024 to high teens from low teens.

ASP and Non-GAAP Financial Measures (Slide 20 and 21):

Regarding Garden 360 ASPs, we saw strong cash collections in Q2 2024, driven by continued improvements in both Medicare Advantage and commercial reimbursement. This led to a step up in the Garden 360 ASP range to $2,950 to $3,000, an increase from the range of $2,900 to $2,950 in Q1 2024, and from approximately $2,650 in Q2 2023. These trends give us confidence that the Garden 360 ASP can remain in this new range for the remainder of 2024.

For non-GAAP financial measures, our non-GAAP gross margin, excluding screening, was 62% in Q2 2024, in line with our full-year guidance of 61-63%. Non-GAAP operating expenses were $178.8 million, a reduction of $1.7 million compared to the prior year quarter. This decrease was driven by lower clinical study costs following the completion of Eclipse enrollment in Q3 last year and a decrease in G&A expense. These decreases were offset by an increase in sales and marketing expenses in preparation for the Shield IVD commercial launch.

Outlook for 2024 (Slide 22):

We are pleased to increase our revenue guidance and now expect full-year 2024 revenue to be in the range of $690 to $700 million, representing growth of approximately 22-24% compared to 2023. This increase reflects the cash collection upside we had in Q2, the increase in the Garden 360 ASP, and the increased full-year expectation for our biopharma business. We continue to expect non-GAAP gross margin, excluding screening, to remain in the range of 61-63% and non-GAAP operating expenses to be in the range of $720 to $730 million, representing a flat to 1% decline year-over-year.

Catalysts for 2024 (Slide 23):

We have made significant progress across each of our business areas in the first half of the year. We are excited by the potential opportunities across therapy selection, MRD, and screening. With that, we will now open the call to questions.

Q&A Session:

Operator:

We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one. If you are using a speakerphone, please remember to pick up your handset before asking your question. The first question comes from Mark Massaro with BTIG. You may proceed.

Mark Massaro:

Hey guys, thank you for the questions.

Q&A Session (Continued):

Mark Massaro:

The first one is for Helmi. Good to see the Cosmos study come out and submit for publication. Can you discuss what your expectations are on Medicare coverage in the CRC surveillance space? Obviously, Natera has an indication there—they are tumor-informed your blood. Do you think you can effectively cross-walk to that particular coverage, or do you think you might need a new Medicare coverage decision?

Helmi:

Yeah, thanks for the question, Mark. As a reminder, we already have coverage in the adjuvant setting for Garden Reveal. The aim of this publication and data is to get us the second half of the indication, which is a surveillance setting, in terms of testing patients that are further out at multiple time points. Right now, we're covered for three time points if the first is within the first 12 months of treatment. This study was designed with Medicare coverage in mind. We are very pleased with the study's outcomes, the publication, and the data. We believe it qualifies under the current LCD that exists.

Mark Massaro:

Thank you. I wanted to ask about the potential for ADLT status on Shield. Many lab tests today that have ADLT status are not for asymptomatic screening tests. Do you think your ADLT application might follow a similar timeline as other tests that have obtained it, and do you have any sense of the timing?

Helmi:

Thank you, Mark. The criteria for ADLT designation are very clear—unmet need and FDA approval would get the designation. We just need to go through the process. Our best estimate is that sometime within 2025, we will get our code and ADLT status, which will activate the favorable Medicare pricing enabled by that designation.

Dan Brennan:

Great, thank you. Congrats on the quarter. You discussed in the prepared remarks how, given the first-mover advantage with Shield, you think other blood tests will not be viable if they don't meet your performance. Could you expand on that a little bit? Are you referring to the NCD 74 and 90? Are you thinking about the lack of FDA approval, or do you believe the first-mover advantage gives you an unbeatable position?

Helmi:

Yeah, interesting point. We are hearing a lot of talk in this market versus even a slide of a presentation of the data. With our first-line indication FDA approval and the performance of CRC we have, combined with our long lead time advantage relative to others, we believe our performance sets a high barrier for viable products. To get favorable FDA approval, first-line indication similar to ours, and commercial success, a lower performance device would struggle to achieve these milestones. We are very confident with our current position.

Dan Brennan:

Thank you for that. One more tactical question on the strength in the quarter with biopharma—it was a healthy beat. You updated your guidance from low teens to high teens. Can you speak to what drove that beat and the updated guidance? The guidance implies a slowdown in the second half of the year. Any comments on biopharma and what the back half of your guide implies?

Helmi:

A lot of this has to do with Infinity. Infinity, with its epigenomic footprint and modularity for monitoring or comprehensive profiling, has seen significant uptake. This reflects the fruits of our investment over the past few years. Additionally, our regulatory competency in bringing regulated products to market on behalf of biopharma, our global reach, and a healthy pipeline build-up in China have all contributed.

Mike:

We had a really strong first half and are pleased to increase our guidance for the full year to high teens. We still have a strong pipeline, and although the business can be lumpy, depending on the timing of samples, we expect a strong second half of 2024.

Suda:

Hi guys, thanks for taking my questions and congrats on the strong beat. First one for Helmi—congrats on the FDA approval and CMS coverage. You continue to achieve milestones that were questioned by investors. The cash pay price for Shield is $1495, significantly above current non-invasive CRC screening products. What's the rationale behind this elevated pricing?

Helmi:

Thank you, Suda. The $1495 price reflects the value of Shield in the marketplace. Our health outcome modeling shows significant life year gains and economic value by bringing unscreened patient populations to the screening table and reducing CRC treatment costs. ADLT is a mechanism to price innovative tests like Shield fairly, based on their value, not precedent. We aim to build a sustainably profitable business. Additionally, Shield is a multi-cancer screening test, and by the time ADLT pricing activates next year, we expect to have updates related to multi-cancer screening for Shield. The price is justified based on these factors.

Suda:

Got it, that's helpful. Another question about USPSTF—now that you have FDA and CMS behind you, what are the next steps and studies needed over the next two years to get Shield into USPSTF guidelines?

Helmi:

We are optimistic about including Shield in guidelines, starting with ACS and then USPSTF. We are ahead of our plan for clinical evidence generation. FDA approval, NEJM publication, and a randomized prospective study showing the rate of screening in unscreened populations will support this. We have publications on adherence to blood tests, outcome models, and longitudinal adherence data. We are ready for the review process with peer-reviewed evidence.

Tejas Savant:

Thanks for taking my question. First, on the Shield side, and then a follow-up on Garden 360. Helmi, can you walk us through the pros and cons of an NGS approach versus a lower-cost PCR-based approach for blood-based screening assays? Also, any thoughts on the Exact-Quin strand licensing agreement and its implications?

Helmi:

Low-cost, older PCR technology cannot solve the problem of cancer screening. If it were that easy, the problem would have been solved ages ago. Our technology looks at thousands of features, providing a comprehensive view. The cost at scale for our NGS approach is around $200, largely due to logistics, not just lab processing. We have high throughput, low-cost operations, and are NGS experts. Regarding TwinStrand, I can't comment specifically, but for Shield and other products, future developments will focus on epigenomics.

Biography

 I asked Chat GPT to reflect on my father's career and my own.  My father, having died in 1988, I don't think of that often so it was a good opportunity.

###

My father was very innovative.

He grew up an only child on a farm in the 1930s 1940s.

He was one of the only kids from his county to go to college, that was highly unusual and ambitious.

He majored in agriculture and minored in journalism.   That reflected even more unusual interests.

He spent a few months after college at an intern job in DC in Dept of Agriculture.  While that didn't fit and he came home, that was also a highly unusual thing to do.

He got interested in hybrid popcorn (special breeds) which was occurring a decade later than hybrid field corn (for cows).

He built a successful business with 20 employees by the early 1970s and owned several farms in multiple states.

They took the family on big european vacations twice and he and I made a separate trip to Ireland.   When I was high school age he brought me along on business trips to NYC and Mexico City.

Unfortunately he went bankrupt and died of a stroke in 1988, he was about 62.

CHAT GPT 4o

Reflecting on your father's life and your own journey from an Iowa farm to a successful career in California medtech offers valuable insights into both your family's resilience and your innovative spirit. Here are some key points to consider:

Your Father's Innovation and Ambition

1. Uncommon Path to Higher Education: Your father's decision to pursue college, majoring in agriculture and minoring in journalism, was highly unusual for his time and place. This ambition likely set a precedent for valuing education and intellectual curiosity in your family.

2. Early Professional Experience: His internship at the Department of Agriculture in DC around 1950, though brief, demonstrated a willingness to explore opportunities beyond the familiar. This openness to new experiences might have influenced your own professional ventures and willingness to take risks.

3. Entrepreneurial Spirit: His interest in hybrid popcorn and the subsequent successful business he built showed his innovative mindset. Owning multiple farms and employing 20 people by the early 1970s is a testament to his entrepreneurial abilities and leadership.

4. Exposure to Diverse Cultures: The European vacations and business trips to NYC and Mexico City provided you with early exposure to different cultures and ways of thinking. This likely broadened your perspective and helped you adapt to diverse environments in your career.

Your Journey and Family Dynamics

1. Influence of an Innovative Parent: Growing up with a father who was both ambitious and innovative likely instilled in you a drive for success and a comfort with pursuing unconventional paths. This foundation could have fueled your own achievements in the competitive field of biotech strategy consulting.

2. Resilience Through Adversity: Witnessing your father's bankruptcy and his struggle with health issues may have imparted a deep understanding of the importance of resilience. This awareness could have helped you navigate the challenges in your own career and personal life.

3. Appreciation for Mentorship: Your acknowledgment of having wonderful mentors into your 30s and 40s suggests a value for guidance and learning from others. This might stem from the mentorship-like experiences with your father, such as traveling with him and learning about his business.

4. Stormy Family Upbringing: The rocky aspects of your family life, potentially including financial instability and health challenges, may have instilled in you a determination to succeed and create stability in your own life and career. Your father's innovations and struggles could serve as both cautionary tales and sources of inspiration.

Connecting the Past to Your Career

1. Innovation in Medtech: Just as your father found a niche in hybrid popcorn, you have carved out a significant role in medtech strategy consulting. This parallel highlights a family tradition of finding and capitalizing on unique opportunities.

2. Educational Pursuits for Security: Your journey through an MD PhD program at Stanford in California reflects your father's pioneering approach to education. Seeking greater job security, you pursued both a PhD and an MD, followed by an MBA, to access unique, high-paying opportunities resilient to change. This strategic approach underscores the importance of adaptability and continuous learning.

3. Balancing Risk and Stability: Your father's bankruptcy and health issues underscore the importance of managing risk. In your career, this might translate to carefully balancing innovative ventures with strategic planning to avoid similar pitfalls.

4. Legacy of Ambition: Your father's ambitious nature and your successful career both reflect a legacy of striving for excellence. This drive can be seen as a continuation of his innovative spirit, adapted to the modern landscape of biotech and medtech.

By understanding your father's impact on your upbringing and career, you can appreciate the ways in which his innovations and challenges have shaped your own path. This reflection not only honors his memory but also provides a deeper understanding of your journey from an Iowa farm to a prominent role in California's medtech industry.

Chat GPT Provides a Genomics Startup Discussion Guide

 I work in biotech consulting, with a specialty in genomics companies.   Chat GPT4 provided a generic discussion guide for get-aquainted calls.

##

1. Business Development and Strategic Partnerships

• Understanding the Market Landscape:
  • Explore ABC' positioning in the competitive landscape of precision medicine and biomarker development. What differentiates them from competitors?
  • How does ABC prioritize potential partnerships with pharmaceutical companies, diagnostics developers, and research institutions?
• Expanding Strategic Collaborations:
  • What are the criteria for selecting partners for their early access programs, particularly for platforms like GENE XYZ?
  • Discuss opportunities to expand collaborations with leading cancer centers and biopharma, especially those focusing on GENE XYZ-targeted therapies.

2. Product Development and Validation

• Technical Validation and Regulatory Pathways:
  • How does ABC approach the validation of their biomarkers, especially under FDA’s Good Machine Learning Practice guidelines?
  • What are the biggest regulatory challenges they face, and how do they plan to navigate them, especially in different international markets?
• Clinical Utility and Application:
  • What is the strategy for demonstrating the clinical utility of XYZ in real-world settings?
  • How does ABC ensure that their biomarkers are robust and reliable across diverse patient populations?

3. Innovation and Technology Integration

• Machine Learning and Data Analytics:
  • Delve into the specific machine learning methodologies used in XYZ. How does ABC ensure data quality and model accuracy?
  • How are they leveraging high-throughput omics data to enhance biomarker discovery and patient classification?
• AI in Drug Development:
  • Discuss the integration of AI with clinical trial design and drug development processes. How does ABC balance biological insights with computational predictions?

4. Commercialization and Market Expansion

• Product Commercialization Strategy:
  • What are the current commercialization strategies for their biomarker platforms, and how do they plan to scale these offerings?
  • How is ABC addressing the pricing and reimbursement landscape for novel biomarkers?
• Market Penetration and Expansion:
  • Explore potential markets beyond oncology. Are there plans to expand their biomarker platforms to other therapeutic areas?
  • How does ABC plan to address the growing demand for personalized medicine in different healthcare systems?

5. Customer and Stakeholder Engagement

• Customer Needs and Feedback:
  • How does ABC gather and incorporate feedback from clinical and pharmaceutical partners?
  • What are the common concerns or challenges raised by their customers, and how does the company address them?
• Patient-Centric Approaches:
  • Discuss the “people first” approach used at ABC H.R. and how it translates into practical patient care improvements.
  • How does ABC communicate the benefits and limitations of their biomarkers to healthcare providers and patients?

6. Long-Term Vision and Goals

• Future Roadmap:
  • What are the long-term goals for expanding their biomarker portfolio and developing new diagnostic and therapeutic applications?
  • How does ABC envision their role in the future of precision medicine and personalized healthcare?

These areas can guide your discussions with ABC, helping you understand their current challenges and where your expertise can make a significant impact. As you engage with them, you can also explore potential contributions in refining their business strategies, enhancing product development processes, and expanding their market reach.

FDA: Identifying a Grandfather Date - LDT 2024, Devices 1976

The grandfather date for devices is May 28, 1976

https://www.fda.gov/medical-devices/overview-device-regulation/history-medical-device-regulation-oversight-united-states

Established the regulatory pathways for new medical devices (devices that were not on the market prior to May 28, 1976, or had been significantly modified) to get to market: Premarket Approval (PMA) and premarket notification (510(k))

https://www.govinfo.gov/content/pkg/STATUTE-90/pdf/STATUTE-90-Pg539.pdf

Page 5

)(I) has been introduced or delivered for introduction

into interstate commerce for commercial distribution before the

date of enactment of this section, or

"(II) is within a type of device which was so introduced or

delivered before such date and is substantially equivalent to

another device within that type, 

In the May 6, 2024, FDA LDT regulation, the term "marketed before" is used numerous times, but without further clarification.

FDA intends to exercise 

enforcement discretion and generally 

not enforce premarket review and QS 

requirements (except for requirements 

under part 820, subpart M (Records)) for 

currently marketed IVDs offered as 

LDTs that were first marketed prior to 

the date of issuance of this rule and that 

are not modified, or that are modified in 

certain limited ways as described in 

section V.B.3; 

89FR37295 (and many other places in the same rule)

https://www.govinfo.gov/content/pkg/FR-2024-05-06/pdf/2024-08935.pdf

Chat GPT Summarizes Dl39919 For Oncologists

Summarizing the body of the draft LCD. DL39919

Main blog, https://www.discoveriesinhealthpolicy.com/2024/08/moldx-issues-new-draft-lcd.html

Summary of Literature Analysis for Oncologists

CMS Review of Literature for Myeloproliferative Neoplasms (MPNs):

Literature Reviewed:

CMS evaluated multiple studies and guidelines, including those from national and international bodies like the World Health Organization (WHO), International Consensus Classification (ICC), and National Comprehensive Cancer Network (NCCN). The review covered diagnostic criteria, mutation analysis, and prognostic factors associated with MPNs.

Salient Points Highlighted by CMS:

1. Diagnostic Importance of Mutations:

   • The presence of JAK2, CALR, and MPL mutations is crucial in diagnosing MPNs, particularly BCR-ABL-negative subtypes. These mutations serve as key markers in differentiating between different MPNs and other myeloid neoplasms.

2. Prognostic Implications of Genetic Mutations:

   • Certain mutations not only aid in diagnosis but also have prognostic value. For instance, CALR mutations are associated with a lower risk of thrombosis, while ASXL1 mutations often indicate a poorer prognosis and higher risk of disease progression.

3. Testing Methodologies:

   • CMS acknowledges both single-gene testing and multi-gene panels, with a preference for NGS panels due to their comprehensive nature. The importance of using highly sensitive assays for detecting low-frequency mutations was emphasized.

4. Differentiation from Other Diseases:

   • It is essential to distinguish MPNs from other conditions like chronic myeloid leukemia (CML). Even in cases where BCR-ABL mutations are present, JAK2 testing may still be relevant, especially if clinical suspicion for an MPN remains high.

5. Clinical Utility and Monitoring:

   • While quantifying JAK2 mutations could theoretically help monitor disease progression, the clinical utility of this approach is not well-established. Current guidelines do not support routine monitoring for this purpose, pending further evidence.

CMS Conclusions:

• Comprehensive Genetic Testing: CMS supports using comprehensive genetic panels, especially via NGS, to ensure accurate diagnosis and to capture relevant prognostic mutations.
• Prognostic Relevance: The reviewed literature supports the inclusion of various genetic markers in risk stratification and management planning for MPN patients.
• Monitoring Limitations: Despite some potential benefits, the routine monitoring of mutation burden, such as JAK2 V617F, is not currently recommended due to insufficient evidence of its impact on clinical outcomes.

CMS's review and conclusions underscore the importance of a thorough genetic evaluation in the management of MPNs and highlight the need for ongoing research to refine diagnostic and monitoring strategies.

##
Here's one in "plain english."

Simplified Summary of Evidence Analysis for Molecular Diagnosis of Myeloproliferative Neoplasms (MPNs)

MPNs are conditions where the bone marrow produces too many blood cells, and they can include diseases like polycythemia vera (PV), essential thrombocythemia (ET), and primary myelofibrosis (PMF).

• Diagnosis and Mutations: Diagnosing these conditions often involves checking for specific genetic mutations, especially in the JAK2, CALR, and MPL genes. These mutations help confirm the diagnosis and give insights into how the disease might progress.

• Testing Methods: Testing can be done using single-gene tests or more comprehensive panels that examine multiple genes at once. Panels can be particularly useful because they can detect a wider range of mutations that might not be caught with single-gene tests.

• Gene Panels and NGS: Using gene panels, especially with Next-Generation Sequencing (NGS), can identify additional mutations that could influence the disease course and help tailor treatment. For example, knowing the presence of certain mutations can inform decisions about therapies or even stem cell transplantation.

• Exclusion of Other Diseases: It's crucial to exclude other similar diseases, like chronic myeloid leukemia (CML), when diagnosing MPNs. Even if a BCR-ABL mutation (which indicates CML) is found, testing for JAK2 mutations may still be necessary if there's a strong suspicion of an MPN.

• Clinical Utility: While measuring the quantity of the JAK2 mutation can help monitor disease progression, its practical use in patient management isn't fully established yet. Current guidelines don't recommend regular monitoring of JAK2 mutation levels for treatment decisions.

This simplified summary highlights the importance of genetic testing in diagnosing and managing MPNs and the value of comprehensive testing methods to provide a complete picture of the disease.

Consolidating an AI Regulation article and an EU IVDR article

 

Navigating the Complexities of AI-Based Diagnostics and EU IVDR: A Balancing Act Between Innovation and Regulation

As artificial intelligence (AI) continues to revolutionize the healthcare landscape, particularly in diagnostics, stakeholders are grappling with the challenges of regulation. The rapid proliferation of AI-based tests, coupled with the evolving regulatory environment in both the United States and Europe, has highlighted the delicate balance between fostering innovation and ensuring patient safety.

AI in Diagnostics: A Dual-Edged Sword

The deployment of AI in medical diagnostics has introduced groundbreaking capabilities, such as identifying aberrant cells, predicting disease risks, and analyzing complex medical data. However, these advancements come with regulatory challenges, especially concerning algorithms that continually update versus those that remain stable. In the United States, the FDA has cleared or approved nearly 900 AI/ML-based medical devices, predominantly in radiology. The agency is keen on maintaining a balance between innovation and safety, encouraging early engagement with developers to ensure that the benefits of AI-enabled devices outweigh potential risks.

Courtney Lias, acting director for the FDA's Office of In Vitro Diagnostic Devices, emphasized the importance of predetermined change control plans (PCCPs). These plans allow developers to update their products without needing new authorizations, streamlining the regulatory process while maintaining oversight.

The European Perspective: Navigating the IVDR

In parallel, the European Union's In Vitro Diagnostic Regulation (IVDR) has been a significant point of contention for smaller firms and laboratories. The IVDR, which mandates stringent conformity assessments for most IVDs by independent notified bodies (NBs), has introduced significant hurdles. The transition has been marked by delays, cost increases, and a notable drop-off in certification applications. The European Commission has extended the transitional periods for various IVD classes, reflecting the complexities and uncertainties in compliance.

Gert Bos, executive director at QServe, highlighted the ambiguity surrounding the transition, noting that the historical self-certification process under the IVD Directive (IVDD) contrasts sharply with the rigorous requirements of the IVDR. This shift has led many companies, particularly small and medium-sized enterprises (SMEs), to reconsider their market entry strategies, often prioritizing the US market due to its more predictable and cost-effective regulatory pathway.

Challenges for AI-Driven Innovations Under IVDR

AI-based diagnostic tools face unique challenges under the IVDR framework. While the FDA in the US has begun to outline pathways for devices with dynamic algorithms, the European regulatory landscape is still grappling with how to manage these innovations. The European Commission's Medical Device Coordination Group is deliberating on how to balance the need for innovation with patient safety, especially concerning continuous learning models.

The recent AI Act passed by the EU Parliament establishes a comprehensive legal framework, categorizing medical devices as high-risk and subjecting them to strict conformity assessments. This legislative backdrop, coupled with the IVDR's stringent requirements, has created a complex regulatory environment that requires careful navigation by AI/ML developers.

A Shared Challenge: Harmonizing Innovation and Regulation

Both the US and EU regulatory bodies recognize the transformative potential of AI in diagnostics but are cautious of the risks. 

Former FDA Commissioner Scott Gottlieb has highlighted the challenges posed by the traditional regulatory frameworks, suggesting that new legislative measures, such as the VALID Act, may be necessary to accommodate the rapid innovation cycles inherent in AI technologies.

The European diagnostics landscape is similarly evolving, with stakeholders calling for a more flexible regulatory approach that does not stifle innovation. The debate continues on how best to manage in-house devices (IHDs) and laboratory-developed tests (LDTs), with professional organizations and experts advocating for clearer, more supportive regulations.

Conclusion: A Path Forward

As AI-based diagnostics and the IVDR reshape the global healthcare landscape, regulators, developers, and healthcare providers must work collaboratively to ensure that innovation can thrive without compromising patient safety. The ongoing dialogue between stakeholders and regulatory bodies will be crucial in establishing frameworks that can adapt to the fast-paced advancements in AI and diagnostic technologies.