BBI Contributing Editor

DALLAS, Texas – The market for products sold to the office-based family practice and general physician is highly diverse and includes diagnostic products such as X-ray, ultrasound and ECG equipment; clinical laboratory instruments and reagents; procedural kits and devices; computer equipment, software, and data services; and supplies. In addition, the office-based family and general practice physician is the target of a large proportion of the sales and marketing efforts of pharmaceutical suppliers, since those physicians are responsible for about one-third of all drug mentions in office visits in the U.S., according to the most recent (1997) data from the U.S. Department of Health and Human Services, more than for any other physician group. The 52nd annual scientific assembly of the American Academy of Family Physicians (AAFP; Leawood, Kansas), held here in late September, provided an opportunity to view the new technologies that are changing the practice of office-based medicine and to assess future trends in the market.

Office-based physicians of all types, including specialists, comprise about 75% of all patient-care non-federal physicians practicing in the U.S. Consequently, the market for products sold to the office-based physician is substantial and is expected to grow as more health care is delivered in non-hospital settings. As shown in Table 1, the number of family practice physicians has increased more rapidly than has the total number of physicians over the past five years, while the number of general practice physicians has declined. Overall, the percentage of physicians in general and family practice has remained about the same over the past seven years.

Table 1: Trends in the Number of General,
Family Practice and Total Physicians in the U.S.

Year Family Practice Physicians

General Practice Physicians

Total Physicians

1975 12,183 42,374 393,742
1980 27,530 32,519 467,679
1985 40,021 27,030 552,716
1990 47,639 22,841 615,421
1995 59,345 16,867 720,325
1997 64,611 16,835 756,710
7.9% -4.1% 3.9%

Source: "Physician Characteristics and Distributionin the U.S., 1999," American Medical Association

The level of sophistication of the technologies used in the physician's office is continuing to advance, particularly in the area of information systems. According to presenters at the conference, primary health care is at a turning point, driven by the convergence of microcomputer technology and new understanding of the disease process, based on findings from the Human Genome Project. Advances in information technology are helping to improve the efficiency of diagnosis and treatment, and more effective diagnostic technologies and drugs are expected to emerge as new gene-based tools are introduced and as new targeted drugs are developed. Such innovations are providing the tools that primary care physicians need in order to respond to the expanding demand for health care services outside the hospital.

Another major trend in primary care is the declining ratio of caregivers to patients, a trend primarily resulting from the aging of the population. For example, the ratio of caregivers to disabled persons at home is expected to drop from 26:1 in 1970 to 6:1 by 2030. Such demographic changes are creating demands for more efficient approaches to the delivery of primary health care, including the use of telemedicine for virtual patient visits, on-line ordering of prescription medicines, the use of electronic medical records, and the use of pharmacogenomics to tailor treatment to individual patients. Numerous suppliers, including pharmaceutical companies as well as manufacturers of testing products, are beginning to market directly to patients rather than limiting their access by confining their channels to physicians only. Nevertheless, the office-based physician is expected to continue to play an important role in the health care system, adopting advanced technologies in particular for improving diagnosis, therapy selection, and monitoring of patients. An ongoing effort by a group of medical product suppliers, the Office of the Future Consortium, is both aimed at improving the productivity of office-based physicians and at introducing new technologies into the physician's office that previously were available only in higher-cost settings.

Telemedicine to transform general practice

The use of telemedicine and electronic medical records, while still in its infancy especially in the office setting, is expected to expand rapidly as the Internet brings lower-cost, reliable and easy-to-use systems within the reach of private practice physicians and many patients. Futurists such as Alice Pentland, MD, medical director of the Center for Future Health at the University of Rochester (Rochester, New York), predict that 90% of physicians will routinely access comprehensive clinical information systems from any location by 2010. Leading suppliers of the newest generation of telemedicine products targeted at the physician's office are listed in Table 2, along with their latest product offerings. At present, the focus in the market has been on electronic prescription ordering, allowing physicians to order medications at the point of care using hand-held (palm-top) computers. Most systems also provide checks for drug interactions and formulary checking. Leaders in the market at present include AllScripts (Libertyville, Illinois), PocketScript (Mason, Ohio)/ Data Critical (Bothell, Washington), and iScribe (Redwood City, California). Other emerging players include ePhysician (Mountain View, California), MedScape Mobile (Hillsboro, Oregon) and ParkStone (Weston, Florida).

Table 2:Leading Telemedicine Products and Suppliers for the Physician's Office

Company Product Key Features
(Libertyville, Illinois)
TouchScript Electronic prescription ordering at point of care; system is connected to more than 800 health plan formularies and includes notification of generic alternatives, indications of improper dosing, drug-to-drug, drug-to-allergy and drug-to-medical interaction data. Providing services to more than 12,500 physicians at over 3,500 sites as of June 30.

(Mason, Ohio)
Data Critical
(Bothell, Washington)
PocketScript Wireless connection to server installed in physician's office; access to 12,000 patient records in one second; electronic prescription ordering. Provides adverse drug interaction data, patient drug history and formulary guidelines. 260 contracts in place as of September, plus agreement for 15,000 physicians with Express Scripts.

(Redwood City, California)
i3000, i5000 Compaq Pocket PC/Palm Pilot computer-based electronic prescription service; formulary access; drug interaction checks; charge capture. Marketing partnership with Johnson & Johnson. 600 practices signed up on Compaq platform as of September, with an added 1,000 in queue.

(Hillsboro, Oregon)
Logician, Medscape Mobile MedicaLogic Logician EMR system includes order entry, integrated scanning and optical character recognition, multiple databases, security features and allergy data. Free software for mobile hand-held computers provides access to Tarascan ePharmacopoeia portable drug reference. Medscape Mobile launched in September.

(Weston, Florida)
ParkStone System Point-of-care prescription ordering (via fax) with formulary compliance and drug-drug interaction checks. Electronic access to insurer-specific referral networks. Continuous access to patient medication records (vs. daily download with competing systems). 1,500 physicians using Parkstone as of October.

(Mountain View, California)
ePad, eDR

Wireless Internet-based prescription ordering and electronic drug reference; prescriptions sent to ePhysician server and forwarded to pharmacy via Internet or fax. $20 monthly subscription fee. Milestone of 100,000 prescriptions reached in August 2000.

Source: The BBI Newsletter.

The market for such systems is expanding rapidly. For example, for the six months ended June 30, Allscripts reported e-commerce revenues of $12.8 million, an increase of 384% over the prior-year period. E-commerce revenue includes the sale of prescription medications over the Internet, software subscriptions, transaction fees, e-detailing revenues, and related services. Placements are growing so rapidly that it is difficult to estimate market share. Most vendors are charging monthly subscription fees ranging from $20 to $150 per month, or alternatively may charge a fee for each transaction. In some arrangements, physicians can avoid fees if they participate in electronic drug detailing by downloading drug information from sponsoring pharmaceutical companies. All vendors are either offering or developing wireless versions of their systems, allowing the physician to obtain data and write prescriptions at the point of care. The introduction of point-of-care systems has provided a major boost for the market for electronic prescription ordering systems, since fixed-based systems require the physician to alter practice patterns or to key in data that has already been written by hand. In fact, according to suppliers of electronic medical records systems, only 3% of general and family practice physicians actively use that related, mostly fixed-base technology. Another telling fact is that 7% have purchased such systems, indicating that more than half who have tried the technology have not found it to be useful. The advent of easy-to-use products that do not inhibit the mobility of physicians in the office is expected to drive much greater adoption.

Another important new driver of adoption in this sector is the recent Institute of Medicine report on medical errors, which estimates that over 7,000 deaths per year occur in the U.S. as a result of errors involving prescription medications. Electronic prescription ordering, particularly when combined with real-time checks on drug interactions, is expected to provide a major reduction in medical errors, since many errors are due to delivery of the wrong medication or an inappropriate one. In fact, some insurers are offering incentives in the form of discounts of up to $1,000 per year in service fees to physicians who agree to use electronic prescription ordering. Some large health care organizations have decided to adopt the technology as a means to both reduce errors and to streamline the prescription ordering process. For example, Aetna U.S. Healthcare (Blue Bell, Pennsylvania) reported an agreement with Allscripts in June under which Aetna physicians will be equipped with the TouchScript Personal Prescriber.

A number of vendors have established marketing partnerships with pharmaceutical companies to help fund their expansion. For example, iScribe has a partnership with Johnson & Johnson (J&J; New Brunswick, New Jersey) under which J&J helps to sponsor the service and is allowed to display drug information on the system in return. ParkStone also recently signed a marketing agreement with Johnson & Johnson.

From a technology perspective, the immediate priority for suppliers in the market is to introduce wireless versions of their systems, since not all vendors provide such capability at present. In the future, suppliers envision a major opportunity to expand into electronic medical records including on-line dictation of patient notes and reports, delivery of lab results and other clinical data, charge capture, and on-line communication with patients. As a result, the existing market may represent only a small proportion of the long-term opportunity. As the health care system evolves to more widespread use of electronic medical records, companies such as MedScape, which just launched a mobile electronic drug information system, may become important players. As of June, MedScape had accumulated approximately 13.1 million patient records in its MedicaLogic EMR system, and 19,000 physicians were using MedScape Chart Notes, which carries a subscription fee of $99 per month. Overall, MedScape has more than 2.4 million registered members worldwide, including over 440,000 registered as physicians and 1.2 million as allied health professionals. While Chart Notes is not a true EMR, since it is based on a paper chart, it allows physicians to file records on-line in a secure data center and to then retrieve records and reports that help improve practice and patient management. Incorporating at least some EMR capabilities into electronic point of care systems should provide major time and labor savings for physicians and their staff, as well as reducing errors in transcribing data into the medical record. Other suppliers of computer software and/or hardware for physician's office applications, including electronic medical records, include Physician Micro Systems (Seattle, Washington), ChannelHealth (Burlington, Vermont), Chart Logic (Salt Lake City, Utah), e-MDs (Cedar Park, Texas), MicroMed Healthcare Information Systems (Horsham, Pennsylvania), ePocrates (San Carlos, California) and JMJ Technologies (Marietta, Georgia).

Another aspect of telemedicine that is beginning to transition into clinical practice is remote interaction with patients, or virtual visits. Eastman Kodak (Rochester, New York) already has launched a system for the home health care market that allows nurses or doctors to communicate directly with patients over the Internet via audio and video, to discuss patient symptoms, ensure that medications are taken properly, assess wound healing, and view data such as blood pressure, ECG traces, and blood glucose readings. In addition, some physicians have set up their own telemedicine systems using off-the-shelf technology, since costs are continuing to decline. In an application discussed by Michael Tuggy, MD, of the department of family medicine at the University of Washington (Seattle, Washington) at the AAFP gathering, a physician is using a telemedicine system in schools to perform exams of children in conjunction with the school nurse. While school administrators are in favor of the approach, some school nurses feel threatened by the technology. In other settings, issues also have arisen regarding the use of such technology to lock out other providers.

A major barrier to the expanded use of telemedicine by private practice physicians at present is lack of reimbursement. Current regulations require that the physician be physically present with the patient during an exam. According to presenters at the AAFP assembly, there is no pending legislation to establish reimbursement for virtual telemedicine exams at the federal level, although there has been support for the technology in some states, notably Texas, and other presenters indicated that Congress is beginning to consider the topic. There also are issues regarding medico-legal liability and the appropriate level of reimbursement for virtual patient visits.

In the future, however, many experts predict that health care will increasingly be delivered in the home, and that office-based physicians will make widespread use of telemedicine and electronic medical records. In addition, patients will become increasingly involved by using e-mail to submit prescription requests to physicians, by using physician practice web sites for making appointments and by using services that allow them to access their own medical records as well as e-health information that ultimately will be individually customized by their physician. As discussed by Dr. Alice Pentland at the AAFP meeting, there is a study planned to begin in January 2001 at the University of Rochester to evaluate a Smart Home that will use remote sensing and telemedicine technology for management of elderly patients with a variety of diseases. The project is being funded by industry partners, and will focus on patients with Alzheimer's disease and diabetes, as well as on the areas of lifestyle impact on diseases such as cancer and cardiovascular disease, patients with psychological problems and infectious disease.

Pharmacogenomics to have major impact

Another new technology that is expected to have a major impact on the practice of medicine by general and family practice physicians is pharmacogenomics. Pharmacogenomics involves the use of genetic information to determine a particular patient's responsiveness to drugs, including the potential for adverse reactions, prior to prescribing medications. In a broader sense, the field also involves testing of individuals with an infection to determine if the organism they are harboring is resistant to antibiotics, as well as testing for the presence of certain oncogenes to determine which type of cancer treatment to prescribe. While some applications of pharmacogenomics will probably be reserved for specialists such as oncologists, cardiologists or neurologists, many experts believe that there are important applications in primary care, since drug therapy is the most widely used treatment modality in that setting.

At present, there are few pharmacogenomic tests in use in any clinical setting, and essentially none used in the physician's office. The best example of such a test is a genetic assay for single nucleotide polymorphism (SNP) mutations in the thiopurine methyltransferase (TPMT) gene. SNPs in the TPMT gene are associated with an inability to metabolize azathiopurine drugs, a defect that can cause serious adverse effects in patients who are given such drugs. Azathiopurines are primarily used for the treatment of acute leukemia. Another example of a genetic (nucleic acid) test that may prove useful to guide drug treatment is the fluorescence in situ hybridization (FISH) assay from Vysis (Downer's Grove, Illinois) for the her-2/neu oncogene. While the Vysis test is not FDA-approved for use in selecting patients for treatment, many clinicians have found that the FISH test shows a better correlation with response to treatment with Herceptin, a targeted drug for the treatment of breast cancer manufactured by Genentech (South San Francisco, California), than does the FDA-approved antibody method.

While the field of pharmacogenomics is at an early stage, there is the potential for it to become the method used to select drugs for therapy in a wide range of diseases. In principle, the technology can be used to help identify new drugs that will have significantly improved efficacy for patient groups with specific genetic characteristics while avoiding adverse side effects. An application that is becoming increasingly important, particularly in the U.S. as a result of aging of the population, is improved diagnosis of dementias, including Alzheimer's disease, because of the introduction of new, more effective drugs to treat such conditions. Tests are now available to primary care physicians for the mutations in the ApoE gene, as well as presenilin genes, that can be used to help confirm a diagnosis of Alzheimer's disease. Patients can then be treated with cholinesterase inhibitors such as Cognex or newer drugs such as galantamine, a drug that will be launched by Jannsen Pharmaceuticals (Titusville, New Jersey) early next year. The most recent treatment strategies use "cocktails" of drugs such as tacrine or rivastigmine combined with estrogen replacement therapy. As treatment regimens become more complex, there is an increased need for improved approaches to select the most appropriate drugs and to avoid adverse effects. In the case of cholinesterase inhibitors, the compounds are metabolized by cytochrome P450 enzymes, and tests are now available on a research basis from companies such as Affymetrix (Santa Clara, California) for SNPs that characterize defective variants of those enzymes. Consequently, genomic testing of patients could prove valuable in ensuring that patients with neurological disorders are not given drugs that will be ineffective or that will cause serious side effects.

At least two U.S. companies – PPGx (Research Triangle Park, North Carolina) and Orchid Biosciences (Princeton, New Jersey) – have described plans to offer direct-to-consumer and direct-to-physician genotyping services that would allow individuals or their physicians to mail blood samples to a central genotyping laboratory and have the results sent via the web or other media. Such services could potentially be established in a relatively short time, since genotyping technology is already available. The primary limiting factor for success of such an approach at present is the limited number of genetic determinants, or SNPs, that have been characterized so far which have well-defined and well-understood clinical applications. This situation will undoubtedly change in the future since the most recent figure for the total number of SNPs that have been identified in the human genome is approximately 2.8 million, 2.4 million of which have been characterized by Celera Genomics (Rockville, Maryland).

However, perhaps the greatest area of need in primary care at present for improved technologies for drug selection is antibiotic therapy. There are increasing concerns on the part of experts in the infectious disease community about over-use of antibiotics and the resulting increase in prevalence of antibiotic-resistant organisms. Penicillin-resistant strains of Staphylococcus aureus emerged many years ago, leading to the development of methicillin to deal with resistant strains. Subsequently, methicillin-resistant strains developed, which were controlled with vancomycin. Now, vancomycin resistance is becoming increasingly common. The prevalence of methicillin-resistant staph aureus is as high as 38% of patients in some large hospitals. It is estimated by experts in the field that the cost for treatment of antibiotic resistance, including laboratory testing costs, the costs of generating additional prescriptions and the need for more expensive drugs to treat resistant infections, totals $30 billion in the U.S. annually. The problem is due in part to the overuse of antibiotics: the Centers for Disease Control and Prevention (CDC; Atlanta, Georgia) estimates that 50% of all antibiotic prescriptions are unnecessary, and antibiotics are widely used in agriculture and meat production. However, it is also true that the development of resistance is inevitable, due to the wide array of biochemical mechanisms available to bacteria to neutralize the effects of drugs.

To combat the problem, epidemiologists are promoting more widespread use of immunizations, which only cover about 40% of at-risk populations now. In addition, improved diagnostic approaches are needed in primary care. For example, according to George Kent, MD, of Stanford University School of Medicine (Stanford, California), one-third of otitis media cases are due to viral infections, not bacterial infections, and thus are better treated with measures to provide relief of symptoms as opposed to antibiotics. In addition, there is widespread over-prescription of antibiotics for pharyngitis, since most cases are not caused by bacterial infections, and the primary indication for use of antibiotics in pharyngitis is to eradicate S. aureus infections, which can lead to rheumatic fever. The CDC recommends that a lab test be performed to confirm Strep A infection prior to treating pharyngitis with antibiotics. Point-of-care strep tests are available from a number of suppliers, including Quidel (San Diego, California) and Abbott Diagnostics (Abbott Park, Illinois), although the Abbott TestPack line is temporarily unavailable in the U.S.

Other new infectious disease tests continue to be launched for use in the office setting. Quidel recently launched a new influenza test (QuickVue Influenza) priced at about $15 that can be performed in 10 minutes in a physician office lab. At present, the test is classified as Moderately Complex under CLIA, but the company hopes to have a CLIA-waived version available perhaps as early as next year. Biostar (Boulder, Colorado) is another supplier of influenza testing products for the physician's office lab. The Biostar kit costs $15 to $20 per test, and sales are divided about evenly between hospital and physician office labs. Sensitivity has been shown to be equivalent to culture.

Lack of information about resistance among health care workers is the primary barrier to controlling outbreaks of resistant organisms, since the most effective countermeasures continue to be the use of standard infection control measures. Epidemiologists have found that molecular diagnostic testing methods are proving invaluable in tracking the spread of resistant organisms in the hospital setting. In fact, molecular diagnostics is the only tool that has allowed tracking of a specific organism's path. The primary issue at present is lack of availability of such testing technology, except in major medical centers. In the future, technology now under development may allow nucleic acid-based infectious disease testing to be performed at the point of care, or to at least become much more widely available. For example, the recently acquired Clinical Microsensors unit of Motorola Biochip Systems (Schaumburg, Illinois) is developing Hybrisensors, which are low-density, low-cost microchip devices using electronic detection of nucleic acids and minimal sample preparation. Other developers of DNA chip and related technologies include Affymetrix, Genometrix (The Woodlands, Texas), Nanogen (San Diego, California), Cepheid (Sunnyvale, California), Caliper Technologies (Palo Alto, California) and Aclara Biosciences (Mountain View, California). Such technology could play a key role in helping primary care physicians to improve the accuracy of diagnosis of infectious disease, to minimize over-use of antibiotics, and to help detect truly dangerous infections including antibiotic resistance, at an early stage.

One issue with the widespread application of pharmacogenomics in health care, however, is the lack of knowledge of the technology among most physicians, and the lack of ready access to expert interpretive skills to allow test results to be used appropriately. One company, GeneSage (San Francisco, California), has established an on-line network for genetic disease testing to help address that issue. GeneSage identifies labs that perform testing and allows physicians or organizations such as group health plans to order tests on-line, with results stored in a gene vault that can then be accessed on a secure basis by the client. Interpretation of results is available on-line or via phone consult with experts from GeneSage. Patients can be referred directly to GeneSage experts for consultation. While the company is focusing at present on genetic diseases, there is a clear possibility of expanding the service into the pharmacogenomic sector in three to five years.

As shown in Table 3, the market for pharmacogenomic testing products is substantial. In 1999, according to data from the National Association of Chain Drug Stores, nearly 3 billion prescriptions were dispensed by U.S. pharmacies. Based on data from the Pharmaceutical Research and Manufacturers of America (Washington), slightly more than half of those prescriptions represent new prescriptions, and the rest are refills. A large percentage of medications are used for treatment of diseases that could potentially be more effectively treated via pharmacogenomics. At present, the cost of testing is high, providing one barrier to adoption. For example, reference labs charge approximately $300 for a simple genetic test, and prices can range to over $2,500 for more complex tests. However, as use expands, prices are expected to drop, and some companies indicate that prices for testing services could drop below $50. Based on prices of existing nucleic acid test kits, companies supplying reagents for such tests could realize prices of perhaps $10 to $15 in high volume. However, before a large market can materialize, it will be necessary for more clinical applications to be developed, and for physicians to become more knowledgeable aboutpharmacogenomics.

Table 3:Pharmacogenomics Market Opportunity

Number of new prescriptions filled in the U.S., 1999

Approximately 1.5 billion
Number of prescriptions written per physician
Up to 30 new prescriptions and 30 refills per day
Total Number of SNPs identified Approximately 2.8 million
Number of Genes Being Targeted for Drug Intervention 500 in 1999; number expected to rise to 3,000 to 10,000
Approximate price per test for analysis of single nucleotide polymorphism or gene determinant Example pricing for reference lab testing is $295 per test (Myriad Genetic Laboratories); pricing for test kits expected to drop to $15-$30 range long-term
Estimated percentage of existing pharmaceutical market available to pharmacogenomic technology 87% (includes drugs for cancer; gastrointestinal disease; metabolic, endocrine and nervous system disorders; cardiovascular disease; and infectious disease)
Sources: National Association of Chain Drug Stores, Pharmaceutical Research and Manufacturers of America, Celera Genomics, The BBI Newsletter

New diagnostic modalities

Another potential growth segment of the physician's office products market is equipment for in-vivo diagnostics, including ultrasound systems, as well as equipment for performing bone densitometry measurements and systems for gastrointestinal imaging. A new technology that may expand the use of ultrasound, and perhaps X-ray imaging in the physician's office and clinics, was introduced at the AAFP assembly by (Pleasanton, California). The company has developed an Internet-based teleradiology system for the physician's office and clinics. The system interconnects primary care physicians with expert radiologists for ultrasound and X-ray interpretation. The technology also is capable of handling MRI and CT scans, but such systems are not typically placed in offices and clinics.

In a typical scenario, a sonographer serving multiple offices over perhaps a 50-mile radius performs the exam on the patient in the physician's office, and the images are then transmitted to a radiologist at a central location. The radiologist interprets the images and sends a diagnosis back to physicians in their offices. charges a $2 fee to upload or download images, and $1 to store an image for one year. The goal is to provide a hospital-quality exam at outpatient cost. While there has been some limited penetration of the physician's office market by lower-priced ultrasound systems, the lack of on-site radiology expertise prevents use for more complex applications, a limitation that hopes to overcome. The company is also partnering with Shantou Institute of Ultrasonic Instruments (Shantou, China) to offer lower-cost ultrasound instruments to the U.S. market.

Another application that is attracting a number of competitors to the physician's office market is bone densitometry. A new system, the MetriScan Bone Density System, was introduced at the AAFP meeting by Alara (Hayward, California). MetriScan uses storage phosphor technology to generate low-cost, high-quality X-ray images while avoiding the need for X-ray film and the attendant issues with toxic waste disposal. FDA clearance for the system was received in June. MetriScan is a tabletop system that allows office-based physicians to measure bone mineral density to screen patients at risk for osteoporosis and related bone fracture. According to Alara, there are 1.5 million people in the U.S. with disabling fractures related to osteoporosis, 10 million affected by the disease and another 18 million at risk. Furthermore, the at-risk population, primarily women over 50, is growing rapidly. The system is not sold outright. Instead, physicians pay a fee of $20 per scan, and the company requires that at least 25 scans be performed per month. According to Alara, the Medicare reimbursement for a bone mineral density scan is about $40. Sensitivity has been shown to be equivalent to dual X-ray absorptiometry (DXA), a widely accepted technique, and superior to heel ultrasound. The leading supplier of DXA systems worldwide is GE Lunar (Milwaukee, Wisconsin), with a 50% market share and 11,000 customers. Suppliers of ultrasound devices for bone mineral density measurements include Hologic (Bedford, Massachusetts), with the Sahara Clinical Bone Sonometer; Sunlight Medical (Rehovot, Israel); and Quidel's (San Diego, California) Metra Biosystems unit, with the QUS-2.

Another procedure commonly performed in the physician's office is sigmoidoscopy, for examination of the sigmoid colon to detect colon cancer or polyps. A new system for performing virtual exams of the colon was exhibited at the AAFP gathering by SpectraScience (Minneapolis, Minnesota). The Virtual Biopsy System from SpectraScience, which is awaiting FDA approval, uses laser-induced fluorescence analysis of tissue as an adjunct to conventional sigmoidoscopy to differentiate cancerous tissue from benign. The initial application is for colonic biopsy of polyps. A single fiber laser catheter is integrated into a commercially available forceps design. Options include a reusable forceps that accepts a disposable fiber catheter or a completely disposable forceps with integrated catheter. Other potential applications include cervical biopsy, esophageal biopsy and biopsy of epithelial tissues in the oral cavity. The company expected to have a CE mark for the system by the end of October. The device could potentially allow physicians to perform a complete colonic biopsy with flexible sigmoidoscopy, vs. a full colonoscopy.

Developments in office-based testing

Another major segment of the physician's office market is products for blood testing. As shown in Table 4 on page 248, the market is substantial, exceeding $950 million in 1999 in the U.S. Growth is expected to average about 4.5% over the next five years. Most testing in the office setting is for basic parameters such as blood glucose, enzymes, complete blood counts, cholesterol, urine chemistries and pregnancy markers. A small niche has also existed for many years for allergy testing, which is commonly performed in the U.S. with skin tests using a battery of allergens to determine immune response. Skin testing is typically performed by allergists and remains a relatively small segment because of the simple nature of the test. Pharmacia Diagnostics (Uppsala, Sweden) has marketed an alternative technology, the ImmunoCAP immunoassay system, for allergy testing for a number of years, but has so far had limited success in converting allergists to its product. Now, however, the company has made a corporate commitment to penetrate the market by targeting general and family practice physicians rather than allergists. Pharmacia hopes to expand the market by providing such physicians with the tools to diagnose the 10% to 15% of patients with allergies who are not treated by allergists.

Table 4:U.S. Physician's Office LaboratoryProducts Market, 1999

Market Segment 1999 Sales Forecast Growth Rate
General chemistry $359 million -1.0%
Rapid test kits $230 million 8.0%
Immunochemistry $98 million 5.6%
Hematology $84 million 7.9%
Urinalysis $49 million 6.9%
Whole blood glucose $44 million 8.2%
Allergy $29 million 0.4%
Other $64 million 7.3%
Total $959 million 4.5%
Source: The BBI Newsletter

The company believes ImmunoCAP may find better acceptance in the family practice setting than skin testing, since only a single needle stick is required, and for most allergies the immunoassay is equivalent to skin testing in terms of sensitivity. Recent data shows that misdiagnosis of allergies is a widespread problem, with about two-thirds of patients who are treated with antihistamines being negative when tested for allergies. More than 75 million people in the U.S. suffer from allergies.

Bio-Medical Products (Mendham, New Jersey) has developed the ThyroTest device, a screening test to measure thyroid stimulating hormone (TSH) levels in the office in under 12 minutes. The test gives a simple positive or negative result, using a threshold of 5 microIU/mL, and costs between $10 and $12. ThyroTest is FDA cleared for professional use only at present, and is classified as Moderately Complex under CLIA. However, the company has only marketed the product to physicians on a limited basis. Bio-Medical Products is filing to obtain CLIA-waived status and plans to focus on marketing the product directly to consumers as an OTC device once the required clearance is obtained. The test requires one drop of blood and may be stored at room temperature. The product can potentially save costs by reducing the need for performing TSH testing in a central or reference laboratory.

Update on the Office of the Future

The Office of the Future consortium, a group of medical suppliers developing advanced concepts for improving office-based health care, is continuing to move forward on a variety of fronts. Consortium members include Welch Allyn (Skaneateles Falls, New York); Midmark (Versailles, Ohio); Agilent Technologies (Palo Alto, California); GE Marquette (Milwaukee, Wisconsin); Physician Micro Systems; Schiller AG (Baar, Switzerland); pulseMD (Campbell, California); Tanita (Arlington Heights, Illinois); and Sunlight Medical. The consortium has been in existence since 1996 and has several suites in operation in the U.S.

Key aspects of the Office of the Future include automated patient identification, a computerized patient record and direct data input from medical devices. Most of the components in use are available now in the marketplace, although the key element of widespread availability of electronic medical records is not yet in place. Specific devices that have been implemented include the VideoPath Platform, for simultaneous viewing of exams by patients, physicians and staff to enhance education, compliance and training; portable and remote fetal monitors, imaging systems and ECG systems; an AudioPath Platform for otoacoustic emission exams; a stress testing system; and a system for rapid (45-second) visual field testing.

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