October 2007: Volume 33, Number 10
Integration of Diagnostic Information Hinges on IT
Siemens Pursues More IVD Acquisitions
By Julie McDowell
Shortly after General Electric (GE) bowed out of an $8 billion deal to acquire Abbott Laboratories’ two diagnostic businesses in early July, the other major imaging conglomerate, Siemens, surprised the laboratory community when it announced plans to acquire Dade Behring for approximately $7 billion. This announcement came in late July only a week after the AACC Annual Meeting and Clin Lab Expo in San Diego, where attendees and presenters speculated how Siemens’ recent purchase of Bayer HealthCare’s Diagnostics Division and Diagnostic Products Corporation (DPC) was poised to reshape diagnostic medicine by identifying synergies between imaging and IVD testing.
One of the primary advantages of bringing companies like GE Healthcare (Fairfield, Conn.) and Siemens (Berlin and Munich, Germany) into the IVD industry is their significant IT capabilities, which would be key in realizing the complete information management integration that should take place in the healthcare delivery system, explained David O’Bryan, PhD, President, Boston Biomedical Consultants, Inc. at the session, “Integrating Laboratory Diagnostics and Diagnostic Imagine in an IT-Driven Environment.”
“Even though the GE-Abbott deal didn’t go through, I don’t think there is any point in denying the benefits that could potentially come from the imaging and in vitro diagnostics resources being under one umbrella company,” said O’Bryan. “Siemens has also talked about better delivery in healthcare, and they have a broad range of infrastructure capabilities—including financing capabilities—to build enterprise delivery systems.”
Another reason that Siemens is willing to make significant investment in the IVD market is the projected growth of diagnostic testing. In 2006, the international IVD market was valued at almost $34 billion, and this figure is projected to grow to $46 billion by 2011. (See Figure)
“Siemens has stepped up and confirmed that it is going to play. The purchase of Dade Behring was at a premium, surpassing their purchase price of DPC and Bayer,” said O’Bryan. “In all, this represents more than a $10 billion investment in diagnostics from Siemens in just the last 18 months. GE also made a similar financial commitment, but unfortunately the deal fell apart. However, I don’t think they will remain dormant for long, especially considering Siemens’ recent acquisition move.”
More Diagnostic Tools
While few can argue about the benefits of bringing more IT capabilities to diagnostic medicine, many laboratorians are unclear about the impact of these developments. While company officials talk about bringing imaging and IVD testing together, laboratorians and radiologists are used to working in silos, explained Michael Lieberman, MD, PhD, Director of The Methodist Hospital Research Institute and Chair of the Department of Pathology at The Methodist Hospital in Houston, Texas. “Radiologists like to sit in front of screens and pathologists like to sit in front of microscopes and there’s not been a lot of integration,” he explained.
Even though radiology and pathology are divergent areas of medicine, there are numerous opportunities for integration, said Lieberman. In fact, his laboratory has been collaborating with radiologists for years on research projects. He sees several areas of diagnostic medicine where collaboration is advantageous, particularly when evaluating tumors. “Let’s say a clinician finds a tumor in a liver, and we are then able to do guided imagining and in vitro testing of different areas of the tumor simultaneously in real time,” he explained. “One of the problems with doing a simple biopsy of a tumor is that you are not sure if you are looking at or testing a specimen from the most aggressive or representative part of the tumor. But if you looked at a number of different areas in real time, you would get a better survey of what was actually going on.”
The integration of these two fields of diagnostic medicine could also result in more tools for both laboratorians and radiologists, according to another AACC meeting presenter, Richard Friedberg, MD, PhD, Chairman of the Department of Pathology at Baystate Health and Medical Director of Baystate Reference Laboratories (Springfield, Mass.). “I think Siemens will look at where the information is coming from that someone is going to use to make the diagnosis,” he said. “By developing tools based on this information and then putting these tools in to the same IT system, the diagnostic decision makers will have the appropriate information available to them in one place.”
In moving into the IVD arena, Friedberg believes that Siemens’ overarching goal is to streamline diagnostic medicine in order to identify and control disease sooner. “The real issue is how soon can we tell that something is going wrong,” he said. “Given all the expense during the late stage of the disease process, we could spend less money if we found out what was going on earlier in the disease state, as well as save lives.”