Digital Pathology Market Shows Sluggish Growth

| October 17, 2011

I learn something new from Laboratory Economics every month.  According to the most recent October issue, there has only been a 4% increase in billables for CPT Code 88361, the code used for quantitative IHC analysis. Their estimate puts the total US clinical market for digital pathology at about $80 million as below.  Perhaps additional FDA cleared algorithms and primary H&E reads will increase use and market value.  Still, this number is far short of the billion dollar market that has been touted.  To achieve this will we need a CPT code for technical services for slide scanning, hosting, archiving and viewing and is this realistic/achievable? According to Mr. Farmer below costs will likely remain an issue without FDA clearance for primary diagnosis when labs also need to spend resources on essential items such as immunostainers.

Arguably, one of the most significant value adds for digital pathology remains telepathology but I also think more quantitative, reproducible and consistent image analysis compared with manual image analysis will be the other use and financial driver in this market. 

Reproduced with permission from Laboratory Economics.

After several years of 10% to 15% annual growth, the U.S. clinical market for digital pathology has lost speed. Medicare Part B carrier spending on CPT 88361 (digital pathology for quantitative IHC) increased by only 4% to $18.9 million in 2010. CPT 88361 is used to bill Medicare for the reading of digital HER2, ER and PR slides from a computer monitor.

Laboratory Economics estimates the total U.S. clinical market for digital pathology is currently about $80 million (or about 4x the size of Part B carrier expenditures on 88361).

Approximately 500 academic medical centers, hospitals and independent labs have a digital pathology system in place. The market leaders are Aperio Technologies and BioImagene (owned by Roche-Ventana). At this point only the Aperio and BioImagene systems have FDA clearance for HER2 scoring. No vendor has received the Holy Grail: FDA clearance to use digital pathology as a primary diagnostic tool.

The lack of FDA clearance for primary diagnosis means no vendor can scale up so that prices can come down, according to Michael Farmer, principal at the IVD consulting firm McEvoy & Farmer (Seattle, WA). “At this point, a digital pathology system costs as much or more than an Xpress or Peloris or a Benchmark Ultra—and yet they are not viewed as being as essential as a high-throughput tissue processor or top-of-the-line IHC system at most of the labs,” says Farmer.

Labeconomics2                                        (Click on image to enlarge)

Meanwhile, Allen Gown, MD, chief pathologist at PhenoPath Laboratories (Seattle, WA), believes glass slides will remain the principal media for pathologists for the next 10 years. “No digital image will ever be as efficient for ease of use as a glass slide,” he told pathologists in a presentation at the Med3000-PSA conference in Palm Springs, California, September 21-23. Gown said the biggest problem is the storage of digitized images. “The technology gets obsolete very quickly, but I can still look at glass slides from 100 years ago.” Over time, Gown thinks digital pathology’s principal use will be for telepathology at remote locations and possibly quantification.

Reproduced with permission from Laboratory Economics.

Category: Digital Pathology News, Pathology News

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