From Diagnostic Assay to Commercial Product: Validation, Regulatory Pathways, Reimbursement and Go-to-Market

A working assay is the beginning of the commercial question, not the answer to it.

Draft — owner to review

Scientists commercializing a diagnostic assay face four linked decisions: how to prove it works, which regulatory route to take, how it will be paid for, and who will buy it. Choosing each in isolation is the most common source of delay.

Validation

Analytical validation asks whether the test measures what it claims, reliably. Clinical validation asks whether the result is meaningful for patients. Payers and clinicians increasingly ask a third question — does using the test change care?

Regulatory pathways in the U.S.

A test offered as a service from a single CLIA-certified laboratory has historically followed a different path from a test kit sold to other laboratories. CLIA governs laboratory quality; FDA regulates in vitro diagnostic devices.^[1]^[2]

FDA's policy toward laboratory developed tests has been the subject of rulemaking and litigation; FDA's LDT page is the place to confirm current status.^[2]

For devices, FDA premarket routes include 510(k) notification, De Novo classification for novel lower- to moderate-risk devices, and premarket approval for higher-risk devices.^[3]^[4]^[5]

Europe

In the EU, in vitro diagnostic devices are governed by Regulation (EU) 2017/746 (IVDR), which applies a risk-based classification system.^[6]

Reimbursement

In the U.S., Medicare pays for many clinical laboratory tests under the Clinical Laboratory Fee Schedule.^[7]

For many molecular diagnostic tests, coverage decisions in certain Medicare jurisdictions run through the MolDX program administered by Palmetto GBA.^[8]

Advisor's analysis

Reimbursement evidence should be designed into validation studies, not added afterward. Founders who talk to payers and ordering clinicians before locking their clinical study often avoid running it twice.

Go-to-market

Service model (your laboratory runs the test) versus kit model (others run it) — different capital, regulatory and sales needs.
Who orders, who pays, who benefits — often three different parties.
Partnering with an established laboratory can accelerate access while you build.

→ Laboratory Sector Today covers diagnostic regulatory and reimbursement developments as they happen.

Sources

[1] U.S. Centers for Medicare & Medicaid Services, “Clinical Laboratory Improvement Amendments (CLIA).”
[2] U.S. Food and Drug Administration, “Laboratory Developed Tests.”
[3] U.S. Food and Drug Administration, “Premarket Notification 510(k).”
[4] U.S. Food and Drug Administration, “De Novo Classification Request.”
[5] U.S. Food and Drug Administration, “Premarket Approval (PMA).”
[6] EUR-Lex, “Regulation (EU) 2017/746 on in vitro diagnostic medical devices.”
[7] U.S. Centers for Medicare & Medicaid Services, “Clinical Laboratory Fee Schedule (CLFS).”
[8] Palmetto GBA, “MolDX Program.”

Bracketed numbers link to sources. Passages labelled “Advisor's analysis” are interpretation, not cited fact.

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