Government Help is “not exactly” an Oxymoron

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Abstract

EXECUTIVE SUMMARY

The list of companies which have been awarded NIST/ATP development funding related to diagnostic technologies reads like a “Who's Who” in the next wave of analytical systems, and demonstrates how dramatically health care laboratories are likely to change. There are many small companies involved, with interesting and sophisticated technologies, and most clinical lab professionals and suppliers probably won't recognize them.

EXECUTIVE SUMMARY

Many of the technologies, some of the resulting products, and a few of the start-up companies are very likely to succeed, commercially, as they transform laboratory practice with high throughput systems, hand-held devices and robust nanotechnology. The analytical methods used, and the tests that will be performed, by the new generation of systems are either unknown or infrequently encountered in most clinical labs today.

EXECUTIVE SUMMARY

The first successes are being reported, and it appears that the Human Genome project is already being accelerated with the help of some ATP-funded programs. The societal goals of the “Tools for DNA” projects are being met, as Affymetrix, PE Biosystems (Perkin Elmer), Molecular Dynamics (now an Amersham Pharmacia Biotech acquisition), and several others complete some of the tools that are making the genome map easier and less costly to define.

EXECUTIVE SUMMARY

The long-term implications for society of the risky, high technology development efforts encompassed by ATP are profound. Not only are enormous patient care improvements likely to be derived, but some financial wizards are predicting significant investment opportunities arising in the biotechnology field as new knowledge leads to new methods and improved patient outcomes.

EXECUTIVE SUMMARY

But the implications for in vitro diagnostic product suppliers may be even more significant, if that is possible. The competitor map may be changed in a few years, in ways that will make the market look quite different indeed. Many of the new technology companies are not among the top in vitro diagnostic competitors, although there are several examples of alliances between major diagnostic suppliers and small technology start-ups.

EXECUTIVE SUMMARY

The questions for business strategy managers in clinical laboratory product companies are whether or how to participate. Current participants are generally pleased with the program, and report that it has provided their companies with funding, encouragement and prestige. Like the space program, it is likely that the spending effort would not have been initiated for purely commercial reasons, since the risk/reward profile would not have been positive. The market demand and size were uncertain when the ATP efforts were begun several years ago. Also, like the “space race,” federal government support and encouragement are building an impressive infrastructure for the “decade of the genome,” in terms of knowledge, skill, materials and manufacturing process capabilities.

EXECUTIVE SUMMARY

The focus of this report is the NIST funded efforts, consisting of several dozen programs, which have implications for analytical systems likely to be used in future clinical laboratory practice. At the very least, business strategy managers should be aware of the opportunities for support from programs such as ATP, and may find it beneficial to check, periodically, on the progress of development efforts that might affect their competitive environment.

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