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| Roland Diggelmann, COO of Roche Diagnostics Global--courtesy of Roche |
Execs with Roche's ($RHHBY) diagnostics arm remain bullish about U.S. growth prospects even as reimbursement cuts place new pressures on the sector overall. An executive with the company anticipates booming demand to the point that price reductions aren't on the table.
"There are reimbursement reductions, but we also see an increase in testing volumes," Roland Diggelmann, chief operating officer of Roche Diagnostics Global, told Reuters.
He commented to the news agency that U.S. diagnostics sales growth for Roche has continued well above market trends, and that reality gives it good reason to keep prices where they are.
"We've had a very good start to the year in the U.S.," Diggelmann is quoted as saying. "We see really good demand. Diagnostics is the key to sustainable healthcare."
Diagnostics companies have faced increasing challenges in the U.S. in obtaining Centers for Medicare and Medicaid Services (CMS) or private insurance coverage for new tests, despite innovations or improvements to existing standards of care. As Reuters noted, reimbursements are now in the second year of reductions, at least through the CMS. For 2014, government payments dipped about 6%, and final reimbursement rates for 2015 Medicare Advantage plans are down about 3%, the story explained.
But Roche's diagnostics arm has continued to thrive, particularly in the U.S. The division booked more than $11.7 billion in sales in 2013, with 25% of that coming from North America, Reuters pointed out. In the 2014 first quarter, revenue for the division climbed 7%, a healthy clip by all measures.
That growth has been wide-ranging. In April, for example, Roche gained FDA approval to use its HPV test for primary cervical cancer screening. The expanded indication is widely expected to help boost revenue in the coming months for Roche and its Cobas HPV test, which had previous approval for use along with pap cytology as part of the cervical cancer screening process. Also in April, Roche snatched up Massachusetts-based IQuum for up to $450 million, a major boost to its point-of-care molecular diagnostics offerings. As well, Roche has continued to aggressively grow its companion diagnostics development in deals with Bayer, Cancer Genetics ($CGIX) and others.
- here's the Reuters story