"Lab Industry Briefs"

Jamaica Med Techs, Kaiser Permanente, Cytyc, Myriad Genetics, Bayer, CLMA

MEDICAL TECHNOLOGISTS IN JAMAICA STAGE WALK-OUT IN JANUARY

LABORATORY TECHS ARE NOT KNOWN to be a radical component of the labor movement. But that doesn’t seem to be the case in Jamaica, where more than 80 of that country’s medical technologists walked off their jobs twice in January in protests against pay inequities.

The strike actions crippled the ability of several hospitals to treat patients. Without enough medical techs, the laboratories could not operate a normal schedule. At Bustamante Children’s Hospital, for example, only emergency patients were treated.

Jamaica’s med techs want wage parity with government scientific officers who do similar work. In Jamaican dollars, scientific officers start at $700,000 per year (US $13,225), while medical technologists start at $463,000 (US$8,747) annually.

When negotiations with the government’s Industrial Dispute Tribunal failed to reach a settlement, the med techs walked off the job and refused to comply with court orders directing them to return to work. The latest walkout ended after five days. The dispute is once again in the hands of the Industrial Dispute Tribunal.

KAISER TO MAKE PUBLIC TREATMENT GUIDELINES & PHYSICIAN INCENTIVES

HERE’S ANOTHER MARKER ON THE ROAD to greater public transparency about the process of delivering clinical care.

Kaiser Permanente announced last month that, as part of a legal settlement, it would become one of the first insurance plans in the country to publish the clinical guidelines which are used by its physicians to treat patients. Kaiser will also make public details about how it compensates its physicians, including any financial incentives it pays to physicians to limit the cost of treatment.

Kaiser had been sued by a coalition of consumer groups in 1999, including the Foundation for Taxpayer and Consumer Rights. Among other things, in its lawsuit, the coalition claimed Kaiser “interfered with doctors’ medical judgement by paying them bonuses to limit services and urging them to adhere to strict treatment and length-of-stay guidelines authored by Seattle-based Milliman & Robertson.” In court filings, Kaiser denied these allegations.

Lab executives and pathologists should view this development as another step in the road to greater public knowledge about the process of providing healthcare. Kaiser’s willingness to make public its treatment guidelines reflects the changed expectations of consumers and patients, who now demand access to this type of information.

CYTYC CORP. REPORTS MODEST GROWTH IN 2002

IT WAS A ROLLER-COASTER RIDE at Cytyc Corporation during 2002. But things seem to be settling down for the company, best known for its ThinPrep® liquid preparation Pap smear test.

During 2002, Cytyc’s attempt to acquire Digene Corporation was thwarted by the Federal Trade Commission. (See TDR, March 11, 2002.) Because of this and other business developments, by the early summer, Cytyc’s share price was declining precipitously. From a 12-month high of $28.00, it has traded in recent weeks in the $12.00 range.

Cytyc reported that fourth quarter 2002 revenues increased by 5%, to $66.7 million. For the full year, its revenues totaled $236.5 million, a growth rate of 7.0% over 2001’s revenues of $221.0 million. This is a much slower rate of revenue growth than in recent years.

These numbers reflect the fact that market share of ThinPrep in the United States is reaching a mature stage. In past quarters, Cytyc’s public earnings statements trumpeted the growth in market share for ThinPrep. That information was conspicuously absent in its press release covering fourth quarter and year-end financial performance.

Another element in the slowing rate of growth for Cytyc and its ThinPrep product may be competition. TriPath Imaging, Inc.’s SurePath™ liquid preparation test is quietly winning new laboratory customers.

One interesting development in the marketplace may also be a quiet revolt by Cytyc’s laboratory customers against certain of its business practices. Now that there is a credible choice of liquid preparation products, some of Cytyc’s laboratory customers may be voting with their feet when contracts come up for renewal.

MYRIAD GENETICS SEES INCREASE IN REVENUES FROM PREDICTIVE TESTING

DIRECT-TO-CONSUMER MARKETING of predictive genetic testing is causing revenue to climb at Myriad Genetics, Inc., based in Salt Lake City, Utah.

For the quarter ending in December 2002, Myriad’s total revenues in- creased to $17.0 million, a gain of 26%. Of greater interest to laboratorians, however, is the company’s sales of predictive genetics tests. Myriad says that revenues from predictive genetics increased by 28.1% for the quarter, from last year’s $6.4 million to this year’s $8.2 million. For the most recent six months, predictive genetics revenues increased from $11.9 million to $16.0 million, a 34.4% jump.

Myriad is at the tail end of a five- month marketing test. Since September, the company has run direct-to-consumer ads in the Atlanta and Denver markets to raise consumer awareness of its BRCAnalysis® test, a genetic-based assay which identifies patients at high risk for breast or ovarian cancer.

However, the additional expenses of the advertising campaign, along with increased spending to upgrade gene analysis equipment in its research arm, caused Myriad Genetics to report a loss of $6.9 million for the quarter.

CLMA, BAYER DEVELOP LAB MANAGEMENT PROGRAM AT NOTRE DAME

IT’S LONG OVERDUE and its underpublicized. On April 6-10, 2003, Bayer Diagnostics and the Clinical Laboratory Management Association (CLMA) will conduct the second “Bayer Diagnostics Management Program” at the University of Notre Dame in South Bend, Indiana.

This five-day program is designed to provide “a core base of business skills” to diagnostic healthcare professionals. Bayer and CLMA conducted the first program last November. Response was significant, so the decision was made to repeat the program this April.

THE DARK REPORT has often suggested that a university-based, executive-in-residence training program would help technically-trained laboratory administrators add business and management skills to their scientific training. Our hat is off to Bayer and CLMA for undertaking this project.

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