Podcast interview with OraSure COO/CFO Ron Spair (transcript)

This is a transcript of my recent podcast interview with OraSure Technologies' COO/CFO Ron Spair.David Williams: This is David Williams, co-founder of MedPharma Partners and author of The Health Business Blog.OraSure Technologies develops and markets point-of-care oral fluid diagnostic tests for diseases such as HIV.I'm speaking today with Ron Spair.  He is OraSure's Chief Operating Officer and Chief Financial Officer.  Ron, thanks for spending time with me today.Ron Spair: Oh my pleasure David and thanks for having me.David: Tell me about the current CDC guidelines for HIV testing.Ron: Back in September of 2006, the CDC issued guidelines for the implementation of HIV testing, advocating that HIV testing become part of routine health care, such that when you go to the doctor and you're in the age bracket of between 13 and 64 years old, they're advocating that people should be screened for HIV regardless of risk factors.  So when you see your family practitioner or you present at an emergency room, an HIV test would be part of routine health care.  That's their goal: to make this part of a routine evaluation of the general health of the population.David: Why are they doing that now?  Why hasn't that been the case before?  Why is now the right time to think about a change of guidelines?Ron: The evidence indicates that the disease is no longer confined to any particular subset of the population, but has been out amongst the general population in such a way that many people who would otherwise not consider themselves to be at risk, are in fact, or have been potentially exposed to the HIV virus.With the great strides that have been made on the treatment front and the ability to identify individuals rather quickly with our tests or other rapid tests that are out there, we can identify people, get them into care, have behavior modification and cut down on the further spread of this disease in a way that will be beneficial to society.David: Once guidelines are put in place, they’re not necessarily automatically translated into clinical care right away.  But what impact have you seen with the CDC guidelines?Ron: I think that's an excellent point.  It's not a “flip the switch” type of transition from what the past practice was to what the proposed guideline incorporates.  We have monitored similar transitions for other recommended tests, and what you see is a gradual implementation of the guidelines.We are witnessing that.  Since September of 2006 we have seen an increase in testing, particularly in the hospitals and emergency rooms and also in physicians' offices where there's a move towards implementation of more HIV testing at the point of care.David: One of the issues relating to testing and why sometimes guidelines don't come into play that quickly, has to do with the inconvenience or reluctance that people have to have a test.  I'm thinking about if you have to have your blood drawn or even a urine sample, people might not want to do that.I know that your products may address that partly, but can you tell me what sort of products you actually have on the market or in development for HIV testing?Ron: Sure. We have had on the market our OraQuick Rapid HIV 1/2 test, which allows the practitioner to test an individual using their oral fluid.  That's one matrix that we test with.  We also test with finger stick whole blood, intravenous whole blood, and plasma.So it is the practitioner’s choice to determine the matrix to be used.  What we have found though, as you quite rightfully point out, that many people who are going for a test would prefer to have an oral fluid specimen taken.  It's not invasive.  You're not pricking someone's finger or taking a needle pull from them to obtain the sample.So in those instances where oral fluid tests have been adopted, we've seen a preference for them and also an increased testing volume in sites that have adopted oral fluid HIV testing.  It's a 20-minute test, very simple, and highly accurate.David: One of the challenges, beyond just the practitioner or the patient not being interested in the test or not knowing about it, has to do with reimbursement. What has the reimbursement situation been both on the private payer side and then for CMS?Ron: Some of the more progressive insurance companies; Blue Cross, Aetna, Kaiser, are moving towards reimbursement of HIV testing on the private pay side.  CMS is actually taking under advisement a recommendation for broadening reimbursement and applying that to Medicare recipients.  There's a coverage advisory that they are undertaking currently and I expect that they will have resolution to that towards the end of the year.  The comment period just ended a couple weeks ago, but clearly there is a lot of support amongst the HIV health care community for broad scale adoption and conformance with the CDC guidelines.David: If CMS decides to cover HIV testing, will that have a big impact on the market or is it also just something that is just kind of a gradual?Ron: It's going to depend on the form that that coverage ultimately receives.  If they restrict it to high risk individuals, that then would be somewhat obviously more limiting than  if they were to approve a coverage that would incorporate and encompass routine testing that is in conformance with the CDC's guidelines.  If we were to see the latter, it would be my opinion that it would have a significant impact on identifying HIV positive individuals in this country.David: We talked about the fact that you've got oral fluid testing, but is there a big impact if you're able to get the test results rapidly versus if it's something you have to wait a couple of weeks for?  How does that change the dynamic between the doctor and the patient?Ron: There are a number of different attributes in that relationship.  One is the elimination of the anxiety of the individual who would be awaiting their test results. Rapid, by the way, was truly spearheaded by the Centers for Disease Control.  They really made a push to implement rapid testing whenever and wherever possible.What we have from the history of testing in the US was a sad statistic; about 35% of the individuals who were tested with blood (it was sent off to a lab and they got the results a couple weeks late  --those individuals either never came back for the results or they just were not able to be found.  So now with the administration of rapid testing, you're having a diagnosis transmission greater than 99% of the time.  So those individuals who have the rapid test are finding out, in our case, within 20 minutes whether or not they screened positive for antibodies to the HIV virus.  Then of course further testing is warranted, but the capture rate is very, very high.David: So if you're able to have a higher capture rate, and also more people in for testing whether they're at a higher or low risk, what kind of impact does that have on the epidemic?Ron: Knowledge is so incredibly powerful with this disease.  If individuals know their status, it's been proven in studies by the Centers for Disease Control that they will alter their behavior and take the necessary precautions to stop the further spread of the disease in most cases.  It's also been proven by the CDC again that of the individuals who are transmitting the virus in today’s society, greater than 50% of those are unaware of their HIV status.  So by that I mean of the 56,000 or so new infections that occur each year in the United States, we're looking at something on the order of 30,000 being transmitted by individuals who are unaware of their status.So when you combine that and say: let's find out who is positive, let's implement behavior modification, we think it would have a profound impact on the incidence rate.David: One of my long-term clients is the Forum for Collaborative HIV Research and I know that they had a Summit on Diagnosis, Prevention and Access to Care late last year where OraSure was a participant.  Can you tell me about that meeting and what the impact was?Ron: Oh it was a great meeting!  It's a great organization of high-level individuals from around the country who are committed and dedicated to addressing the issue of HIV in our society.  They publish reports and links to articles that are clearly in support of the CDC's testing initiative.  We certainly look forward to working with them in the future and supporting their cause because we're very much aligned with the thrust of their mission.David: If a patient is going to their physician and let's say the physician doesn't ask them about an HIV test or doesn't mention it, should they speak up?  Or would that be out of line?Ron: I absolutely believe that we all have a responsibility to one another to know what our status is and so I would encourage anyone to ask their physician for an HIV test.  You don't know what your status is until you've had that test.  I certainly would encourage it regardless of whether or not the physician asks you for a test or not.David: What's the typical price or reimbursement rate for one of these quick tests?Ron: We sell our test into the market anywhere from approximately $11.00 - $17.00 per test depending upon the volume that our customers do on an annual basis.  Reimbursement for the test on CPT code is a little over $19.00 and of course then also there would be some reimbursement for the doctor’s time.David: I've been speaking today with Ron Spair.  He's Chief Operating Office and Chief Financial Officer of OraSure Technologies.  Ron, thanks for your time today.Ron: My pleasure David and thank you.