More Molecular Testing Options. A More Demanding Economic Equation.

Walking the exhibit floor at ADLM 2026 reinforced something that has been building across PCR-based molecular diagnostics for years. Laboratories have more choices than ever in how molecular testing can be developed and performed.

The range of PCR platforms, reagent suppliers, automation options, assay-development approaches, and laboratory support services continues to expand. Technologies and capabilities that once required substantial infrastructure and specialized development resources are increasingly available to a broader group of appropriately qualified laboratories.

That creates real opportunity. It can enable faster turnaround times, greater control over workflow, testing designed around specific patient populations, access to assays or analytes not otherwise readily available, better utilization of existing molecular infrastructure, and — in the right circumstances — different economics for testing that would otherwise be sent to a reference laboratory.

But accessibility should not be confused with simplicity. The expansion of molecular testing has already been accompanied by substantial growth in utilization. Payers have responded. Coverage requirements have become more specific, medical necessity has received greater attention, and broad multiplex testing has come under increasing scrutiny.

The opportunity remains. The equation has become more demanding.

For many laboratories and provider organizations, the traditional choice has been straightforward: send the specimen to a reference laboratory that already has the infrastructure, assay menu, personnel, payer relationships, billing capabilities, and operational systems required to perform the testing. Or, if the organization has sufficient volume and capability, establish or expand its own molecular laboratory.

As PCR instrumentation became more widely available and workflows improved, the second option became increasingly practical. The potential benefits extend well beyond reagent cost: faster turnaround time; greater control over workflow and testing priorities; closer integration with the clinical organization; testing tailored to a defined patient population; access to testing configurations not otherwise readily available; better utilization of existing laboratory infrastructure; and the potential to retain revenue associated with testing previously sent elsewhere.

In some situations, availability may be as important as economics. Molecular innovation does not always arrive first through a standardized commercial IVD menu. Laboratories have long played an important role in implementing testing for emerging pathogens, uncommon analytes, specialized populations, and clinical needs for which the appropriate commercial solution may not yet exist.

But the ability to perform a test and the ability to build a sustainable testing service are two different things.

It would be a mistake to evaluate today's molecular-testing opportunity using the reimbursement assumptions that supported some of the industry's growth five or ten years ago. The payer environment continues to evolve in response to utilization.

One visible example is current MolDX policy for molecular infectious-disease panels. In applicable outpatient settings, the policy distinguishes between smaller targeted panels of up to five pathogens and expanded panels containing six or more. The same policy also requires applicable tests without an FDA-cleared or approved indicated use to undergo MolDX registration and Technical Assessment to demonstrate that the service meets coverage requirements.^[2]

These restrictions reflect more than the fact that larger panels became technically possible. Increasing analytical capability allowed laboratories and manufacturers to detect greater numbers of targets simultaneously. But analytical capability alone does not establish that every target is medically necessary for every patient.

A laboratory evaluating PCR-based molecular testing today cannot rely solely on the published payment amount associated with a CPT or PLA code. Coding, coverage, medical necessity, payer mix, documentation, utilization controls, and denial risk all influence the actual economics of the service.

A test can be analytically excellent and still be commercially unsustainable. A laboratory can be fully capable of performing it and still struggle to achieve consistent reimbursement. And a testing model that worked under one coverage environment may look very different as payer policy evolves.

More accessible molecular technology does not mean clinical testing can simply be placed anywhere. For laboratories developing their own test systems — or modifying existing systems in ways that may affect performance — the laboratory assumes significant responsibilities.

Under CLIA, laboratories using test systems that are not subject to FDA clearance or approval, or that intend to modify cleared or approved test systems in ways that can affect performance, must establish applicable performance specifications before reporting patient results. CMS also treats modifications that can affect the performance of a moderate-complexity test as high-complexity testing, with the associated laboratory and personnel requirements.^[3][4]

An internal molecular-testing strategy may therefore require far more than an instrument and reagents. Depending on the testing model, an organization may need: appropriate CLIA certification and high-complexity laboratory capability; qualified laboratory leadership and testing personnel; analytical validation; quality-control and proficiency-testing systems; specimen-management procedures; laboratory information and reporting systems; ordering and medical-necessity controls; payer enrollment and contracting; coding and billing infrastructure; denial management; and ongoing regulatory and compliance oversight.

These are not new arguments against bringing testing in-house. They are long-standing components of the business model. That is why reagent price alone rarely determines the answer.

A simplified molecular-testing model can look remarkably attractive: expected reimbursement minus reagent cost equals margin. The real equation is considerably more complicated.

A sustainable model must account for some combination of clinical need, testing volume, assay design, laboratory infrastructure, personnel, workflow, payer mix, coverage, reimbursement, denial risk, and operating cost.

Volume matters because fixed infrastructure must be supported across sufficient testing. Panel design and complexity matter because additional analytical capability can create reimbursement risk when testing extends beyond what is clinically justified. Payer mix matters because two laboratories performing essentially the same test can experience very different realized reimbursement. Turnaround time matters because a faster result may create clinical or operational value that cannot be measured through reagent cost alone. Workflow matters because labor, repeat testing, quality requirements, and operating complexity can erode an apparent reagent-cost advantage.

Clinical need should always be fundamental. Sustainable coverage ultimately depends on testing that can be defended as medically appropriate.

Not every molecular-testing strategy begins with an effort to reduce cost. Sometimes the clinical need drives change. A laboratory may need an analyte not readily available through its current testing options. A defined patient population may require a different target combination. An emerging disease may create a need faster than standardized commercial solutions can reach the market.

In these situations, flexibility enables innovation. Economics, of course, still matter — because valuable testing must ultimately be sustainable — but the motivation is different from simply replacing an existing send-out with a less expensive internal alternative.

That distinction becomes increasingly important as payers scrutinize utilization. A laboratory developing testing to address a legitimate unmet clinical need has a very different foundation from one whose economics depend primarily on maximizing the number of reimbursable targets tested. The analytical technology may be similar. The clinical and economic rationale may not be.

Laboratory-developed testing has faced significant regulatory uncertainty. FDA's 2024 rule sought to amend its regulations for laboratory-developed tests. A federal district court vacated that rule on March 31, 2025, and FDA subsequently restored the regulatory language that existed before the 2024 change, effective September 19, 2025.^[5]

For laboratories and manufacturers making long-term decisions, the strategic lesson is broader than the outcome of one regulatory action. A sustainable business model should not depend on the assumption that today's regulatory or reimbursement environment will remain unchanged. Organizations entering or expanding in molecular diagnostics need to understand what is required today while anticipating where scrutiny may increase as technology, utilization, clinical practice, and healthcare economics continue to evolve.

Perhaps the most important lesson from the evolution of molecular diagnostics is that yesterday's economics cannot simply be projected forward. The testing model that worked five years ago may not work today. And the model that works today should not automatically be assumed to work five years from now.

Laboratories evaluating what to perform internally versus send out need to understand the clinical rationale behind the testing strategy, evaluate payer mix and coverage rather than relying solely on published reimbursement, and understand the fully loaded cost of producing a reportable patient result.

Manufacturers need to think about many of the same issues. Expanding access to molecular testing is valuable. Lowering operating costs is valuable. Providing laboratories with greater flexibility is valuable. Enabling assays that address needs not served by existing commercial products is valuable. But long-term success depends on the complete environment in which that technology has to operate.