Growth of the middleman company is a sign of increased credibility and acceptance among its client organizations
There’s a new category of player in the clinical laboratory testing industry. It is the “middleman” company. One high-profile example of a middleman company in diagnostics is the company ixlayer of San Francisco, which has a novel plan for growth.
The software developer provides cloud-based diagnostic testing platforms to retailers, health plans, and biopharma companies. Medical laboratory tests are not processed by ixlayer, however, but are instead sent to independent CLIA-certified clinical labs for completion and results reporting.
Thus, ixlayer acts as a third-party “middleman” in the lab testing chain.
Ixlayer recently debuted as number 1,418 on the 2023 Inc. 5000 list of fastest-growing private companies in the US, according to a company news release. Might this signal a dynamic and expanding clinical laboratory middleman sector?
There are a number of other established middleman companies doing this on the web as well, including:
Produced by Inc. Business Media, the Inc. 5000 list is based on data analysis of the fastest growing private businesses in the US. Ixlayer reportedly grew its 2023 revenue 100% year-over-year.
“To be selected for the Inc. 5000 list is an honor that validates the value we deliver while enabling greater access to care for all,” said Pouria Sanae (above), co-founder and CEO of ixlayer. “We’ve developed a platform that powers millions of diagnostic tests each year and serves as the backbone of thousands of health testing programs for trusted health brands, healthcare delivery organizations, payers, and life sciences companies. I’m excited about the future as we redefine and simplify the diagnostic laboratory testing ecosystem.” (Photo copyright: ixlayer.)
Ixlayer Works with Retailers, Insurers, Biopharma, and Clinical Labs
Ixlayer “facilitates” tests by working with industry partners and clinical laboratories, Managed Healthcare Executive explained.
One such relationship is with retailer CVS, Fierce Healthcare reported. Ixlayer provides the cloud-based diagnostics platform, at-home sample collection kits, and coordination of testing services for some of the pharmacy company’s at-home testing products. They include:
“With nearly 70% of medical decisions dependent on lab testing, regular diagnostic testing is a cornerstone of improving health and wellness,” Pouria Sanae, co-founder and CEO of ixlayer, told Drug Store News. “At-home testing enables people to proactively take control of their health, on their own schedule, in the privacy of their own home and on a regular basis. Our mission of creating a healthier world through more accessible, affordable, and easy health testing requires systemic changes and buy-in from key stakeholders and partners.”
Ixlayer directs specimens to independent labs that perform the tests and report results to consumers via an online portal.
“Founded in 2018, ixlayer initially focused on remote lab testing for Alzheimer’s disease patients. The company now offers thousands of white-labeled, at-home, and onsite health tests ranging from women’s wellness to sexually transmitted diseases and chronic condition management,” the news release notes.
“We’re thinking of it more from the perspective of: How do we infiltrate this infrastructure into our whole healthcare ecosystem? How do we let traditional providers run their programs the way they want to?” Alecia Pritchett, ixlayer Chief Growth Officer, told Managed Healthcare Executive.
Ixlayer “is not a lab,” Managed Healthcare Executive explained. “It describes itself as a platform. Instead of performing its own lab tests, it connects providers and retailers to accredited laboratory partners. Instead of sending out its own team of phlebotomists to collect blood samples, the company coordinates with mobile phlebotomy firms.”
“This comprehensive data visualization solution provides a more insightful analysis of testing performance data, empowering health plans, retailers, and biopharma organizations to monitor and manage progress in real-time effectively. With this actionable intelligence, decision-makers can focus on addressing gaps in care, accelerating access to critical drug studies, and promoting greater health equity to improve clinical and quality outcomes and economics across the healthcare ecosystem,” said David Yu, Chief Product Officer at ixlayer, in a news release.
Any Lab Test Now Also Makes Inc.’s 5000 List
Also making the 2023 Inc. 5000 list is Any Lab Test Now, an Alpharetta, Ga.-headquartered laboratory franchise that was founded in 2007. Any Lab Test Now is another form of middleman company which bills itself as the nation’s first direct access lab testing service with 200 locations. This is Any Lab Test Now’s second consecutive year on the list, according to a news release.
Unlike ixlayer, Any Lab Test Now’s business model features independently owned and operated locations around the US. Customers go online to choose a testing location, pay for tests, and schedule an appointment. Tests include:
Allied Market Research reported that the global at-home testing market is expected to grow by about 10.5% annually from 2022 to 2031, when it will reach $45.5 billion.
Another middleman company offering at-home tests is Everlywell of Austin, Texas. Other middleman companies that enable consumers to order tests online and then visit a local clinical laboratory for specimen collection include Testing.com and Walk-In-Lab.com.
Ever since the COVID-19 pandemic, demand for at-home sample collection testing has grown steadily. Dark Daily has covered this in numerous ebriefs. That middleman companies are showing up on the Inc. 5000 list of fastest growing companies indicates that the middleman sector of the clinical laboratory testing industry is growing as well.
Following criticism over delays in authorizing medical LDT COVID-19 tests, the FDA swiftly shut down consumer at-home specimen collection schemes
Banning COVID-19 tests that
rely on consumers’ collecting their own specimens at home is one example where
the federal US
Food and Drug Administration (FDA) took remarkably swift action. It’s also
interesting to note how some business people—who lack formal training in clinical
laboratory medicine—often are ready to seize any opportunity to sell lab
tests directly to consumers, regardless of whether such tests are reliable,
accurate, medically-necessary, and reasonably priced.
Last month, in the midst of this novel coronavirus
pandemic, the attempt by a handful of direct-to-consumer
(DTC) lab companies to sell COVID-19 tests to customers was speedily stopped by
the FDA less than 10 days after the agency became aware of the DTC testing
schemes. This all happened off the radar screen of most pathologists
and clinical laboratory administrators, whose full-time attention has been on
serving the urgent needs of their parent hospitals, referring physicians, and
patients.
Within days of each other, several direct-to-consumer lab
testing companies announced plans to offer COVID-19 tests to consumers. A
common feature of these offerings was that each DTC company would send a
collection kit to the consumer, who would collect his or her specimen at home.
The kit would then be sent to one of the DTC company’s CLIA-certified
laboratories, where the SARS-CoV-2
(Severe Acute Respiratory Syndrome Coronavirus 2) test would be performed.
A flurry of press releases and news interviews about how
consumers could order and pay for their own COVID-19 test, collect the specimen
at home, and have a Clinical
Laboratory Improvement Amendments (CLIA)-certified lab perform the test
quickly caught the attention of the FDA. Federal officials took immediate
action, or close to it.
On March 20, the FDA issued a warning to healthcare
consumers to beware of “unauthorized fraudulent COVID-19 test kits.” On the
same day, the FDA announced updated
guidance on its website pointing to recent policy adjustments stating
that “testing by CLIA-certified labs that had not yet acquired Emergency Use
Authorization (EUA) for their COVID-19 diagnostic does not apply to at-home
COVID-19 testing, ‘including self-collection of samples to be sent to a
clinical laboratory,’” reported MobiHealthNews.
“We want to alert the American public that, at this time,
the FDA has not authorized any test that is available to purchase for testing
yourself at home for COVID-19,” the FDA said in a
statement. “The FDA sees the public health value in expanding the
availability of COVID-19 testing through safe and accurate tests that may
include home collection, and we are actively working with test developers in
this space.”
Nevertheless, the FDA stipulated that at-home specimen
collection was still not authorized.
Collectively, the FDA’s two actions sent an unmistakable
message to the DTC lab companies that affected their consumer COVID-19 testing
plans. Following public release of the FDA’s recommendation and policy change,
several of the DTC lab companies posted messages on their websites disclosing
that they would not be selling COVID-19 tests with consumer self-collection
after all.
Everlywell Health’s DTC Clinical Laboratory Test Plan
News stories about the plans of these companies contained
details that pathologists and clinical laboratory managers will find
interesting. That is certainly true of Everlywell,
a DTC lab company with a distinctive background.
Austin-based Everlywell was founded in 2015 by Julia Cheek. She
appeared on the Shark
Tank television program in 2017 and received $1 million in funding for her
business plan, which Dark
Daily covered. Cheek’s plan was to sell selected medical laboratory
tests directly to consumers, including placing collection kits in retail stores
and pharmacies. in the same year, investors pumped another $4 million into Everlywell,
for a total of $5 million in venture capital funding, reported Business
Wire.
“The extreme shortage of tests for COVID-19 puts millions of Americans at risk,” said Julia Cheek (above), Founder and CEO of Everlywell, in a March 18, 2020, press release. She added, “Everlywell is committed to helping stop the spread of COVID-19 in the US by making this test widely available. As the national leader in at-home lab testing, we want to use our resources and expertise to help as many people as we can. We are committed to this fight, and we’re here to help.” A few days later, the FDA reiterated its ban on at-home COVID-19 specimen collection. (Photo copyright: Forbes/Whitney Martin.)
Everlywell, which manufactures laboratory test kits for
everything from general wellness and energy/weight, to men’s health, women’s
health, and sexual health, was among several companies that just days before
the FDA’s warning had announced plans for an at-home COVID-19 lab test with telehealth diagnosis.
Before the FDA banned at-home testing, Everlywell had an
initial supply of 30,000 collection kits and planned to work with “multiple
labs to scale infrastructure,” with a goal of testing 250,000 people weekly, stated
a company news
release. In news interviews, Everlywell said these consumer-collected
specimens would be done by CLIA-certified clinical laboratories. However, the
company did not name the lab companies it expected to use to perform those
tests.
Everlywell’s at-home test carried a $135 price tag for
consumers, an amount the company noted was “at-cost.” Before purchasing a
COVID-19 test, consumers are required to complete an eligibility questionnaire
developed in accordance with CDC recommendations. Testing includes a free telehealth
consultation with a board-certified physician for consumers who tested
positive.
However, after the FDA issued its March 20 warning, Everlywell
announced on its
website that its COVID-19 test would not be available for individual
purchase.
“Our frontline healthcare workers are in desperate need of
testing,” the site states. “We have made the decision to allocate today’s test
supply to hospitals and healthcare providers only.”
Everlywell was asked to comment on these matters by Dark Daily’s sister publication, The Dark Report. As of this date, the company has not responded to that request.
Other DTC Companies Suspend Plans to Sell At-Home
COVID-19 Test Kits
The Wall
Street Journal (WSJ) reported that Scanwell Health, Nurx Inc.,
and Curative Inc. also were among the handful of companies that curtailed plans
to launch at-home COVID-19 testing following the FDA’s announcement.
Scanwell Health now plans to wait for FDA clearance under
the EUA for its at-home COVID-19 blood test.
Though the US is making strides to increase testing, lack of
testing capacity has hamstrung the nation’s healthcare system as it attempts to
control the COVID-19 pandemic.
An at-home test would appear to be one option for increasing
COVID-19 testing nationwide. However, the FDA is signaling to these
direct-to-consumer lab testing companies—along with clinical laboratories—that
specimen quality issues associated with consumers collecting their own samples
carry the risk of producing inaccurate test results.
This is something that pathologists and medical laboratory
professionals understand because the largest source of errors in clinical
laboratory testing come from the pre-analytical stage. This is the part of the
testing process where a specimen is collected, then transported to a laboratory
and prepared for analysis at the bench.
If direct-to-consumer testing continues to attract healthcare consumers and financial investors, medical laboratories could have a new source of revenue
Many have tried but few have found the right formula to
offer medical laboratory tests directly to consumers. Direct-to-consumer lab
testing as a robust business model has been an elusive goal. But now one
entrepreneur wants to crack this market and just attracted $50 million in
venture capital to fund her idea!
Outsiders often establish industries. This was the case when Jeff Bezos created Amazon in 1994. The online retailer transformed the way books were sold and, subsequently, established a massive new retail market.
Along the same lines, Julia Taylor Cheek, Founder and CEO of EverlyWell, a well-financed digital health company based in Austin—hopes to build a similarly disruptive business in the clinical laboratory industry.
Cheek is increasing her company’s outreach to consumers by
putting some of the company’s direct-to-consumer (DTC) medical tests on store
shelves at CVS and Target.
A former consultant and Harvard Business School graduate, Cheek raised $50 million in financing to expand EverlyWell’s digital platform. According to a news release, “Just two full years into operation, EverlyWell is reporting 300% year-over-year customer growth and a world-class consumer Net Promoter Score (NPS).”
“I think it’s a representation of sexism in our space. There are 15 other companies that have popped up in blood testing and you don’t hear anyone comparing Theranos to those male-founded startups,” she told Inc.
However, Dark Daily believes Cheek may be missing one
basis for the comparison with Elizabeth Holmes. Holmes intended for Theranos to
serve consumers with lab testing, and let consumers order and purchase their
own medical laboratory tests. Cheek is talking about the same primary business
strategy of letting consumers purchase their own lab tests.
Armed with this additional financing from investors, EverlyWell intends to expand services and develop new partnerships with retail pharmacy chain CVS Health (NYSE:CVS) and for-profit insurance company Humana (NYSE:HUM).
The news release notes, “The company has also expanded its
product line to offer 35 panels, including first-to-market tests in fertility,
vitamins, peri- and post-menopause, and high-risk HPV. In addition, EverlyWell
has launched an end-to-end care model for consumers, now offering an
independent physician consult and prescription, if appropriate, for select STDs
and Lyme Disease testing. All of this is included in an upfront price before
purchase.”
EverlyWell Intent on
Bringing Medical Laboratory Tests to Retail
Earlier this year, EverlyWell made nine lab tests available in more than 1,600 Target store locations, MedCity News reported. This may suggest that retailers are intrigued with direct-to-consumer lab testing.
“We didn’t create new tests or technologies. Instead, we’ve built technology that empowers people to get tests more easily. Our medical director works with the labs to create panels that are already validated and clinically relevant and understandable for consumers,” Julia Taylor Cheek (above), Founder and CEO of EverlyWell told Forbes. (Photo copyright: Arnold Wells/Austin Business Journal.)
Cheek reportedly established EverlyWell after becoming
disenchanted with medical laboratory tests that she felt were not well
explained and too costly under high-deductible health plans.
Just two years on, EverlyWell reports “hundreds of thousands of customers and tens of millions in sales.” The company plans to add additional staff on top of its existing 70 employees in anticipation of the new funding, Austin Business Journal reports.
“We are building a consumer brand, which means we have to be where people shop. We need to be in places like CVS and Target to really allow for broader distribution and name recognition,” Cheek told the Austin American-Statesman.
What Draws People to EverlyWell?
EverlyWell offers home health test kits, priced from $49 to
$400 that people can order without a doctor’s prescription and pay for online. Users
take their samples (saliva, urine, or a pinprick of blood) with provided
lancets and cotton swabs, MedCity News
reported.
EverlyWell’s top selling tests are:
Food sensitivity-$159;
Thyroid function-$159;
Metabolism-$89; and
Vitamin D deficiency-$99.
EverlyWell says it is “first” in direct-to-consumer tests
for:
EverlyWell Test kits come with registration information, instructions, collection tools;
Biological samples are sent by consumers to CLIA (Clinical Laboratory Improvement Amendments)-certified labs that partner with EverlyWell;
Results are generally completed within 10 days depending on type of test and business volume;
A physician reviews the test results;
Reports on test results are electronically accessible through smartphone apps and online web dashboards.
“Lab testing is arguably one of the most important steps in preventing and managing illness but has been largely ignored by digital health companies. EverlyWell is successfully navigating an entrenched industry to offer consumers an opportunity to take charge of their own health,” said Eric Kim, Managing Partner at Goodwater Capital (which led the financing), in the news release.
“We’re building the definitive technology-enabled healthcare platform that consumers deserve and have already come to expect in other areas of their lives,” Cheek told VentureBeat. “As high-deductible plans become the norm, consumers are becoming discerning buyers who look for seamless, digitally enabled experiences.”
Learning from
EverlyWell
Of course, pathologists and medical laboratory professionals
will watch to see if EverlyWell can sustain its rapid rise in popularity with
healthcare consumers. In particular, those consumers who prefer DTC testing
over traditional clinical laboratory visits and who may be on high-deductible
health plans.
The DTC test market represents an opportunity that most
clinical laboratories have yet to take seriously. There are many reasons why
medical lab managers and pathologists would be taking a “wait and see”
attitude. Meanwhile, EverlyWell has $50 million of investors’ money to use to
demonstrate the financial viability of its strategy to encourage consumers to purchase
their own clinical laboratory tests—and even collect their own specimens at
home!
Direct-to-consumer medical laboratory testing company gets a major shot in the arm as developers find ready investors and increasing consumer demand
Clinical laboratory tests, usually performed without fanfare, were thrust into the limelight during a recent episode of Shark Tank, an American reality TV show on which aspiring entrepreneurs compete for the attention and partnership funds of various investors.
EverlyWell, a direct-to-consumer (DTC) company that offers at-home lab tests without lab visits or doctor referrals, obtained a $1-million line of credit from Lori Greiner, one of Shark Tank’s participating entrepreneurs, according to MobiHealthNews. EverlyWell has consumers collect their own specimens at home, which are then sent to a medical laboratory testing facility.
Based in Austin, Texas, EverlyWell was founded in 2015 by Julia Taylor Cheek, CEO, with an aim to “make lab tests accessible, simple, and meaningful,” according to a news release. Cheek is also a Venture Partner with NextGen Venture Partners and formerly the Director of Strategy and Operations with the George W. Bush Institute.
“It’s incredible for the industry that we were selected and aired on a show like Shark Tank. It really shows the intersection of what’s happening in consumer healthcare and the high cost in healthcare and that people are really responding to new solutions,” Cheek told MobiHealthNews.
“I think the product is brilliantly crafted,” Greiner stated during the episode’s taping, according to MobiHealthNews. “It’s really nice; it’s really easy. It’s super clear. I think the state of healthcare in our country now is so precarious. I think this gives people an empowered way … to know whether or not they have to go find a doctor,” she concluded.
Greiner offered the $1 million line of credit (with 8% interest) in exchange for a 5% equity stake in EverlyWell, explained Austin360. According to SiliconHillsNews, she did so after reviewing certain EverlyWell financial indicators, including:
$2.5 million in revenue in 2016;
$5 million expected revenue in 2017; and
20% monthly growth rate.
Julia Cheek, CEO and Founder of EverlyWell (above), in a news release following her success on reality show Shark Tank, said, “We’re leading a major shift in the consumer health marketplace by bringing the lab to consumers’ doorsteps, and we are moving quickly to expand our channels, launch innovative tests, and deliver a world-class customer experience.” (Photo copyright: Forbes/Whitney Martin.)
Physician Review Still Part of Home-testing Process
EverlyWell lists 22 home lab tests on its website and a market share that encompasses 46 states. Shoppers can search for specific tests based on symptoms or by test categories that include:
General Wellness;
Men’s Health;
Women’s Health;
Energy and Weight; and
Genomic Test (through a partnership with Helix, a personal genomics company).
The most popular test panels include:
Food sensitivity;
Thyroid;
Metabolism;
Vitamin D; and,
Inflammation.
Prices range from $59 for a glycated hemoglobin (HbA1c) test (found under the general wellness category) to $399 for a women’s health testing kit. EverlyWell explains that it has no insurance contracts for these diagnostic tests, which do not require office or lab visits.
The testing process, according to EverlyWell’s website, proceeds as follows:
After ordering and paying online, kits arrive at the customer’s home;
The consumer self-collects a sample (such as blood spots, dried urine, or saliva) and returns it by prepaid mail to a medical laboratory that partners with EverlyWell. The company notes that it works with CLIA (Clinical Laboratory Improvement Amendment)-certified laboratories;
A board-certified doctor reviews the lab results; and,
A report is available online in a few days.
“Our goal is not to remove the importance of physician review. It’s to make the experience easier for the consumer,” Cheek told Texas CEO Magazine. “We designed a platform that is all about access and empowering consumers to have access to and monitor their own health information,” she continued.
Texas CEO Magazine explained that Cheek was inspired to create the company following “a bad personal experience with health and wellness testing that sent her to seven different specialists, cost $2,000 out of pocket, and left her with pages of unreadable results.”
Since then, the three-year old start-up company has garnered more than $5 million in venture capital, noted the news release.
Many Choices in Direct-to-Consumer Lab Company Market
EverlyWell is not the only player in the DTC clinical laboratory test space. According to MedCityNews, there are at least 20 other DTC lab test companies in the market including:
23andMe;
Laboratory Corporation of America (LabCorp);
Mapmygenome;
Pathway Genomics;
Quest Diagnostics (Quest);
Sonora Quest Labs;
Theranos; and others.
The direct-to-consumer lab test market grew from $15 million to about $150 million in 2015 and includes both large and small clinical laboratory test developers, noted Kalorama Information.
Clearly, the DTC testing market is expanding and garnering the attention of major developers and investors alike. This growing demand for home-testing diagnostics could impact anatomic pathology groups and smaller clinical laboratories in the form of reduced order testing and decreased revenue.