Price, Performance, and the FDA Approval Process: The Example of Home HIV Testing

Abstract

The Food and Drug Administration (FDA) is considering approval of an over-the-counter, rapid HIV test for home use. To support its decision, the FDA seeks evidence of the test’s performance. It has asked the manufacturer to conduct field studies of the test’s sensitivity and specificity when employed by untrained users. In this article, the authors argue that additional information should be sought to evaluate the prevalence of undetected HIV in the end-user population. The analytic framework produces the elementary but counterintuitive finding that the performance of the home HIV test— measured in terms of its ability to correctly detect the presence and absence of HIV infection among the people who purchase it—depends critically on the manufacturer’s retail price. This finding has profound implications for the FDA’s approval process.