MCED FDA Approval Challenges: Why Multi-Cancer Blood Tests Remain Out-of-Pocket

The healthcare industry is a market where technological innovation, regulation, and social demand are intricately intertwined. In particular, the cancer diagnostics field is especially challenging to enter, as it must simultaneously meet the demands of accuracy, safety, and cost-effectiveness.

In this article, we take a closer look at MCED technology, which has been drawing much attention in this complex environment, and explore what strategic choices and preparations healthcare startups will need to make in order to succeed.

Healthcare Startup Revenue Models:
Monetizing MCED Technology

Before diving into the main discussion, let’s first address one important point about the healthcare market: how exactly do healthcare startups generate revenue?

Healthcare startups—particularly in diagnostics and screening—must pursue diverse business models to secure sustainable revenue, even after clearing the significant hurdle of regulatory approval.

This is because technology in itself doesn't ensure success; bringing a technology into clinical practice and turning it into revenue requires a highly complex and multilayered process.

Although a variety of approaches exist, three representative models are the out-of-pocket market, the insurance and national screening market, and data monetization.

<Representative Healthcare Business Models>

What is MCED Technology?
Multi-Cancer Early Detection Explained

Earlier, we discussed the diverse revenue models available to healthcare startups. That, in fact, was a setup for this very topic: MCED. Multi-Cancer Early Detection (MCED) refers, quite literally, to technology that can screen for multiple types of cancer at once.

As noted, it is crucial for healthcare startups to understand both the structure of the medical market and where their technology fits within it. At present, MCED is primarily offered in the out-of-pocket market. Ultimately, however, the goal is to secure entry into insurance coverage and national cancer screening programs.

1. Traditional Cancer Screening Limitations:
Why Current Methods Fall Short

So, how has cancer screening been carried out until now?

To begin with, most cancer screening programs have traditionally been conducted on a cancer-specific basis. That is, each test is designed to detect only a single type of cancer. Such an individualistic approach has led to several problems: inconvenience for patients, a high cumulative false-positive rate resulting in unnecessary follow-up tests, and significant time and cost burdens.

For example, in breast cancer screening, women who undergo repeated testing over ten years face as much as a 50% chance of receiving at least one false-positive result.

In addition, the scope of these cancer-specific screening programs is limited. More than 65% of cancer-related deaths actually occur from cancers that are not currently covered by national screening programs. Because most existing initiatives focus on only a handful of cancer types, their overall impact on reducing cancer mortality remains limited.

2. How MCED Works:
cfDNA Analysis and AI-Driven Cancer Detection

Against the backdrop of these limitations in traditional screening, expectations are rising for MCED—a new technology that enables the non-invasive and convenient detection of multiple cancers through a single blood test.

MCED primarily works by analyzing various biomarkers such as cell-free DNA (cfDNA) and proteins with the help of AI, in order to identify signals released from cancer cells.

cfDNA refers to fragments of DNA that are released into the bloodstream as cells die or divide. Among these, cfDNA originating from cancer cells differs from that of normal cells in several ways—for instance, in genetic mutations, methylation patterns, and distinctive fragmentation profiles.

By leveraging machine learning and AI to integrate and analyze these cancer-derived cfDNA patterns alongside tens of thousands of other signals collected through research, it becomes possible not only to determine the presence of cancer but also to identify its type and location.

There is also an approach that uses proteins as biomarkers. When cancer develops, the levels of certain proteins in the blood increase or decrease in abnormal ways. Leveraging this principle, researchers can measure thousands of proteins simultaneously to infer not only the presence of cancer but also the tissue of origin. Recent studies have shown success in using protein patterns adjusted for sex to detect up to 18 types of cancer at an early stage.

Beyond cfDNA and proteins, other biomarkers listed in the table below are also being explored. However, at present, cfDNA-based testing remains the most prominent and widely studied approach.

<Cancer Detection Through Biomarkers>

3. MCED vs Traditional Screening:
5 Key Advantages of Multi-Cancer Blood Tests

Compared with conventional cancer screening, MCED offers four major distinctions:

• Early detection of multiple cancers with a single test – whereas traditional methods detect one cancer type per test.

• Organ-agnostic detection – instead of targeting specific organs, MCED captures genetic and protein signals in the blood to quickly identify the presence of cancer itself.

  • High accuracy in determining Tissue of Origin (TOO) – recent advances have pushed location-detection accuracy to over 80%.

• AI-driven prediction and classification – machine learning enables more precise identification of cancer types and their origins.

• Lower patient burden – compared with imaging or tissue biopsies, MCED reduces patient discomfort, procedural risks, and costs.

MCED Market Status: Why Multi-Cancer Tests Remain Out-of-Pocket

Despite the high expectations surrounding it, MCED is still confined to the out-of-pocket market, as it is not yet covered by health insurance.

At present, the main demand comes from three groups: high-risk individuals (such as those over 50 or with a family history of cancer), corporate wellness programs, and individuals seeking preventive health management. The reason lies in the fact that MCED has yet to clear two key hurdles required for reimbursement approval.

First, no MCED test has yet received formal market approval from the U.S. Food and Drug Administration (FDA). As a result, most MCED products are currently offered as laboratory-developed tests (LDTs) under the Clinical Laboratory Improvement Amendments of 1988 (CLIA).

Under CLIA regulations, a test may be commercially offered without undergoing the FDA’s rigorous review process, provided that testing is conducted within a single certified laboratory.

Secondly, there is still a lack of definitive evidence to demonstrate the clinical utility of MCED tests. Clinical utility refers to the positive impact a test has on actual patient health outcomes.

To prove this, clear indicators such as reductions in cancer mortality are required. (Under CLIA regulations, only diagnostic accuracy has been taken into account; clinical outcomes were not required, which is why MCED tests could enter the market even before such evidence was established.)

For this reason, most insurers currently do not cover MCED testing, leaving patients who wish to use it to pay the high costs out of pocket.

The current status of major companies in this space can be summarized as follows:

<Major MCED Companies>

In addition, although not an MCED test, there has been a significant milestone in the field of blood-based cancer early detection. Guardant Health’s colorectal cancer screening test, Guardant SHIELD, became the first blood-based test to receive full FDA approval and Medicare coverage.

Although this technology is distinct from MCED (multi-cancer early detection), it is highly significant as the first approved blood test for a single cancer type. The achievement of Guardant SHIELD required more than ten years of research and development, with an estimated investment of at least several hundred million dollars.

MCED Adoption Barriers: 3 Critical Challenges Facing Multi-Cancer Detection

Despite the enormous potential of MCED technology, several key challenges remain before it can be broadly applied in clinical practice. Let’s go through them one by one below.
 

1. MCED Accuracy Challenges: Understanding Positive Predictive Value in Cancer Screening

When cancer screening is applied to asymptomatic individuals in the general population, the actual prevalence of cancer is very low. In other words, the likelihood that a screened individual truly has cancer is quite small.

In low-prevalence settings, increasing sensitivity—as in MCED screening—improves the chance of detecting early cancers, but at the same time specificity tends to decrease, leading to more false positives.

Ideally, both sensitivity and specificity would be high, but in reality there is an unavoidable trade-off between these two metrics. As a result, the larger the screened population, the greater the absolute number of false-positive cases.

To make this easier to understand, let’s take HIV as an example. The ELISA test, which is widely used for HIV screening, has a sensitivity of 99.7% and a specificity of 98.5%.

If we apply these numbers to the HIV prevalence of 0.1% among people aged 15–49 in Korea, and assume—for the sake of argument—that one million people undergo HIV ELISA testing without any particular reason, the outcome would look something like the scenario below.

<HIV Test Results Analysis>

What stands out here is that among the 15,982 people who tested positive for HIV, only 997 were actually infected. In other words, the positive predictive value (the proportion of truly infected individuals among those who tested positive) is only about 6.2%.

This demonstrates that even a test with very high sensitivity and specificity can yield such results when applied to a population with very low disease prevalence.

MCED shows a similar pattern. In the PATHFINDER trial, 62% of individuals with a positive MCED result turned out to be false positives, and it took an average of 162 days to confirm that these cases were not actually cancer.

2. Clinical Evidence Requirements: Why MCED Needs Billion-Dollar Studies for FDA Approval

For insurance coverage, a test must demonstrate cost-effectiveness—that is, clear ‘clinical utility’ such as reducing mortality or improving quality of life. The ‘gold standard’ for proving this is large-scale randomized controlled trials (RCTs) involving tens of thousands of participants and extending over many years, sometimes even decades.

Such large-scale trials require astronomical investment, creating a formidable barrier to the development of new screening technologies. For example, the Prostate, Lung, Colorectal, and Ovarian (PLCO) Cancer Screening Trial alone had already cost $454 million by 2011—equivalent to approximately $562 million in 2022.

Proving Mortality Reduction: The Challenge for MCED

The National Lung Screening Trial (NLST) demonstrated that low-dose CT (LDCT) screening has reduced lung cancer mortality by 20%, and that colorectal cancer screening has significantly lowered both incidence and mortality. However, not all cancer types have replicated such success.

The National Lung Screening Trial (NLST) demonstrated that low-dose CT (LDCT) screening could reduce lung cancer mortality by 20%, and colorectal cancer screening has been shown to significantly lower both incidence and mortality. However, not all cancer types have achieved such success.

For instance, the UKCTOCS ovarian cancer screening trial reduced the proportion of late-stage diagnoses by 10%, yet it had no significant impact on mortality. This highlights that simply detecting cancer at an earlier stage does not necessarily guarantee a reduction in deaths.

MCED faces the same challenge. To date, no MCED test has reported results from a population-based trial in which the primary endpoint was overall mortality reduction.

Limitations of Surrogate Endpoints and the Current Status of MCED

Because of the enormous costs and lengthy timelines involved, many researchers have discussed the use of stage shift—that is, diagnosing cancers at an earlier stage—as a surrogate endpoint.

This approach allows results to be obtained much more quickly than directly measuring reductions in mortality. In fact, some cancer screening studies have already employed this surrogate endpoint as a predictor of screening effectiveness.

However, stage shift does not directly translate into mortality reduction across all cancer types. For breast and colorectal cancers, the association between stage shift and decreased mortality is relatively clear.

However, for cancers such as lung, ovarian, and esophageal, the differences in five-year survival rates by stage are more complex, making simple dichotomous models (early vs. late stage) less reliable for predicting mortality.

Indeed, there are cases—such as ovarian cancer screening trials—where stage shift was observed but no mortality reduction could be demonstrated.

Some of the ongoing MCED clinical trials are using such “stage shift” as either a primary or surrogate endpoint. For example, the NHS-Galleri trial in the United Kingdom has adopted the reduction in the incidence of advanced cancers (stage III–IV) in 3 to 4 years as its primary outcome measure.

However, whether these surrogate endpoints will ultimately translate into actual mortality reduction remains uncertain, and this continues to be a critical challenge that must be addressed before MCED can be widely implemented.

3. MCED Cost Analysis: Diagnostic Burden and Tissue of Origin Prediction

Even after receiving the results of an MCED test, the process does not end there. In the case of a positive result, additional diagnostic procedures may be required, such as:

• Additional imaging tests: PET-CT, CT, or MRI can each incur costs ranging from several hundred to several thousand dollars. According to the PATHFINDER study, more than 90% of individuals with a positive MCED result underwent imaging, and 53% received two or more imaging tests.

• Biopsy and other invasive procedures: Tissue biopsies of suspected cancer sites can also cost several hundred to several thousand dollars. Unnecessary invasive procedures not only impose physical and psychological burdens on patients but also carry risks of complications.

As can be seen, the financial burden extends not only to the MCED test itself but also to the subsequent diagnostic procedures. The currently commercialized Galleri test costs approximately USD $949.

Such high costs are burdensome for patients and may exacerbate health disparities, particularly among vulnerable populations with limited access to medical services.

The problem does not end there. The positive predictive value (PPV) of MCED tests has been reported to be around 40%, which means that about 60% of individuals who receive a positive result may not actually have cancer. These individuals end up spending significant time and money on unnecessary follow-up diagnostic procedures.

Thus, unnecessary diagnostic procedures and the associated financial burden serve as major obstacles to the broader adoption of MCED. To mitigate these challenges, some MCED tests incorporate a tissue of origin (TOO) prediction feature when a positive signal is detected.

By indicating the most likely source of the cancer signal, this function can help reduce indiscriminate whole-body examinations and make the diagnostic process more efficient.

According to preliminary research findings, MCED tests were able to predict the likely tumor location with approximately 90% accuracy within the top two predicted sites. In the PATHFINDER study, this tissue-of-origin (TOO) prediction feature helped shorten the time to definitive diagnosis after a positive MCED result, with a median of 79 days.

As the accuracy of MCED’s tissue-of-origin (TOO) prediction improves, it is expected to play a key role in reducing unnecessary examinations, alleviating the burden on patients, and preventing the waste of healthcare resources.

MCED Market Potential: Addressing Low Cancer Screening Participation Rates

Although there remain many hurdles to overcome, there are still compelling reasons to continue pursuing MCED. Compared with conventional cancer screening methods, the convenience of MCED—requiring only a simple blood draw—has the potential to significantly increase participation and uptake in cancer screening.

Currently, cancer screening uptake in the United States remains suboptimal. According to a report from the National Cancer Institute (NCI), as of 2019, the mammography screening rate among women aged 50 to 74 was only 76.4%.

Although this is the highest among the age groups, it still falls short compared with the WHO’s recommended targets and the over 80% participation rates reported in some countries.

Colorectal cancer screening stood at 66%, while lung cancer screening using low-dose CT was as low as 5–6%. These figures highlight that, despite the recognized importance of cancer screening, many individuals still do not undergo regular examinations.

<Cancer Screening Uptake in the United States>

An accessible MCED has the potential to address many of the factors underlying non-adherence to conventional cancer screening.

Traditional screening methods often face low participation rates due to anxiety about false-positive results, general fear of the procedure itself, and difficulties in accessing medical facilities. MCED can lower these physical, psychological, and structural barriers, thereby encouraging greater participation in cancer screening.

In other words, MCED is more than just a new technology; it has the potential to address the persistent problem of low screening uptake and thereby play a crucial role in improving early cancer detection rates. This, in turn, is expected to contribute to reducing cancer-related mortality and enhancing public health.

MCED Investment Strategy: How Healthcare Startups Can Succeed in Multi-Cancer Detection

MCED is an innovative technology with the potential to transform the paradigm of cancer screening. Its promise is particularly significant in countries with large healthcare markets, such as the United States.

In fact, numerous MCED developers have already attracted astronomical levels of investment. GRAIL, for example, has secured several billion dollars in funding, demonstrating the market’s high expectations. There is a widespread belief that once MCED proves its clinical utility, it will generate enormous revenue.

Amid this global trend, an increasing number of startups in Korea are also entering the field of MCED screening and diagnostic technology development.

However, outstanding diagnostic capabilities alone are not enough to guarantee success. Beyond simply 'detecting cancer early,' MCED faces the critical challenge of demonstrating its clinical utility—namely, proving that it can actually reduce mortality and improve quality of life.

To achieve this, companies must accumulate long-term data through large-scale clinical trials and overcome the complex hurdles of regulatory approval and insurance reimbursement systems.

“The MCED market is like two sides of a coin: it holds enormous potential on one hand, but fierce competition and high entry barriers on the other.”

In this environment, healthcare startups must pursue a multifaceted approach to succeed—one that goes beyond innovative technology to encompass robust business models, strategic generation of clinical evidence, and a commitment to social responsibility.

We at Kakao Ventures would be grateful to connect with anyone interested in discussing the future of cancer screening and to share perspectives together.