The FDA may have approved GE Healthcare's (NYSE: GE) new imaging drug for diagnosing Alzheimer's Disease but that doesn't mean Medicare or the medical community will follow.

What is Vizamyl?
Vizamyl, or flutemetamol F18, is a compound used during PET scans (positron emission tomography) that can visualize function and structure of the brain. Vizamyl is a radiotracer that attaches to beta amyloid and makes it visible on PET scan, thus confirming the presence of the protein accumulation that is characteristic of Alzheimer's .

Currently, Alzheimer's is a clinical diagnosis classically associated with memory loss and aging. It can only be confirmed with brain biopsy at autopsy. However, the detection of beta amyloid is not specific for Alzheimer's, as beta amyloid accumulation also occurs in several other neurodegenerative diseases, dementia, or even just aging. At best, a lack of beta amyloid on PET scan could exclude the diagnosis of Alzheimer's but not necessarily prove it.

The broader market
Vizamyl is actually the second tracer of its type. Its predecessor, Amyvid (florbetapir F18) by Eli Lilly (NYSE: LLY), was not approved by Medicare. The Centers for Medicare & Medicaid Services report justified its decision citing that, "the evidence is insufficient to conclude that the use of positron emission tomography (PET) amyloid-beta (Aβ) imaging is reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member for Medicare beneficiaries with dementia or neurodegenerative disease ."

This report did, however, mention the possible use of Amyvid in excluding Alzheimer's Disease and to identify certain patient populations for use in studies for potential treatments. As such, the drug will not be covered in clinical practice but will be covered for use during certain clinical studies .

GE Healthcare has not made any particular distinctions between Vizamyl and Amyvid that would suggest a different fate for its new drug. The company did, however develop a training program for physicians on the interpretation of Vizamyl PET scans , which may have assisted its FDA approval, but the utility of these training programs in securing Medicare reimbursement remains questionable. Nonetheless, Merck (NYSE: MRK) has already licensed Vizamyl for use in its studies of a possible Alzheimer therapeutic that it is studying .

Eli Lilly has had very limited sales of Amyvid following the Medicare denial of coverage. For a company that lost its patent exclusivity of its top drug Cymbalta earlier this year , CMS's decision certainly delivered a blow. Eli Lilly has also been working on Alzheimer's treatments, although with limited success so far. One agent, solanezumab, had mixed results coming out of Phase III trials, and its other potential agent was halted in Phase II studies due to liver toxicity concerns .

Another player
Inexplicably, Navidea Biopharmaceuticals (NYSEMKT: NAVB) is also entering the beta amyloid imaging game. It has been developing another PET scan radiotracer, NAV4694, which works largely under the same mechanism as both Amyvid and Vizamyl. NAV4694 is currently under Phase II and Phase III trials.

While the commercial opportunity for these agents may be limited, Navidea's main focus is on radiopharmaceutical agents. Besides looking at Alzheimer's, Navidea is also developing imaging agents for diagnosing Parkinsonian diseases and for identifying cancer cells intra-operatively .

The Foolish bottom line
Even if Vizamyl is approved by Medicare, there remains the question of whether physicians will find early diagnosis of these neurodegenerative diseases clinically significant. Unfortunately, the therapeutics available for Alzheimer's disease and dementia are limited and early diagnosis does not necessarily mean better prognosis.

The ability to exclude the diagnosis of Alzheimer's with a negative Vizamyl PET scan also has questionable clinical significance since it would likely not change the patient's symptom profile or treatment plan.

Even as a mechanism of tracking disease progression, beta amyloid burden does not necessarily correlate with symptom severity; clinical exam and neuropsychiatric testing will be a much more cost-effective and simple way of assessing progression of any of these pathologies. After all, increased beta amyloid accumulation on PET scan may be irrelevant if the patient's mental capacity is clinically stable.

With minimal benefit to imaging diagnosis or exclusion, it is unlikely physicians would integrate Vizamyl or any of these beta amyloid tracers into their clinical practice. FDA approval may have signaled a win for GE Healthcare, but it remains to be seen if this product will be a commercial success.

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Fool contributor Amy Ho has no position in any stocks mentioned. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.