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Surging Ahead

The demand for sophisticated diagnostic techniques and increasing acceptance of personalised medicines are the emerging areas attracting the companies to plunge into IVD market, writes Anshuman Ojha of Elets News Network (ENN)

Diagnostic tests are playing an increasingly important role in the provision of healthcare. Approximately 80 per cent of the information that physicians use to make medical decisions is produced by clinical laboratories and diagnostics are now seen as critical inputs into overall quality of patient care. Whereas clinical assay output a generation ago consisted of basic blood chemistry and infection tests, the modern clinical laboratory has grown to offer a large array of diagnostics for immunological, cardiovascular, cancer, chromosomal/ gene, and pharmacogenomic markers. Many of these tests are still based on classic techniques such as cell culture, staining, and microscopy, but advancements in molecular biology technologies over the past several decades have driven the rapid growth of molecular diagnostics.

Market Dynamics

The global in vitro diagnostics market was valued at US$ 47.30 billion in 2013; it is expected to reach US$ 62.63 billion in 2017, at a compound annual growth rate of 7.3 per cent. The market is segmented by product, technology, application, end-user, and region.

IVD Market – By Product

global-ivdThe IVD market, by product, is segmented into reagents and kits, instruments, services, and data management system/software. In 2014, the reagents and kits segment accounted for the largest share of approximately 79.3 per cent of the IVD product market, and is expected to grow at a CAGR of 6.4 per cent during the forecast period. Growth in this segment is mainly attributed to the increasing demand for diagnostic tests and launch of new reliable, specific, and faster detection reagents.

IVD Market – By Technology

Based on technology global IVD market may be segmented as immunoassays, clinical chemistry, point-of-care, molecular diagnostics, haematology, coagulation, microbiology and other clinical techniques. Point-of-care (PoC) is the highest revenue-generating segment in the overall IVD techniques market. Molecular diagnostics is the fastest growing technique in the in the overall IVD techniques market due to its ability to detect the primary cause of the disease accurately. It also represents the latest major technological additions to the clinical lab and remains the most dynamic and fastest growing product spaces. The reach of molecular diagnostics and its utility in many forms of clinical testing has contributed to growth in other IVD segments, such as histology, microbiology, and blood bank testing.

The global in vitro diagnostics market was valued at US$ 47.30 billion in 2013; it is expected to reach US$ 62.63 billion in 2017, at a compound annual growth rate of 7.3 per cent

IVD Market – By Applications

On the basis of applications, the IVD market is segmented into diabetes, infectious diseases, oncology, cardiology, HIV/AIDS, autoimmune diseases, drug testing, nephrology, and other applications. Infectious diseases generated the highest revenue for current and forecast period mainly due to rise in the incidences of infectious diseases. HIV/AIDS application market is the second largest revenue generating applications segment and would remain the second largest through 2020. The oncology segment is expected to grow at the highest CAGR of 9.6 per cent during the forecast period, owing to the increasing number of cancer patients across the world.

IVD Market – By End-users

Hospitals, laboratories, academics, point-of-care testing and others are the end-users of global IVD market. Laboratories generate the highest revenue followed by point-of-care for global end-user market. Rise in the number of laboratories in Asia-Pacific regions and increased awareness about healthcare and its benefits are contributing towards the growth of laboratories market, which in turn drives the global IVD end-users market.

IVD Market – By Geography

In 2014, North America commanded the largest share of the global IVD market, followed by Europe, Asia-Pacific, and the RoW. North America accounted for the largest share of 43 per cent of global IVD market in 2014. The large share of this region can be attributed to the presence of advanced technologies, superlative opportunities for molecular diagnostics in genetic testing and cancer screening, established distribution channels in the region, and the presence of a large number of leading market players.

Dr-Anju-Gomber

Dr Anju Gomber, Senior Consultant, Microbiology, Sri Balaji Action Medical Institute, New Delhi

In vitro diagnostics is an indispensible tool in modern medical practice in order to diagnose and treat diseases promptly and effectively. Technical advancements and rising healthcare awareness are key factors contributing to the growth of IVD market worldwide. Clinical chemistry segment is expected to lead in terms of market size among all other segments of IVD. Molecular diagnostics market is anticipated to witness highest growth rate in which oncology segment is expected to grow the highest owing to increasing number of cancer patients across the globe. IVD market tends to be driven by rising incidence of chronic lifestyle diseases in emerging economies, growing ageing population rising adoption of Point-of-Care (POC) testing and personalised medicine”, says Dr Anju Gomber, Senior Consultant, Microbiology, Sri Balaji Action Medical Institute, New Delhi.

The United States is a prime market due to the availability of government funds, expansion of molecular diagnostics for genetic disorders and cancer screening, and easy access to IVD tests through diagnostic service providers and major leading companies headquartered in US.

On the other hand, Asia-Pacific is the fastest-growing region in the global IVD market, mainly driven by the increasing demand for IVD tests from large patient population, increased spending capabilities of consumers on healthcare, improving healthcare infrastructure in the region, and increasing investment by leading players and respective government agencies in the region.

Market Trends

The global IVD market has evolved over the years with launch of number of innovative techniques having applications across multiple therapeutic areas. A new range of condition-specific markers and tests with advances in genomics and proteomics and increasing investment in emerging countries are creating new opportunities for this market. There are multiple trends shaping the future of the IVD market:

Point-of-care (PoC) testing: Patients would rather get tested in a doctor’s office or when they’re in a medical clinic than have to get tested in a hospital. The move of testing to the PoC is driving growth in the market.

Need for speed: Medical diagnostics are getting pushed to deliver faster. This can be best seen in the explosion for raid and minimally—invasive diagnostic tools.

Emerging markets demand: Some emerging markets are now able to pay for diagnostic devices where they weren’t able to just a few years back. Beyond other in vitro tests, in India alone, there are 100 million malaria tests per year.

Lab-on-a-chip: It is a technology through which bodily fluid samples can be analysed on a small, disposable plastic chip. While lab-on-a-chip often is associated with point-of-care diagnostic testing, it also is likely to play a larger role in the traditional laboratory setting. In order to meet the growing capacity and maintain their revenue flows, labs will need to develop more innovative, lab-on-a-chip technology and better connectivity solutions that will require less materials, less reagent, fewer sample volumes, less labour, less time, and less cost.

 ➤  Growth Drivers

  • Rising incidences of chronic lifestyle diseases
  • Growing ageing population
  • Rising adoption of point-of-care testing
  • The high demand for personalised medicines is a potential area that encourages companies to invest in the IVD reagents and devices market
  • Increase in disposable income and awareness leading toward increased prognostic testing for conditions like diabetes and cardiac problems. The middle- and high-income families are becoming more health conscious, which is increasing the demand for preventive healthcare. Many companies offer annual check-ups to the employee. This is another driving factor for the in-vitro diagnostics market, especially for the biochemistry and immunology markets

Mobile diagnostics: The use of mobile technology to better manage chronic diseases, diabetes in particular is likely to increase in the coming years for two key reasons.

Ageing population: Many countries are seeing a marked ageing in their populations. As this occurs, new tests and diagnostic technologies are necessary to cope with the changes.

However, inadequate reimbursement and stringent regulatory approval framework are restraining the growth of this market.

Market Share

The global in vitro diagnostics market is highly competitive with the top five major players, Roche Diagnostics, Siemens Healthcare, Johnson & Johnson, Danaher Corporation, and Abbott Laboratories, governing ~58.9 per cent of the total market share in 2014.

New product development and launch is the most preferred strategy acquired by leading market players followed by agreements, partnerships, collaborations, and joint ventures and mergers and acquisitions. Market players adopt these strategies to access new technologies, expand their product portfolio, enter into growing markets, and/or to increase their market share. In addition to the top market players, companies such as Alere Inc.; Becton, Dickinson and Company; Biorieux; Bio-Rad Laboratories; Hologic, Inc.; and Qiagen N.V. primarily focused on mergers and acquisitions to accelerate their global product offerings. Companies such as Arkray, Inc. and DiaSorin S.p.A. adopted expansions as the dominant strategy to sustain their growth in the market. This increased competitiveness is expected to drive innovation in the market and thereby help the industry to solve existing challenges and meet the needs of end-users.

 ➤ Expanding Horizons

What are the current trends of IVD market and how fast is it growing?

Graeme-McNeill

Graeme McNeill, Global Manager – RX series, Randox Laboratories Ltd

The in vitro diagnostics (IVD) market was valued at US$ 50 billion in 2012 and expected to reach nearly US$ 70 billion by 2017 according to a report by Research and Markets. There are multiple trends driving the growth of the in vitro diagnostic market, like many countries are seeing a marked ageing in their populations. As this occurs, new tests and diagnostic technologies are necessary to cope with the changes. Patients would rather get tested in a doctor’s office or when they’re in a medical clinic than have to get tested in a hospital. The move of testing to the Point-of-Care (PoC) is also driving growth in the market.

What are some interesting applications in the IVD market?

On the basis of applications, the in vitro diagnostic market is segmented into diabetes, infectious diseases, oncology, cardiology, HIV/AIDS, autoimmune diseases, drug testing, nephrology, and other applications.

The oncology segment is expected to grow at the highest CAGR of 9.6 per cent between now and 2020, owing to the increasing number of cancer patients across the world.

What would you say is the general state of the IVD industry as we come to the end of 2015?

The in vitro diagnostic industry is experiencing a revival fuelled by a combination of technological improvements, cost pressures, reimbursement changes, rapid growth in molecular diagnostics and increasing interest in the genomics testing. Recent advances in molecular diagnostics technologies, including sequencing, PCR and microarray, are enabling greater sensitivity and precision in nucleic acid measurements, further expanding manufacturers’ offerings.

Which types of technologies and products do you see as being the most successful in this new IVD environment?

According to Simba Information, it is important to design and manufacture products that are right for the target audience and then to use scientific methods to prove that the products have a positive effect on patient care. Evidence-based medicine is becoming more critical for product success as advances in medical technology create increasingly sophisticated and thus more costly new tests.

Market-shareEmerging Fields

Major strategic developments take place in the field of cancer diagnostic technologies which exhibits high growth potential in the near future. Dominant market players such as Roche Diagnostics, QIAGEN N.V., Siemens Healthcare,and Abbott Laboratories, Inc. introduced several tests for cancer diagnosis in order to keep pace with the industry. The molecular diagnostics technology is also gaining popularity, primarily due to the increasing demand for personalised medicines.

 ➤ Restrains

  • No reimbursement of tests being performed at a standalone lab. In the Indian insurance market, none of the participants provide reimbursements for diagnostic tests. Though some insurance providers such as Axa and ING Vysya provide facilities like free annual check-ups, their policies do not include expenses for diagnostic tests performed otherwise. Diagnosis thus completely becomes an out-of-the-pocket expenditure for a patient. Hence, many people delay or refrain from using better diagnostic facilities
  • There are no regulations required for the manufacturing of the in-vitro diagnostic products either. This has resulted in high fragmentation of the market with many unknown manufacturers selling low-quality instruments and reagents. There is no assurance of the quality and performances of the reagents and equipment to the end user. Lack of regulations allows manufacturers to sell cheap reagents at half the price of a quality product
  • The difference in prices is mainly driven by the quality of reagents used. Many spurious reagents and equipment are available and used in the market. This hampers not only the creditability and quality of the test performed, but also the market for quality products’ manufacturers

 

ivd-marketThe high demand for personalised medicines is a potential area that encourages companies to invest in the IVD reagents and devices market. Becton, Dickson and Company; Hologic, Inc.; Qiagen N.V.; DiaSorin S.p.A.; and Biorieux are some of the growing diagnostics companies focusing on the growth of their molecular diagnostics business predominantly through mergers and acquisitions. In addition, biomarkers are also facing emerging trends in the market that uncovers new growth opportunities for IVD companies. For instance, in June 2011, Qiagen NV acquired Ipsogen S.A. to leverage its pubbroad range of assays covering 15 biomarkers for the prognosis, diagnosis, and monitoring of blood cancers. The acquisition enabled Qiagen NV to develop its business in molecular assays for profiling and personalised healthcare.

The demand for sophisticated diagnostic techniques and increasing acceptance of personalised medicines are the emerging fields attracting the companies to plunge into IVD market.

Opportunities

  • Potential opportunities for outsourcing
  • Convergence of new technologies
  • Increasing investment in emerging countries
  • Need for delivering healthcare services at unconventional locations

Indian Market

Indian IVD market is one of the fastpaced and growing markets in the world. This is one of the focus markets for most of the organisations connected with it. The Indian in vitro diagnostics (IVD) market is valued at `3,000 crore, and is expected to reach `9,000 crore by 2018 growing steady at a CAGR of 20 per cent. IVD covers a diverse range of products from individual reagents to testing systems that consist of reagents, instrumentation, and software. Also included are accessories such as dedicated software as well as control and calibration materials.

This remarkable growth can be attributed to increased healthcare awareness, desire to undergo preventive health checkups, availability of disease specific tests, corporate setups promoting health focus of employees, and drift from manual to semi-automated and automated equipment. It is estimated that India has around 100,000 diagnostic labs, out of which around 30 per cent are completely automated, 40 per cent are semi-automated, and 30 per cent are manual.

Increasing development in the corporate hospital infrastructure, evolution of automated instruments and emergence of new concepts like near patient testing, hospital laboratory management and customer relationship management has augmented the growth of Indian IVD market.

Lifestyle and communicable diseases are no longer restricted to urban centres, but are spreading to rural areas as well. As a large portion of rural areas do not have even the basic healthcare facilities, several cases remain undiagnosed. Certain statistics state that only one-third of the rural population has access to diagnostic centres. Most patients visit health centres outside the village for diagnosis and treatment. Nearly half of these public sector units don’t have treatment facilities for major chronic ailments.

Growing at a Constant Rate

Ganga-Mohan

Ganga Mohan, Executive President – International Business, Agappe Diagnostics Switzerland GmbH

What are the recent developments and trends in vitro diagnostics market?

  • Work flow automation through integrated systems for chemistry and immunology tests
  • Role of Next Generation Sequencing (NGS) in cancer diagnostics and therapy management due to reducing cost of automation and testing for personalised healthcare solutions
  • Role and awareness of pre-analytics solution increasingly felt by labs of various sizes to reduce pre analytic errors in sample handling
  • Increased awareness and use of workflow solutions for complete urine analysis including sedimentation
  • Use of Nucleic Acid testing to improve the blood safety from HIV, HBV and HCV viruses
  • Microbiology lab automation on the rise to improve the quality and turnaround time for various microbial tests

Few noteworthy applications in the IVD market?

  • Use of Polymerase Chain Reaction (PCR) as a nucleic acid testing for blood screening
  • Genome Based Diagnostics

How has the IVD market performed this year?

  • The in vitro diagnostics market growth has remained steady with 14-15 per cent
  • MNCs’ are targeting the tier II customer segment through their “Go to Market” strategy

Which types of technologies and products do you see as being the most successful in this new IVD environment?

  • Chemiluminescent based products, compact system using Nephelometry for special protein detection, Real Time PCR for Molecular Diagnostics, Next-Gen Sequencing, Spectroscopy for blood cell counting / haematology disorders.

How has the IVD industry evolved over the years?

  • Adaptation of new technologies by Indian labs, like Positive: Urine analysis automation; Negative: NAT for blood screening
  • Another thing that surprises me is the healthcare spending by the government as against the total budget.

Total-noThese changing disease patterns, rising incidence of diseases, higher healthcare spending, and untapped markets create abundant opportunities for IVD manufacturers. Even hospitals are looking to reach out to patients in tier III cities and rural areas.

IVD companies will not find it easy going in the unorganised and fragmented IVD market. The major reasons for the market fragmentation are the low entry barriers (leading to the mushrooming of laboratories) and the complete lack of standardisation. Less than 300 laboratories in India have accreditation, and due to the absence of legislation, standardised procedures and instruments are unavailable. Another significant concern for market participants is the inadequate insurance coverage. Responding to the demand for quality healthcare, most corporate laboratories have introduced cost effective and convenient patient care packages.

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