With a CAGR of 19-20%, the in-vitro diagnostics industry is expected to achieve excellence in all aspects
By Divya Chawla
In-vitro diagnostics (IVD) is one of the most vibrant sectors of the healthcare industry. India, in addition to Brazil, Russia and China, offers immense growth opportunities for the IVD industry owing to increasing healthcare budget, coupled with increasing number of private corporate hospitals and stand-alone diagnostic centres, and the rising income levels backed by a huge, untapped population bases. As per reports, the combined IVD market in India, Brazil, Russia and China was pegged at US $2.9 billion in 2009. In another five years, this market will grow at a CAGR of 19-20% to US $7.2 billion in 2014. This, considering that the growth rate of the global IVD market is much less, has created much excitement among the vendors of IVD instruments and reagents in these countries. Attributing this growth to a variety of factors, Dr. Sushant Agrawal, Director – Laboratory Operations (S&W) and Head – Clinical and Specialised Chemistry at Super Religare Laboratories said that, “Advances in human genomics, proteomics, bioinformatics and microelectronics often blended with information and computer technology have led to a spurt in the global market for in-vitro diagnostic tests.”
Dynamics in India
Various reports state the Indian IVD market size at around US $300-400 million, accounting for only about 2-3% of the entire healthcare market in India. “The industry still struggles with explaining the value that diagnostics can bring to the healthcare system. As we know, 80% of all patient information includes some type of diagnostic testing, yet it only accounts for 3% of the overall healthcare expenses”, said Dr JS Suri, Medical Director, Dr Suri Lab and a well known pathologist in the country. IVD tests used either for the analysis of patient body fluids or tissue samples, are a source of objective information about the body and how it functions. Since this information is vitally important for clinical decision-making, the importance of IVD testing cannot be ignored and in future this fact will be one of the major drivers of growth in this industry.
“IVD products business in India is estimated to be less than US $300 million. I think a populous country like India should focus more on prevention and diagnostics”
Dr GSK Velu
The IVD market comprises of several segments that contribute to the overall growth. According to Dr Agrawal, “In India, IVD instrument and reagents market value is estimated to be around `19 billion. Chemistry and immunochemistry together constitute roughly about 70% of this market, while hematology, coagulation and flow cytometry constitute about 15%. Microbiology, molecular biology and histopathology contribute 3% each to the market share.”
He further adds that, “The market is anticipated to grow at a CAGR of around 15-18% over the next 2 years, against the backdrop of 7-9% CAGR for global IVD market.” Dr OP Manchanda, CEO, Dr Lal PathLabs said that, “The Indian diagnostics market is growing at around 15% CAGR and this trend is likely to continue through the next decade as well, keeping all indices in mind. Molecular diagnostics is growing at an even faster pace of about 25%.”
Chemistry and immunology form the biggest segments in the overall IVD market. Other key segments include heamotology and coagulation; while molecular biology is one of the fastest growing and most upcoming segments.
“IVD is an underrated, undervalued industry, unlike pharmaceutical and therapeutic medical-devices that tend to garner most of the mainstream media’s attention”
Dr Jaspal Singh Suri
Dr Suri Lab
Growth in Indian healthcare market is coming from all possible sources. “Increasing urbanisation with its related stress levels, unhealthy diets and growing sedentary lifestyle has led to rapidly increasing prence of lifestyle-related diseases like diabetes and cardiovascular diseases in the country,” says Dr Agrawal. He further adds that, “There is a positive movement towards a proactive interest in health by way of growth in employer driven healthcare initiative, increase in paying capacity of families, active media promotion, insurance companies conducting pre-insurance policy check and awareness of prevention with early intervention.” Attributing growth in the IVD market to various factors, Dr Manchanda said that, “At present, one major driving force in this respect is the basic demographic change in India, the migration to urban cities, with more and more people having access to modern healthcare. The rising level of awareness along with rising per capita income is driving the demand for healthcare. The impetus is provided by the increasing investments in hospitals and clinical laboratories. But this scenario is all set for a change with the medical fraternity looking toward development of the rural sector as well.”
Talking about the growth opportunities in India, Dr GSK Velu, Managing Director of Trivitron and Metropolis Healthcare, said that “Both through Trivitron and Metropolis we are finding ways to make quality and reliable laboratory diagnosis more affordable and accessible to larger section of the population in India. India also has the potential to become a large global R&D base and manufacturing destination due to its inherent vibrant pharma industry and has the potential to become a large scale global hub for clinical trials central lab testing segment. These opportunities will propel growth opportunities in excess of 25% CAGR for both services and product segment for the next five years.”
He further added, “The opportunities in government segment will grow as the government is investing in diagnosis beyond Infectious diseases focusing on cardiovascular diseases, cancer and diabetes. Hence IVD is one of the largest growth opportunity within the healthcare segment in India.”
Reports predict consistent growth in the Indian IVD market in the coming years. Growing awareness among people about better healthcare services may be one of the reasons. Moreover, there is an increase in the urban population, as more and more people are moving from rural to urban areas. Availability of better healthcare services in the urban areas allows these people to opt for the best healthcare services – in-vitro diagnostic testing being one of them. The constant rise in India’s population is only creating more demand for diagnostics. The boom in India’s economy is another major factor driving growth. An average growth of 8-9% has been maintained in India, all through the 2000s, which has for obvious reasons had a positive effect on market growth. Even a couple of years back, while on one hand, major industries across the globe were facing rough times because of the global meltdown, growth in the healthcare industry on the other hand, remained unaffected by the recessionary trends. This was a positive sign for the entire healthcare market including IVD.
“With 90% of market share, the unorganised laboratories are growing at the rate of 10-15%, while the organised corporate chains are growing at a much faster rate of 25-30%”
Metropolis Health Services
Another recent trend in India has been the growth in medical tourism. There has been a spur in the number of world-class corporate hospitals in India, in recent years. These hospitals are offering the best-in-class quality healthcare at much affordable costs. As a result of this, patients from all across the world travel to India to avail healthcare services at these centres of excellence. This has only added up to the market growth in recent years, with all major hospitals becoming healthcare delivery centres for many international patients. Indian patients, on the other hand, are turning to healthcare insurance for securing their healthcare expenses.
As private health insurance coverage expands rapidly, there will be a fair rise in IVD testing as empanelled hospitals and healthcare delivery centres would be compelled to provide the best quality healthcare, for which IVD testing is extremely crucial.
There has been a steep rise in the number of clinical and diagnostic laboratories over the past few years in the country. These laboratories, being the main service providers in the diagnostic segment, are fuelling growth in a big way. For instance, the number of automated chemistry laboratories, have 700 in 2004, to 1800 in 2010. And this is just one small segment of the complete spectrum. Laboratories across the country are growing at a phenomenal rate of 30-35%. Big laboratory chains such as SRL Ranbaxy, Dr Lal’s PathLabs, and Metropolis; stand-alone laboratories; hospital laboratories and independent laboratories, all form a part of this growth. The growth in laboratory and IVD market being interrelated, the growth in IVD is happening as a result of the growth in the laboratory market.
Talking about the recent trends in the industry, Dr Suri said that, “Some of the major developments within this very important industry during the past 15 years include increased automation, enhanced workflow, better product quality, and the discovery and commercialisation of PCR.” He added, “At the same time, market fragmentation and clinical utility of lab tests continue to pose challenges.”
“Super Religare Laboratories, initiated the concept of having wellness centers along with traditional pathology labs in India. We now have more than 105 laboratories across India”
Dr. Sushant Agrawal
Director – Laboratory Operations (S&W) and Head – Clinical and Specialised Chemistry
Super Religare Laboratories
The IVD industry has adopted automation in a big way over the last decade. Sharing his views on the evolving trend of lab automation, Dr Manchanda said, “As lab automation continues to evolve, the drive or thrust for smaller, faster, and more-accessible devices is increasing. Emerging markets have different needs with respect to the test menus, technologies used, and operating procedures. Thus, made to order solutions need to be developed for these markets.” He further added that, “Lab automation has also taken on a new level of importance in the ability to actually get instruments interfaced to various laboratory information systems. Information technology has taken a giant leap in the IVD industry.”
Sharing his thoughts on automation, Dr Suri said that, “One of the most notable changes in the recent years has been in automation. Who would havethought robotics, sample prep, and sample in/result out would be standard instrumentation in most laboratories?” Talking about its benefits, he added that, “Its commonplace to see chemistry, immunoassay, and hematology instrument lines in the laboratory. Automation has increased efficiencies, reduced human error, and helped to revolutionise laboratory medicine. Given the aging population and scarce laboratory resources, it will continue to play an important role in years to come.” With the rapid increase in the amount of workflow in the past few years, automation has helped immensely in maintaining efficient workflows. According to Dr Suri, “Given that laboratories see volume increases of 10-15% every year, automation has proved to be the most important thing; because without automation and improv ment in workflow, physicians would become very frustrated, especially in this country, where the volumes are increasing the most.” He also believes that lab tests have been able to expand in such a big way because of automation, as the problem of manpower shortage has been overcome with the help of improved automated solutions.
“Delivering the right data in a timely and cost effective manner while improving the sensitivity and specificity of the test is the need of the hour and the industry needs to gear up for single workstations that can carry multiple workloads”
Dr OP Manchanda
Dr Lal PathLabs
In addition to automation, another trend that has caught up recently is point-of-care testing (POCT). Research suggests that introduction or POCT decreases the turnaround time in a laboratory by as much as 87%. Though the industry has struggled to develop POCT instruments, yet, the benefits achieved have been phenomenal. Throwing light on this aspect, Dr Agrawal said that, “Last 2-3 years have seen major consolidation happening among global IVD players in India. For example Siemens bought Dade Behring, DPC and Bayer Diagnostics tied up, Beckman Coulter bought Olympus Diagnostic division and Roche bought AVL.” The global players have become increasingly aggressive in this industry, which is an indicator of the hoard of opportunities IVD presents in India. The future, as obvious, has much in store for the various members of this industry. The positive trend and growth is likely to continue making IVD, a crucial segment, both in terms of volume and value.