Evolving landscape of in-vitro diagnostics – Insights and projections for the next decade

In-vitro diagnostics (IVD) has gradually become an important element of the global healthcare ecosystem. It is majorly due to its crucial role in diagnosing and managing various diseases. This advancement in medical technology is led by the increasing demand for early diagnosis and efficient treatment plans. The rising aging population, rising health awareness, and supportive government initiatives are further expanding the IVD sector in India.

The ongoing advancements are further adding thrust to the IVD sector; as per Kalorama, India’s IVD market is forecasted to increase at a CAGR of 2.4 percent from 2022 to 2027.

Role of government regulations in shaping the IVD landscape
Government regulations and initiatives are aimed at enhancing healthcare infrastructure and encouraging domestic manufacturing. For instance, the Indian government’s Atmanirbhar Bharat and Make in India initiatives have been major promoters of the development and manufacturing of diagnostic kits in India. However, the productionlinked incentive (PLI) scheme, with specific provisions for the MedTech industry, offers a more direct financial responsibility for companies to manufacture medical devices within India’s borders.

Moreover, the implementation of the Medical Devices Rules 2017 and the Medical Devices (Amendment) Rules 2020 has brought much-needed clarity and uniformity to the regulatory landscape governing this sector. While these regulations aim to streamline the approval process for medical devices and IVDs, making it more transparent, the Central Drugs Standard Control Organization (CDSCO) plays a crucial role in ensuring that products meet the requisite quality and safety standards. To effectively navigate these regulatory changes, companies are increasingly integrating compliance into the early stages of product development and investing in regulatory expertise. At the same time, crucial regulatory reforms have been implemented in the country to improve the efficiency and effectiveness of diagnostic services. These changes include partnerships between government bodies like the Indian Council of Medical Research (ICMR) and private entities, such as Redcliffe Labs to drive innovation and enhance service delivery in the IVD sector, transitioning toward a more collaborative regulatory approach.

Import policies and international trade dynamics
The Indian government’s import policies also play a crucial role in shaping the IVD market. For instance, the 5 percent ad valorem tax on medical devices, raising custom duty by 10–15 percent on certain devices, and banning used medical equipment are steps toward promoting local production in the medical industry. At the core, import policies affect the availability and cost of IVD products, influencing company strategies regarding local manufacturing versus imports.

Government spending and investment trends
India’s National Health Policy, 2017, emphasizes preventive and promotive healthcare and recommends increasing health expenditures from 1.2 percent to 2.5 percent of GDP by 2025. This is a progressive trajectory. Keeping citizens’ health in focus, the interim budget 2024 increased total healthcare expenditure from ₹79,221 crore to ₹90,171 crore. When it comes to investment targets, certain areas in the IVD sector are growing exponentially. POCT and home testing are witnessing increased demand, especially from consumers. Advancements in digital health technology complement POC testing by enabling remote patient monitoring. Next-generation sequencing (NGS) and cancer testing technologies, including in situ hybridization, molecular cancer markers, immunohistochemistry, and HPV molecular testing, are among the fastest-growing segments.

Emerging technologies and research initiatives
The IVD industry’s frontline role during the pandemic led to a surge in demand for polymerase chain reaction (PCR), NGS, and serology-based rapid testing products. Consequently, the market has witnessed advancements in areas, such as microfluidic technologies microarrays and an increased significance of precision medicine, including companion diagnostics and multiplex testing, which will present substantial growth opportunities.

Research initiatives, focused on enhancing accurate and accessible technologies, are likely to elevate the industry’s future landscape.

Forecasts for the IVD market
The Indian IVD market is expected to continue its rapid growth, with a forecasted CAGR of approximately 2.5 percent over the next five years. This growth is fueled by an increasing focus on healthcare infrastructure and an aging population susceptible to chronic diseases. Also, artificial intelligence (AI), biosensors, microfluidics, software-as-medical-devices, liquid biopsies, NGS, CRISPR-based diagnostics, microarrays, multiplex assays, digital pathology, and wearable devices hold great potential in the IVD landscape.

Additionally, POC testing will continue to remain in high demand since its amplification by the Covid-19 pandemic. Despite the promising growth prospects, challenges, such as integrating advanced technologies with existing healthcare systems and navigating a complex regulatory framework remain. IVD accounts for only 2 percent of global healthcare expenditures despite being critical for 70 percent of clinical decision making, treatment, and prognosis. It holds a critical place in the healthcare ecosystem. While the demand for healthcare continues to grow, a shortage of workforce and cost constraints create a hindrance. Addressing these challenges effectively will be key to leveraging the full potential of the IVD industry.

The road ahead
India’s IVD industry holds great potential, with the market size expected to grow from USD 1.71 billion in 2024 to USD 2.34 billion by 2029. This growth of 6.5-percent CAGR during the forecast period will be driven by the opportunities for substantial growth and innovation in the sector.