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IVD players – On a path to adapt and innovate

As we look ahead to 2024, poised for remarkable growth, the IVD market stands at the crossroads of innovation and expansion.

In vitro diagnostics (IVD) is a critical sector within the healthcare industry, playing a pivotal role in disease detection, monitoring, and management.

Automation
Integrating automation technologies and digital solutions in the IVD industry significantly enhances laboratory services and streamlines diagnostic workflows. Every lab discipline has incorporated some form of automation. A fully automated laboratory loads samples into racks, transports them to, and then loads onto or off analyzers, and stores them for further processing – all without the human touch. All analyzers are linked together physically by sample conveyor systems and electronically by a laboratory information system.

In the core lab, the trend is to more and more consolidate clinical chemistry, immunoassays, infectious diseases, and blood and plasma screening, hematology, cytology, and molecular diagnostics – all on a single modular automated solution. The first target for this advanced automation strategy is large hospitals and reference labs. However, with modular adjustments, even smaller institutions could modify their core labs to be more multidisciplinary.

Hematology automation has become more and more sophisticated over the years. Advances, such as the introduction of needles through the stopper technology, an extended 5-part cell differential for cell morphology, and instrumentation that combines cell analysis with integrated slide-making staining technologies permit hematology to be included in track-based lab automation since they eliminate operator intervention. Vendors offer high-end instrumentation with the same features and have also expanded the menu of blood cell-based tests available on the instruments.

Fully digital hematology is gaining popularity. The instrument addresses the entire core lab hematology station workflow – slide making; slide staining; complete blood count; differentials; and streamlined, software-assisted manual review of slides, stained, and imaged cells. Following processing, a comprehensive set of results is provided to medical technologists through an integrated, interactive display system that features cell galleries that sort white blood cells, red blood cells, and platelets. The system also isolates unclassified cells of interest and presents them for classification.

An integrated hematology analyzer combines a digital morphology analyzer, cell counter, and classifier into one streamlined instrument, preparing, staining and analyzing microscopy blood slides. The analyzer counts, identifies, isolates and categorizes white blood cells, red blood cells, and platelets, and presents the digital images of all these cell types on the viewing station including a standard CBC and 5-part differential.

The major microbiology companies have recognized the potential of full microbiology automation and liquid microbiology. The vendors have moved to faster, more standardized ID/AST testing. All the pre-analytical steps are automated – the technician opens the vial; removes liquid containing microorganisms; transfers the liquid to solid and or liquid growth media that is dictated by the type of sample and analysis required; incubates the media; and processes positive samples for ID/AST analysis. Automatic planting and streaking of all microbiology samples is possible. The system de-caps, plants, streaks, and recaps specimens in seconds. Systems offer standardized and scalable automated solutions for inoculation, incubation, plate imaging, culture reading, and result reporting. With a high-resolution industrial camera and different LED light sources, automatic dynamic digital imaging and individual plate storage are combined. Workflow of the microbiology laboratory, from sample reception and distribution, organism identification, and antimicrobial resistance analysis to result management and interpretation is now streamlined.

Although microbiologic culture is a standard method for detecting pathogens, this technique may take days to weeks. Mass spectrometry for microbiological analyses is resorted to then. All the major microbiology companies have joined the mass spec revolution.

PCR proved to be the major building block of modern molecular testing, accelerated by the onset of Covid-19. Molecular diagnostic tests directly target infectious agents, such as bacteria and viruses, by utilizing DNA and RNA probes that recognize the genetic signature of the bacterial and viral agents. Every modern automated molecular test platform allows automated DNA and RNA extraction from blood and other body fluids.

Robotics are contributing to optimizing laboratory workflows, enhancing efficiency, and reducing turnaround times. Automated IVD systems improve throughput, minimize errors, and alleviate labor-intensive tasks, thereby increasing productivity and standardizing testing procedures.

Point of care
IVD technologies were only applied in clinical labs in the past. Most clinical chemistry, immunochemistry, and hematology tests continue to be carried out with high-throughput equipment with complex automation. However, point-of-care (POC) testing is expanding to meet the demand for quick diagnosis of infectious and chronic diseases near where the patients are located, or being treated.

Key players are concentrating on releasing quick, portable, transportable, compact, and easy-to-use instruments that can be used outside lab settings.

Furthermore, the demand for complex diagnostic technologies is fuelled by the shift toward personalized medicine, which customizes treatment based on a patient’s unique characteristics. POC testing is essential in supplying real-time patient data that enables individualized treatment choices.

In vitro diagnostics are now being utilized beyond traditional applications. The use of IVD for diagnosing potential head trauma in sports or aiding in the diagnosis of depression is becoming a reality. Genetic tests, despite some caution from medical societies and governments, are experiencing revenue growth.

The adoption of mass spectrometry, once limited to a few university hospitals, has expanded into advanced microbiology systems, diabetes testing, and vitamin C tests. Cancer testing, although overshadowed by the Covid-19 pandemic, continues to thrive. Revenue segments, related to cancer testing, including in situ hybridization tissue DNA tests, blood tests for molecular cancer markers, immunohistochemistry, and HPV molecular tests, are among the fastest growing.

Additionally, drug-of-abuse tests, cardiac markers, fecal occult blood tests, glucose tests, inherited disease tests, and molecular tests for organ transplants are expected to show greater than average growth.

The growing need for genetic testing for personalized healthcare, diabetes, and cancer is propelling the market. Furthermore, the growth of condition-specific tests, the increasing importance of companion diagnostics as well as emerging economies are anticipated to show growth opportunities for players operating in the market. Enhanced and well-organized diagnostic tools, technological advancement in healthcare and a surge in over-the-counter tests are projected to witness growth in the IVD market.

Additionally, integrating artificial intelligence (AI) and machine learning (ML) is another key trend in the IVD market. Combining AI and ML technologies in the IVD market enhances diagnostic accuracy, efficiency, and predictive capabilities. AI and ML algorithms can analyze large volumes of patient data, identify patterns, and generate insights to support clinical decision making.

Global market
The global IVD market in terms of revenue is estimated to be worth USD 100 billion in 2023 and is set to register a CAGR of 2.2 percent from 2024 to 2029. By product, the reagents segment held a revenue share of 66 percent in 2023.

Global IVD market
By application (USD million)
Application 2023 2024 2030 2033
Infectious Diseases 56,833.27 53,602.44 60,087.79 65,040.56
Diabetes 8,475.36 7,969.48 8,773.47 9,413.33
Oncology 8,323.38 8,055.14 10,539.60 12,286.80
Cardiology 8,538.03 8,125.43 9,613.65 10,681.34
Nephrology 6,127.88 5,744.71 6,210.48 6,604.62
Autoimmune Diseases 4,987.83 4,718.45 5,385.65 5,880.83
Drug Testing 3,757.30 3,593.52 4,380.20 4,936.78
Others 10,724.14 10,239.92 12,189.51 13,482.71
Precedence Research

By segment, blood, serum, and plasma segment accounted for the largest share of the IVD market in 2023. The significant share of the segment can be attributed to the growing number of blood donations. Also, blood is the most widely collected sample for IVD diagnostic procedures, and these are preferred for overall health screening as they provide information on various health parameters.

Molecular diagnosis and immunoassay accounted for the largest revenue share in 2023. The increasing incidence of chronic and communicable diseases and the rising need for early diagnosis are among the key factors leading to an increase in demand for immunological methods, including different types of enzyme-linked immunosorbent assays (ELISAs). Moreover, key players are focused on R&D for the development of new immunological diagnostic instruments and tests for IVD applications. Molecular diagnostics is expected to show the fastest growth.

The coagulation segment is growing. The segment can be attributed to the increasing prevalence of cardiovascular diseases, blood-related disorders, and autoimmune diseases.

Global IVD market
By technology (USD million)
Technology 2023 2024 2030 2033
Immunoassay 32,433.72 30,774.22 35,763.42 39,393.04
Hematology 6,345.41 5,984.69 6,708.77 7,261.75
Clinical Chemistry 18,978.14 18,061.02 21,369.00 23,742.24
Molecular
Diagnosis
35,662.26 33,736.25 38,506.63 42,047.11
Coagulation 4,328.27 4,061.72 4,417.71 4,712.01
Microbiology 5,916.29 5,563.15 6,124.38 6,571.04
Others 4,103.12 3,868.03 4,290.43 4,599.77
Precedence Research

By application, the infectious diseases segment accounted for the highest revenue share of 53 percent in 2023. By end-uses, the laboratory segment has captured 38 percent revenue share in 2023.

North America, at a revenue share of 42 percent accounted for the largest share in the IVD market in 2023. Asia Pacific is anticipated to exhibit significant growth from 2024 to 2030. Major players in the IVD industry should expect growth opportunities from developing economies including India, Brazil, China, South Korea, Turkey, Russia, South Africa, and Mexico. This can be attributed to the high disease prevalence, large patient population, improved healthcare infrastructure, increasing disposable income, and growing medical tourism in these countries.

Global IVD market
By product type (USD million)
Product 2023 2024 2030 2033
Instruments 26,909.55 25,379.75 28,480.55 30,873.80
Reagents 70,996.28 67,404.76 78,539.13 86,554.20
Services 9,861.36 9,264.58 10,160.68 10,898.97
Precedence Research

Market leaders
The major players in this market are Roche Diagnostics, Abbott Laboratories, Danaher Corporation, Siemens Healthineers AG, and Thermo Fisher Scientific. Other market leaders include Beckman Coulter, BioMérieux, QuidelOrtho, Bio-Rad, Sysmex, Cepheid, Becton Dickinson and Mindray.

Results declared for 2023 reveal that Abbott’s diagnostics business declined by about 39 percent to USD 9.99 billion in sales in 2023. The difference was largely attributed to a decline in sales of Covid-19 tests.

In the fourth quarter, global Covid-19 testing sales of USD 288 million beat Wall Street’s forecast of USD 205 million. Rapid diagnostics were affected by a later flu season, which caused sales of respiratory tests to be lower in the fourth quarter, compared to the prior year. The company has received FDA approval for a new lab automation system, which it is currently selling internationally and plans to offer in the US.

Roche. With sales of CHF14.1 billion in 2023, the diagnostics division declined by 13 percent or minus CHF2.3 billion at a constant exchange rate versus the full year 2022. This decline is driven by the expected decline of Covid-19 testing sales of CHF3.3 billion at constant exchange and offset by strong base business growth of plus-7 percent.

In Q4, diagnostics delivered growth of plus-4 percent. It may be attributed to a CHF300-million government order for rapid antigen tests, which was reflected in the overall performance. With the return to growth, the lessened effect of Covid-19 testing and the strong performance of the base business are seen.

Looking forward, the vast majority of Covid-19 testing is expected to be PCR-based, with the majority of testing to be performed in a multiplex format as part of a standard diagnosis of respiratory disease. Some potential headwinds in China due to the ongoing government procurement initiatives are anticipated.

Siemens Healthineers. Diagnostics all-in revenue saw a decline due to the antigen contribution of €63 million in the prior year quarter. The adjusted EBIT margin of 5.1 percent was mainly driven by the savings from the ongoing transformation, resulting in a year-over-year margin expansion of 800 basis points ex antigen. The company is currently in the midst of a wider, independent restructuring of its diagnostic business. By September 2024, it intends to shutter its Luxembourg unit, which will lay off 90 employees that mainly provide PCR tests in Europe. Its decision is a result of a regular strategic review of portfolio contributions and market opportunity and is independent of the broader restructuring of the diagnostics business. As for continued restructuring of its diagnostic business, the company is on course of the still-ongoing broader restructuring, and cannot rule out further closures or layoffs. The restructuring is positively impacting revenue in the first quarter, and diagnostic sales grew 2 percent in Q1 when excluding sales of Covid-19 antigen tests.

The incidence of tropical diseases, such as zika, malaria, and chikungunya, has increased significantly, with South American nations accounting for the highest number of cases. However, the Asia-Pacific has emerged as an adaptive and business-friendly hub due to its relatively less stringent regulations and data requirements.

Currently, China is one of the largest investors in R&D. Moreover, various market players are strategically expanding their product portfolios across emerging countries through product launches and approvals, collaborations, and expansion. This will support the installation of diagnostic systems in laboratories and contribute to the adoption of IVD.

The low threat of substitute products and services, such as high-cost imaging methods, is supporting the market expansion. Using imaging tools to monitor health conditions to some extent can hamper the growth. However, IVD tests overcome the threat of substitutes due to their accuracy and cost-effectiveness.

The market is also characterized by a high level of merger and acquisition (M&A) activity by the leading players. They aim to expand their businesses in developing economies to increase their market share.

Challenges abound
Clinical laboratories across major markets are still evolving; technicians face operational challenges in ensuring effective sample procurement, storage, and transportation, especially while adopting novel technologies, such as NGS and lab-on-a-chip PCR devices. Laboratory space also needs to be reconfigured to meet the requirements of conducting specific diagnostic tests used for pathogen detection to avoid cross-contamination and ensure efficient time management. This results in considerable cost escalation to maintain and operate advanced molecular diagnostic instruments, particularly those capable of handling a single-sample type.

However, the shortage of skilled laboratory technicians to operate advanced diagnostic products has hindered the overall adoption of IVD, particularly in emerging markets. The high cost involved in IVD services may hamper the industry growth over the forecast period.

FDA
The complex regulatory landscape is one of the major hindrances to the growth of IVD market. New or modified devices must undergo a thorough FDA evaluation to ensure patient safety at the individual and community health levels. Regulations on IVD may restrict a newly developed IVD device from entering the market, which may incur huge losses to the manufacturer. Effectively categorizing a device is essential to avoid entering-market delays. Team members working on research and product development must know this to prevent going back to the drawing board. This is particularly true in the United States, where the FDA deliberately controls additional creativity on devices that have already received approval if the supporting evidence needs to be sufficiently futuristic.

For years now, the industry has been embattled over two key decisions facing US lawmakers and federal regulators. One is passing the Verifying Accurate Leading-Edge In Vitro Clinical Test Development (VALID) Act. The other is issuing the final rule granting the FDA greater power to regulate LDTs as medical devices.

As the debate over LDT oversight has persisted through the years, an unknown number of LDTs have come to market and are actively used in clinical practice. Many LDTs pose no problems, but some – especially those with a major impact on medical treatment decisions and patient safety – may be debatable depending on who you ask.

The industry has urged passing diagnostic regulatory reform, thereby ensuring competition based on quality and innovation not gaming out a bifurcated regulatory program. One key point is that no one knows how many LDTs are currently being used in the market. LDTs that are not subject to FDA regulations do not include a public repository of the data associated with how they operate.

In addition, the European Commission’s Directive 98/79/EC establishes legal requirements for producing and selling IVD products in the European Union. Investments made in R&D could be well-spent if the regulatory authority rejects approval due to the uncertainty surrounding the time frame needed to receive regulatory approval for some IVDs. The EU has universal standards for the planning and production of IVD products and technologies, including Restriction of Hazardous Substances (RoHS) and Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH).

Outlook
The IVD market’s dynamics in 2024 will be shaped by key factors, including the rise of personalized medicine, a surge in demand for POC diagnostics, and the emphasis on value-based healthcare. The IVD market’s expansion into emerging economies, driven by growing healthcare infrastructure and rising disposable incomes, adds another layer of dynamism to its landscape. While challenges loom, they also pave the way for opportunities, urging industry players to adapt, innovate, and contribute to the evolution of diagnostics in the years to come.

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