Resilient IVD industry forges ahead

The resilient IVD industry has weathered the pandemic and is forging ahead with new technologies and increased opportunities that will sustain market growth through the foreseeable future.

In vitro diagnostics (IVD) remain dynamic. The IVD market is a high R&D spend industry with constant innovations and routine interest from venture capital firms in diagnostic products.

The pandemic impacted the world economy and created uncertainty in the stock market, and affected supply chains all over the world. However, the IVD testing market was centerstage for the fight against coronavirus. IVD products have seen a rebound year-over-year (YoY) and are now seeing solid growth.

New products, changes in global health spending, regulatory changes in major markets, and disease trends are among the factors that produce a constantly changing market picture for this resilient industry. There are some growing segments in the market that have attracted industry attention. Among these are POCT, next-general sequencing (NGS), cancer testing, and companion diagnostic technologies. Immunochemistry and molecular diagnostics are also segments of great market interest, anticipated to be a big part of the future of IVD.

Indian market dynamics
The Indian IVD industry stands at the precipice of a significant transformation. The integration of advanced technologies, the shift toward preventive healthcare, and supportive government policies present considerable opportunities for growth.

In 2022, the Indian IVD market is estimated at ₹11,200 crore, poised to see a CAGR of 2.5 percent over the next five years. Aging population, increasing diseases with enhanced lifestyle, leading to obesity and a more sedentary living and government initiatives and support for better health solutions and technologies are the key drivers. That said, the regulatory process continues to be complex.

The Indian government’s focus on strengthening the healthcare infrastructure, and the Make in India initiative is providing the requisite impetus to domestic manufacturing, and to the various startups. Atmanirbhar Bharat initiative also extends support to the IVD industry. It incentivizes research and development (R&D) and manufacturing of diagnostic kits within the country.

Another noteworthy initiative is public-private partnership (PPP). This model allows the government to collaborate with private entities to increase innovation, efficiency, and service delivery in the IVD sector. PPPs can focus on building advanced diagnostic centers that will enhance the accuracy and speed of diagnosis and improve healthcare delivery. There is a growing demand for specialized diagnostic services in cancer screening, genetic testing, and infectious diseases. PPPs can play a crucial role in creating specialized diagnostic centers.

IVD is quickly expanding in Tier-II and Tier-III cities. Many states are making rapid strides with concerted investments into rural healthcare development.

Global market scenario
The global IVD test market is estimated at USD 106 billion in 2023 and is expected to grow 3.8 percent annually through 2028, according to an August 2023 Kalorama report.

In 2022, the top IVD companies accounted for about USD 101 billion of IVD product sales, compared to USD 97 billion in 2021 and USD 47 billion in 2016. This represents an approximately 13.7-percent increase in top-tier revenues for 2016−2022.

The top 10 companies have 62 percent of the overall IVD market. Abbott has been leading in immunoassays, while Roche has led in molecular testing. For the first time, Abbott Diagnostics now leads the IVD market, according to Kalorama. In the last report, the top position was tied between Roche and Abbott. It may be attributed to Abbott’s position in point-of-care testing (POCT) from its Alere acquisition, the pandemic, and glucose test sales. Other growth areas include drugs of abuse, immunoassays, cardiac markers, fecal occult blood, HbA1c POCT, tests for inherited diseases, and molecular testing for organ transplants.

Covid testing is declining, but it will not go away.
Covid testing still will be a significant dollar contributor to the market. Over-the-counter antigen testing will continue to drive sales. Patients have a lower threshold for what drives them to get tested now. The SARS-CoV-2 testing market, combined with testing for influenza, will end up being two to three times the traditional flu testing market. Mini-panels, which include testing for SARS-CoV-2, flu, and respiratory syncytial virus (RSV), will help drive growth in this market.

IVD’s pandemic frontline position led to a flurry of demand for polymerase chain reaction (PCR), NGS, and serology-based rapid-test products. As a result, the market has opened several new areas of advancements, including microfluidic technologies, microarrays, and a growing significance of precision medicine, including companion diagnostics and multiplex testing that will target significant growth opportunities. In addition, new products, changes in global health spending, regulatory changes in major markets, and disease trends are among the factors that produce a constantly changing market picture.

Covid-19 reinforced rather than broke the consolidation trend in IVD companies. The pandemic brought a host of new, smaller companies – yet larger companies had the distribution and production capacity, as well as credibility with labs. Large non-conventional companies entered IVD in some form or the other including Amazon, Pfizer, Eli Lilly, Ford, and Mayo Clinic. The market also found many well-known life science names, such as Sherlock, Wuxi, Promega, Agena Biosciences, Guardant, Exact Sciences, and Biocept, moving quickly from oncology operations to jumping on infectious disease testing due to the virus. Imaging player Fujifilm even entered IVD with an acquisition related to the pandemic. And this still does not account for the hundreds of companies that specialize in specific test segments or serve their local markets.

Preventive healthcare and early diagnosis is a recent trend, fast gaining popularity.

Generative AI is transforming the diagnostics industry by enabling the development of innovative diagnostic tools. These tools leverage advanced algorithms to interpret complex test results and provide accurate diagnoses for infectious diseases to cancer.

There are also some growing segments in the market that have attracted industry attention. There is an increased demand for POCT, in particular at the consumer level, and home testing is fast gaining preference. Further advancements in digital health technology can complement POCT, enabling remote monitoring and digital tracking of patient health data.

Others are next-generation sequencing (NGS) and cancer testing technologies. Cancer testing is among one of the fastest growing segments, with in situ hybridization, molecular cancer markers, immunohistochemistry, and HPV molecular testing among the strongest growth areas.

Immunochemistry, mass spectrometry, gene testing, and molecular diagnostics (MDx) are also segments of great market interest, and are anticipated to be a major part of the future of IVD.

MDx is continuing its upward trajectory as laboratories that adopted platforms for SARS-CoV-2 PCR testing can now use those platforms for other types of molecular testing. Non-SARS-CoV-2 MDx will grow by the mid to high-single digits annually over the next few years.

By technology, the global IVD market is segmented into immunoassays, clinical chemistry, molecular diagnostics, hematology, microbiology, and others. The immunoassays segment registered the fastest revenue growth rate in the global IVD market in 2022. This is due to the rising prevalence of chronic diseases and aging population. This technology has become quite popular in the recent years because of their excellent sensitivity and specificity, which enable early identification of many diseases. Diagnosis of autoimmune illnesses, cancer, cardiovascular diseases (CVDs), and infectious diseases is frequently done using immunoassay technology.

The MDx segment is expected to account for considerably large revenue share in the global IVD market. This is due to the availability of NGS technologies and technical developments in the field of genomics. With the help of this technology, genetic mutations and other molecular changes linked to numerous diseases can now be found. This makes it possible to identify illnesses, such as cancer, infectious infections, and genetic problems early and to treat them specifically. In addition, rising demand for targeted therapeutics and trend of precision medicine is also expected to drive revenue growth of this segment.

The hematology segment is expected to register a moderately fast revenue growth in the global IVD market during the forecast period. This is due to the development of sophisticated hematology analyzers and rising demand for POCT equipment. Anemia, leukemia, and lymphoma are just a few examples of the many blood illnesses that may be diagnosed and tracked with hematology technology. In addition, rising frequency of blood disorders, particularly in older population, is also expected to drive revenue growth of this segment.

Mass spectrometry, which can offer higher accuracy than immunoassays, continues to be an important part of the market, and not just for microbiology. The segment is expected to have a CAGR of 14 percent over the next five years and exceed a billion dollars by 2027. Drivers in this area include HbA1c testing, vitamin D testing, and companion diagnostics. Automation also is helping drive growth in mass spectrometry. Thermo Fisher Scientific’s Cascadion analyzer, for instance, gives labs more ability to perform testing. There are a lot of benefits to mass spectrometry, such as specificity and multiplexing that will override some of the technical challenges, particularly with automation in place. It is being used to test difficult-to-measure analytes, such as estradiol, which is a complex molecule not measured well by immunoassay, and in therapeutic drug monitoring.

The continuous glucose monitoring (CGM) market also is experiencing a rapid growth, with a CAGR of 6.6 percent between 2021 and 2027, according to Research and Markets. More and more people are coming into the diabetes or pre-diabetes fold. The CGM market is highly competitive, with only a few companies competing. Abbott, Roche, Tandem Diabetes Care, Dexcom, and Senseonics are among the biggest players.

So far, the reagents and kits segment accounted for largest revenue share in the global IVD market. However, over the next couple of years, the instruments segment is expected to register a significantly fast revenue growth rate. This is because of diagnostic laboratories using automation and robots more frequently, which enhances test findings’ efficiency, precision, and reproducibility. The need for advanced and complex instruments is also increasing as NGS platforms, flow cytometers, and mass spectrometers enable high-throughput analysis of more samples in a shorter amount of time. In addition, development of new diagnostic techniques, such as liquid biopsy and pathology, is opening up new markets for IVD instrument producers and is also expected to drive revenue growth of this segment.

The software and services segment is also expected to account for a considerably large revenue share in the global IVD market during the forecast period. This is because diagnostic laboratories are increasingly in need of data management and analysis solutions and are placing a greater emphasis on quality control and legal compliance. Software solutions, such as laboratory information management systems (LIMS), electronic health records (EHRs), and data analytics platforms are becoming more crucial. New technologies, such as artificial intelligence (AI), quantum computing, and supercomputing could help deliver safer and more sustainable chemicals and materials by design.

The IVD industry can mobilize several partnership models around public-private partnerships, collaborations between companies in the same sector, and partnerships with non-governmental organizations.

These partnerships foster sustainable development while enabling the widest possible access to in vitro diagnostics. For example, Bio-Rad Laboratories and Sartorius Biotech have developed locally produced Covid-19 test kits using less plastic. Abbott and the Bill & Melinda Gates Foundation have deployed the Pima portable diagnostic system for malaria in several countries in East Africa, Southeast Asia, and Latin America.

The IVD industry has a significant environmental impact due to the generation of biomedical and chemical waste, the use of toxic chemicals, and the consumption of energy to produce and use diagnostic equipment. According to a study published in the journal Environmental Science & Technology, the medical diagnostics industry generates 5.4 million tons of waste each year, the majority of which is made up of plastics. In addition, chemicals used in diagnostic tests, such as organic solvents, acids, and bases can be harmful to the environment. And can lead to soil and water contamination as well as greenhouse gas emissions.

The sustainable development of the IVD industry requires diagnostic tests to have a low environmental impact. The use of recyclable materials for IVD test packaging and components continues to grow. According to the recent Grand View research study, the global medical device packaging market size was valued at €27.61 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 6.4 percent from 2020 to 2028 to €45.41 billion in 2028.

Eco-design technologies are not to be outdone. There are currently three main trends. First, the use of bio-based and biodegradable materials, such as corn starch, polylactic acid, cellulose, and chitosan, aims to reduce the environmental impact of plastic waste. Secondly, microfabrication processes, such as deep immersion lithography and 4D printing, are used to reduce energy consumption in the production of IVD devices. Lastly, the development of portable and rechargeable diagnostic systems reduces the amount of waste generated by disposable consumables.

Government regulations

• Food and Drug Administration (FDA) regulates safety and efficacy of all in vitro diagnostics used in clinical settings in the US under the Federal Food, Drug, and Cosmetic Act.
  • The Centers for Medicare & Medicaid Services sets standards for laboratories performing tests covered by Medicare or Medicaid, including those using IVDs.
  • The Clinical Laboratory Improvement Amendments set standards for laboratory quality management systems for testing, performed using IVDs in clinical laboratories.
  • The EU In Vitro Diagnostics Regulation (IVDR) sets standards for safety and performance of all IVDs, used in clinical settings in the European Union (EU).
  • The Global Harmonization Task Force provides guidance on standardizing regulatory requirements for medical devices, including IVDs, across countries.
  • The International Organization for Standardization publishes standards related to medical device quality management systems, including those for IVDs.
  • The ISO/IEC 17025 standard sets requirements for competence of medical laboratories, including those performing tests using IVDs.
  • The Organization for Economic Cooperation and Development provides guidance on safety and performance standards related to in vitro diagnostic devices used in clinical settings.
  • The World Health Organization provides recommendations on international harmonization of regulation of medical devices, including IVDs, as well as guidance on their use in low-resource settings.
  • The International Medical Device Regulators Forum serves as a collaborative platform to facilitate multi-country regulatory convergence activities related to medical devices, including IVDs.

Over the next decade, a number of trends will shape the IVD market from increased participation by non-US countries to increased collaboration between companies and evolution of sampling methods, says a Kalorama report.

Regions of market influence. Korea and China are slated for higher overall growth in IVD. The Chinese market for IVDs is estimated at nearly USD 6.6 billion and is expected to show annual growth of 3.8 percent to reach USD 7.9 billion in 2027. Glucose monitoring is a major focus area for the Chinese IVD market, representing roughly 25 percent of the market’s value. South Korea, which in 2020 initiated a fast-track procedure for international patients with severe illnesses, has shown tremendous growth in medical tourism. The IVD market in South Korea is considered favorable for its regulatory process and foreign investment opportunities. Kalorama estimates the IVD market in Korea to be USD 545 million in 2022, with 5.8 percent annual growth, reaching nearly USD 721 million by 2027.

Collaborations and acquisitions. The future of the industry lies in the development of more sensitive, faster, user-friendly, information technology-capable devices for a host of new protein and molecular markers. No company owns all the technology needed to develop these new tests and systems. Thus, many companies are acquiring other IVD manufacturers to shore up their research and development. For example, in February 2022, BD, looking to broaden its flow cytometry segment for hematologic cancer and blood diseases, acquired Cytognos. In April 2022, bioMérieux acquired Specific Diagnostics to add to its critical infection sepsis line, and in June 2022, Fujirebio acquired ADx NeuroSciences, and Qiagen acquired Blirt for additional growth in reagents.

New sample methods. Tests using blood, nasal fluid, and tissue dominate the IVD market, but the search for easier-to-collect samples continues. The pandemic and the need for rapid, reliable testing has heightened interest in saliva as a convenient medium for infectious diseases. Recent studies have shown that saliva is just as effective as a nasopharyngeal swab for traditional SARS-CoV-2 PCR tests and useful in at-home rapid antigen tests. The Food and Drug Administration had issued more than 30 emergency use authorizations for saliva-based SARS-CoV-2 tests. Saliva is also increasingly being used to diagnose diseases affecting the mouth, esophagus, stomach, large and small intestines, kidney, and liver.

There is also work being done in using breath and capillary blood for diagnostic testing. Patient-focused testing services, such as Everlywell, Everly Health, and LetsGetChecked, are driving the market for finger-prick sample collection.

As the global population ages and new testing methods are developed, the worldwide IVD market will continue to grow. But which areas will grow the fastest will depend on a number of key factors, including potential future pandemics, lifestyle trends that might have an impact on chronic diseases, and consumer demand.

Each segment of IVD is witnessing automation and technological advancements that enhance accuracy, efficiency, and data management. Overall, there are no signs of a slowdown in innovation. These innovations hold the potential to revolutionize healthcare by enabling earlier disease detection and the development of more personalized treatment strategies are ushering in a new era of precision and efficiency in diagnostic methods.

The future of IVD holds great promise, particularly in conjunction with AI and machine learning, enabling seamless integration, patient-specific models, remote monitoring, and ethical considerations to ensure a responsible and impactful use. As IVD continues to evolve, it will play a pivotal role in shaping the future of healthcare, improving patient outcomes, and advancing medical research.

There is a growing demand for specialized diagnostic services in cancer screening, genetic testing, and infectious diseases. PPPs can play a crucial role in creating specialized diagnostic centers. Uttar Pradesh and Madhya Pradesh Dx testing schemes have worked well for years, and could serve as a model.

IVD is quickly expanding in Tier-II and Tier-III cities. Many states are making rapid strides with concerted investments in rural healthcare development.

By segment, chemistry is expected to expand at low-double digits while CLIA at high-double digits due to the rising disease incidence and biomarker testing needs, especially in cancer biomarkers. Mindray, Sysmex, Autobio, and Agappe are four new CLIA competitors that are challenging the two-decade-old MNC monopoly with advanced systems. Currently, the market size for 3-part hematology analyzers is high. However, growth is seen from the 5-part hematology analyzers that are primarily being imported, with competitive pricing playing an important part, giving impetus to the Chinese brands. The Make in India initiative may provide the requisite impetus.

India continues to lack quality standards for labs. Only 2400 of the 100,000 labs have NABL certification. A strong regulatory authority is needed to regulate lab proliferation, and set quality standards for current and new labs in the country.

IVD ecosystems for local manufacturing and sustainable pricing for suppliers can be a game changer for this industry.