The IVD industry has seen immense progress. Major technological advancements and higher-efficiency systems have taken the sector to new heights. Advanced cutting-edge technologies are being used to understand disease prognosis, thereby strengthening the sophistication level of the participants in the sector.
In the last five decades, incredible innovations and technological developments have shaped how modern clinical laboratories are equipped, staffed, and operated. The aging population’s need for rapid diagnostic results, emergence and re-emergence of infectious diseases, and growing lifestyle disorders are expected to accelerate the IVD market. At the same time, the IVD market is constantly evolving. Megatrends such as consolidation, automation, and reimbursement policies impact every aspect of the market. The growing importance of diagnostics in patient care is expanding beyond hospitals and laboratories to homes, long-term and chronic care, and other segments in healthcare. Apart from the major trends, the growing digitization of healthcare enables a more efficient patient care continuum.
Among IVD segments, molecular diagnostics is a prominent one. Molecular diagnostics is an emerging segment in APAC, with companies facing stagnant growth in mature markets. The concept of pharmerging countries
is the next landing space for vendors. Significant rise in healthcare expenditure, universal coverage, aging population, and willingness to pay among consumers are key aspects for companies to focus on APAC region.
Another key component of IVD, point-of-care testing (PoCT), is gaining popularity with the growing need for rapid tests in emergency rooms, operating theaters, recovery rooms, cath labs, and intensive care units. Most companies are strengthening their R&D focus for the development of highly sensitive and reliable platforms to address the overwhelming global needs for IVD diagnostics.
It will be fascinating to follow how the clinical laboratory evolves and its operation impacts the practices of laboratory medicine and healthcare delivery.
Watch these trends unfold in 2020
Clinical medicine and MedTech. Clinical lab medicine is crucial to disease management. Essential diagnostic medical technologies including genome sequencing and mass spectrometry were unheard of in clinical practice several years ago. Personalized medicine, inherited diseases, pathogen detection, antibiotic-resistance testing, and blood banking exist because of medical technology innovation.
Diagnostic test marketers want to gain the support of newer diagnostics through the consumer lobby. Commercializing new IVD products and diagnostic technologies will drive high price tags, which most countries’ payment infrastructures cannot meet. Because MedTech usually outpaces healthcare regulations and reimbursement plans, diagnostic devices manufacturers must provide their medical devices with efficacy and cost-efficiency.
Top IVD companies, developing medical research techniques used in academia, are entering the general IVD market. Life Technologies and Affymetrix (both now part of Thermo Fisher Scientific), Illumina, Bruker Daltonics, and PerkinElmer are the leading companies that have launched clinical tests and test services. They join Roche, Abbott, Siemens, Danaher, and other traditional market competitors.
Declining human resources and automation. There is a lack of trained lab technologists, so there is decreasing availability of human resources needed to run the more complex new sets of molecular and histological tests and immunoassays. Therefore, there has been a proliferation of test and lab automation tools launched that remove precious human resources from mundane pre-analytical and sample-tracking tasks to make time for more sophisticated ones. This phenomenon was once thought to be the purview of core labs but automation is now becoming a common feature in hematology, blood banking, microbiology, and histology. Demand for in vitro diagnostic tests in all the major healthcare markets is driven by aging populations and increased incidence of conditions like cancer, diabetes, cardiovascular disease, arthritis, and obesity. In light of the demand for these IVD tests, they have been reformulated for automated analyzers where the cost per test is traditionally low.
Investing in unifying technology. In the past, physician preferences dictated the type of tests and devices used in each market. The current market, however, is strongly influenced by changes in reimbursement and regulatory policies that pressure hospitals to contain costs and optimize patient outcomes. This is resulting in the restructuring of hospital business models, affecting the way IVD companies add value to their product portfolios. There is a clear shift from volume to value-based healthcare inspiring the IVD companies’ business models. For example, large and established companies are moving away from certain diagnostic fields, such as diabetes, to widespread diseases such as cancer and personalized solutions. There is also a push to integrate big data analysis in diagnostics practices. More IVD companies are shifting from creating new products to a more cost-efficient model of developing add-ons that increase the efficacy and accuracy of tests. This is becoming a prevalent model for established companies.
Shift to data-driven healthcare. Patients are becoming more comfortable with digital devices and services as healthcare stakeholders invest in digital strategies to increase efficiency and improve cost-effectiveness. Integration of technology in labs and hospitals is driving clinicians, data analysts, and corporate leaders, among others, to extract meaningful information from data to deliver higher-quality, more coordinated healthcare services. Accountable care organizations and laboratories emphasize diagnostic testing, integrated with hospital systems, to harness data while monitoring individual patients.
Further, with big data revolution and the emergence of concepts like real-word data in healthcare, big data analytics has become the central talking point in the global life science research tools industry. Academic institutions, research organizations, and commercial companies are increasingly looking to adopt big data analytics in genomic analysis to develop personalized and precision medicines. Companies like IBM Watson, Phillips, and Illumina have been front runners in such efforts and it is likely that by end-2020, big data analytics will play a key role in genomics and bioinformatics markets.
Watch point-of-care. PoC testing’s past success hinged on developing tests that employed user-friendly techniques and alternative samples. Future success for PoCT depends on value-added dimensions to PoC tests, already in progress. Currently, all high-end glucose-monitoring devices offer software and connectivity that allow diabetics to better manage their health. Test services for HbA1c, paternity, coagulation, and other tests provide physician-consultation apps.
PoC testing has contributed heavily to diagnostics market growth over the past 10 years. Health insurance giants Aetna, UnitedHealth, Kasier Permanente – together with research organizations and IT companies – are collaborating to personalize medicine using big data.
Newer technologies entering developing countries like smartphone-linked diagnostic devices can make huge differences.
Coagulation – a mixed bag. Hemostasis regulates blood flow and clot formation with enzymes and proteins, relying on coagulation, fibrinolysis, and platelet aggregation. Anticoagulant drugs prevent platelets from clumping, reducing the risk of arteries clogging, and in turn stroke or heart attack.
The coagulation discipline is in the limelight, thanks to the discovery that coagulation factors are independent of the development of myocardial infections, strokes, and deep vein thrombosis, cancer, inflammatory syndromes, and obstetric complications. IVD market’s coagulation segment is a mixed bag of routine tests and intensive investigation of abnormal tests with genetic markers and special immunoassays run on dedicated coagulation analyzers and core lab chemistry and immunoassay instruments.
Histology – traditional key to cancer testing threatened. Histology and cytology study tissues and cells, respectively. Histological analysis of tissue involves pre-analytical sample preparation and advanced staining.
Specimens are stained on glass slides to characterize targeted cellular constructions, tissue morphology, and cell components. Technologists read the slides using microscopy, while pathologists examine slides with suspicious cells. Histological tests primarily test tissue for cancer or cervical fluid for infectious agents. Biopsied organs or tissues are processed and analyzed similarly.
Pathologists identify tumor sources in most cancer cases, sometimes confirming cancer without finding the sources. Pathologists employ different techniques to improvise difficult diagnoses, including in situ hybridization (ISH), immunohistochemistry (IHC), immunofluorescence (IF), and molecular analysis of tumor cells.
Immunoassays hang in. Immunoassays are important in the IVD instrument market and have been crucial in clinical laboratory medicine since the mid-1960s. Immunoassays are used to diagnose and monitor diseases and conditions. Since the publication of the human genome, immunoassays have been revitalized, generally referred to as post-genomic medicine. Post-genomic medicine employs tests based on protein and nucleic acid targets derived from human genome research. Gene identification comes first, followed by detecting physiological elements such as proteins, hormones, and enzymes expressed by genes.
Proteins, enzymes, coenzymes, and other cellular elements are major players in metabolic pathways that promote and predict disease evolution. This combination of genes, proteins, and pathways make for a comprehensive toolbox for post-genomic science.
Core lab’s expansion. Routine laboratory tests in chemistry, immunoassays, urinalysis, microbiology, coagulation, and HPV cytology are consolidating into the core lab. More analytes, previously found only on dedicated immunoanalyzers, have migrated to consolidated work stations, including D-Dimer (coagulation)
Vitamin D, HgA1c (diabetes), BNP, NGAL, anti-CCP, hsCRP, cystatin, HIV, HCV, procalcitonin, HE4 cancer marker, and markers for Graves’ disease.
Traditional specialization barriers, including microbiology, hematology, blood banking, immunology, and anatomical pathology, are fading, making the core laboratory a lab medicine hub. Economic pressures, labor shortages, and continual additions of new diagnostic tests to lab menus are expanding the core laboratory. At least 80 immunoassays are currently available in clinical workstations.
Smaller hospitals are amalgamating routine tests from different disciplines into one core laboratory. New tabletop diagnostic instruments for small labs are multianalyte workstations, running chemistries and many immunoassays. Current diagnostic instruments for clinical chemistry, immunoassays, hematology, coagulation, urinalysis, and microbiology can link to laboratory information systems and central lab tracks.
Global market dynamics
The global IVD market is estimated at USD 69.2 billion in 2019 and is expected to grow a little more than 4 percent annually to reach USD 85.2 billion by 2024, predicts Kalorama Information. An increase in the incidence of chronic and infectious diseases and growth in the geriatric population drives the global IVD market. Also, growth in the number of public and private diagnostic centers and PoC testing centers is expected to fuel the market growth in the coming years. Furthermore, the rise in investment for the advancement of the healthcare sector by the government is anticipated to boost the market growth. However, stringent government regulations for the manufacturing of IVD products and inadequate reimbursement policies are expected to hamper the growth of the IVD market. Ongoing R&D activities related to IVD are anticipated to provide new opportunities for market growth.
The instruments segment is expected to grow at a CAGR of 6.1 percent from 2020 to 2024. The growth of the instruments segment is attributed to the recent advancements in IVD instruments. Further, there is a growth in demand for fully automated instruments in the market as they simplify the task and provide more accurate and reliable results.
In 2019, reagents and kits commanded the largest share in the global IVD market. They are also expected to witness rapid growth from 2020 to 2024 mainly because of incessant product launches, the number of on-going research activities, and the growing prevalence of various acute as well as chronic infectious diseases.
Immunoassays commanded the largest share with their greater adoption attributed to advantages like inherent specificity, high throughput, high sensitivity, low cost, and rising demand for immunoassay-based tests. Moreover, molecular diagnostics is expected to witness the fastest growth over the next 6 years, by technique. Automation is an emerging trend observed in clinical testing. The availability of easy-to-use portable devices enables self-testing is expected to fuel the market growth in the near future.
Infectious-disease segment commanded the largest share with the large volume of IVD tests performed for infectious diseases, high incidence of various infectious diseases, and incessant technological advancements in the tests used for the detection of such diseases. Oncology is expected to witness the fastest CAGR of 8.93 percent by 2025, by application. Increasing demand for self-care devices and PoC diagnostics for the treatment of chronic diseases can boost growth in the forthcoming years.
Hospital laboratories commanded the largest share by end-user, primarily because of the high volume of diagnostic tests being performed in the hospitals and a high incidence of hospital-acquired infections. The homecare segment, on the other hand, is expected to register the fastest CAGR of 8.48 percent by 2024.
Geographically, APAC will be the fastest-growing regional market because of improving healthcare infrastructure; growing accessibility to healthcare services; increasing incidence of infectious and non-communicable diseases with an aging population; growing income levels and insurance penetration; and rising number of hospitals and clinics. However, North America commands the largest share of the global IVD market, followed by Europe, APAC, Latin America, and Middle East & Africa.
Major players operating in the global IVD market include Roche Diagnostics, Danaher Corporation, Abbott Laboratories, Siemens Healthcare, Thermo Fisher Scientific Inc., Sysmex Corporation, bioMérieux S.A., Becton, Dickinson and Company, Bio-Rad Laboratories, Inc., DiaSorin S.p.A., Qiagen N.V., and Agilent Technologies, Inc. Key players focus on strategies, such as mergers and acquisitions, collaborations, and new product developments. In addition, they are aiming at expanding their businesses across developing regions to boost their market share.
Indian market dynamics
The Indian in vitro diagnostics industry, estimated at USD 6 billion, is growing at a healthy rate of 13–14 percent per annum. With more than 100,000 labs in India, the industry is highly fragmented and the largest of the organized players have a market share of less than 5 percent.
The industry plays a significant role in the care continuum, be it for diagnosis, prevention, monitoring or treatment. Today, 70 percent of medical decisions across the globe are based on laboratory results.
Diagnostic tests are frequently performed in public or private laboratories equipped with suitable and expensive instrumentation along with skilled and trained personnel for analysis. The diagnostics market is experiencing quick progress owing to advancements in oncology, molecular diagnostics, PoC, and novel sectors such as companion diagnostics in both developed and developing economies.
The market is driven by an increase in the elderly population, intensification of chronic diseases, pandemic situations in the case of infectious diseases, and the growing importance of medical diagnostics.
There has been a paradigm shift arising in the implementation of technology and automation. The need for precise and rapid results has resulted in the implementation of high-end products for in-depth evaluation. The Indian government supports public-private partnerships (PPPs) and other innovative schemes to enhance Indian IVD advancement. Foreign direct investment (FDI) and domestic study have been encouraged by the government to support the industry. The number of players in the segment offering quality products and after-sales services has risen.
The industry has reached new heights with significant technological advances and greater performance technologies. Advanced, state-of-the-art techniques are used to comprehend disease prognosis, and thus strengthen the standard of sophistication.
The future growth of the Indian IVD market will be driven by Tier-II and Tier-III cities, and that is where the price of the products and testing consumables will matter the most.
The in vitro diagnostics industry plays a significant role in the care continuum. The growing importance of evidence-based medicine has provided a fillip to the industry. Along with its core objective of diagnosis, the industry offers additional benefits, be it employment generation, availability of specialized tests, improved access, and technological advancements, among others.
The industry will play a critical role in the achievement of the vision of Universal Health Coverage (UHC) as well as the Sustainable Development Goals (SDGs). The industry, however, suffers from a limited focus on quality standards and cost pressures driven by high custom duty and the GST structure.
Going forward, the government and the industry should come together, and efforts should be made toward laying down minimum q uality requirements, easing of custom duty, and extending input tax credits for GST. India still lags in providing quality care to its citizens.
The launch of Ayushman Bharat is a significant step toward achieving the goal of UHC. The lab diagnostics industry would need to play a key role in the realization of this goal. However, it warrants significant investments – both CapEx as well as investment in expanding research and development facilities and introducing India-specific markers and tests. The government could collaborate with the industry to ensure that the benefits of quality diagnostics and wellness can be delivered to the country as a whole.