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The Indian IVD Market to Double its Global IVD Market Share by 2020

The global IVD market is estimated to be USD 60.3 billion in 2015 and is poised to grow at a 5 year CAGR of 6.1 percent to ~USD 81 billion by 2020. India accounts for 1 percent of the global IVD share and is expected to double its share to 2 percent by 2020 with an estimated 5 year CAGR of 15 percent– 20 percent. Health awareness, demand for quality healthcare, willingness to spend on healthcare, rise in disease prevalence and incidence, expansion of the pathology diagnostic market, and the developing clinical research market are the key growth drivers. There are multiple segments in the IVD market; biochemistry, immunoassays, and hematology dominate the Indian IVD market with 65 percent – 70 percent share. Reagents account for ~60 – 70 percent of the value share as equipment’s are commonly placed/seeded. MNCs dominate the medical diagnostic market. Roche is the leader in the market with an estimated 14 percent market share. Transasia is one of the largest domestic players. Most players are present in at least 5 – 6 segments of the IVD markets. 60 percent of the medical diagnostic equipment’s are imported. Medical equipment’s are distributed within the country through regional distributors who have a network of sub-distributors. In addition to labs, private, and government hospitals, prescribing physicians and CROs may be potential customers.

IVD segment synopsis IVD market in India

  • Biochemistry or clinical chemistry is the analysis of body fluids to detect the presence of analytes relating to a disease or drug. Photometry is the most common analytical method followed by ISE. Globally biochemistry is 15 percent of the total IVD market, in India biochemistry has a higher share of 20 percent – 25 percent and is the largest segment. Reagents dominate the revenue in this market with equipment’s being leased or rented in most cases.
  • Immunochemistry is the second largest segment in the Indian IVD market with 22 percent share. Reagents account for 90 percent of the market.
  • Hematology is the 3rd largest segment in the Indian IVD market, driven by a strong pull from prescribing doctors for blood tests. Reagents account for 62 percent of the value share.
  • Microbiology occupies 5 percent-6 percent share in the IVD market, reagents dominate this market as well with 80 percent share. bioMerieux is the leader in this segment.
  • Urinalysis accounts for 3 percent of the share in the Indian IVD market. The market is shifting from manual to automated analyzers. Siemens, Dirui, Sysmex, Tranasia, and Roche are leaders in this segment.
  • Coagulation accounts for about 2 percent of the market. Stago is the leader in the segment.
  • Molecular diagnostics accounts for 2 percent of the IVD market. It is expected to have great future growth potential. The market in India is predominantly a placed market and revenue is driven by consumables.

India’s position in the global medical diagnostics market

India accounts for 1 percent of the global IVD share and is expected to double its share to 2 percent by 2020 with an estimated 5 year CAGR of 15 percent– 20 percent. The medical diagnostics industry is classified into two types: In-vitro diagnostics and In-vivo diagnostics. In-vitro tests are executed in glass test tubes, while In-vivo diagnostics tests are executed inside a patient’s body. IVD products are designed and produced for collecting samples (biological samples such as blood, urine, saliva, spinal fluid, and DNA) from the patient’s body and scrutinizing them outside, commonly conducted in hospitals, clinics and labs and in personal settings. The global IVD market is estimated to be USD 60.3 billion in 2015 and is poised to grow at a 5 year CAGR of 6.1 percent to ~USD 81 billion by 2020. North America and Europe accounted for 65 percent of the market in 2014. However their share is estimated to fall to 54 percent by 2020 as Asia and LAAM (Latin America, Africa and the Middle East) gain in share. Asia is estimated to grow at 12.9 percent CAGR and LAAM at 7 percent over a 5 year period (2015 -2 020). Within Asia, India and China is expected to grow at a 15 percent CAGR. India thus is poised to be an attractive market for IVD. India is estimated to be a USD 700 – USD 750 million markets in 2015 thus accounting for 1 percent share of the global IVD market by value. The Indian market is poised to be a USD 1.5 – USD 1.7 billion market by 2020 at a 5 year CAGR (2015 – 2020) of 15 percent – 20 percent.

Growth drivers of the Indian IVD market

The market is driven both by increase in healthcare awareness and spends as well as increase in the diagnostics infrastructure in the country. Growth drivers include:

  • Increasing health awareness and demand for quality healthcare.
  • Changing demographics and prevalence of disease.
  • Increasing corporate presence in healthcare including establishing diagnostic laboratories.
  • Expansion of pathology diagnostic market to towns and rural areas.
  • Growing number of insured lives.
  • Developing clinical research market.

Indian IVD market composition segments

Biochemistry, immunoassays and hematology dominate the market with 65 percent – 70 percent share. Segments  percent share Size of Market (Rs Cr) Reagents (percent share to segment) Equipment’s (percent share to segment) IVD 100 percent 4500 – 5000 Biochemistry 23 percent – 25 percent 1060 75 percent 25 percent Immunoassays 22 percent 1000 90 percent 10 percent Hematology 18-20 percent 800 – 900 62 percent 38 percent Microbiology 5 percent – 6 percent 240 – 276 80 percent 20 percent Urinalysis 3 percent 114.65 83 percent 17 percent Coagulation 2 percent 102 70 percent 30 percent Molecular Diagnostics 2 percent 90-100 99 percent 1 percent Tissue diagnostics.

Indian IVD market composition

Reagents versus equipment reagents account for ~60 – 70 percent of the value share as equipment’s are commonly placed/seeded Reagents & Equipment’s. The market for diagnostic equipment is highly competitive. Equipment is often leased or rented, and revenue is generated through consumables. The vendor is assured of the sales of reagents for a 5 to 7 year period while the hospital and laboratories do not have to incur major capital expenditure for equipment. Reagents account for ~60 percent- 70 percent of the value share while equipment’s account for the remaining 30 percent – 40 percent. Increasing competition pressures the laboratories to continuously improve quality and provide rapid results; this demand drives the need for equipment and reagents that perform multiple functions efficiently. There are opportunities for technologically superior products. With growing competition laboratories are trying to distinguish themselves by using better reagents and instrumentation. Several Indian and foreign companies are active in the equipment and reagent market: Transia Bio Medical, Roche Diagnostics, Beckman Coulter, Abbott Diagnostics, Siemens Healthcare Diagnostics, Sysmex, Qiagen N.V, PerkinElmer, Accurex, Bayer Healthcare, Becton and Dickinson, bioMerieux India, Nicholas Piramal, Wipro Biomed, Johnson and Johnson, Olympus Diagnostics, Sigma Aldrich, Hitachi, Ortho Clinical Diagnostic, Ranbaxy Diagnostics, and Bio- Rad Laboratories.

Indian IVD Market Composition – Players

MNCs dominate the Medical Diagnostic Market. Transasia is one of the largest domestic players. Most players are present in at least 5 – 6 segments Segments Roche Abbott Sieme ns Beckm an BD Trans asia Biochemistry Yes Yes Yes Yes No Yes Immunoassays Yes Yes Yes Yes No Yes Hematology No Yes Yes Yes Yes Yes Microbiology No No No Yes Yes Yes Urinalysis Yes No Yes Yes No Yes Coagulation Yes No Yes No No Yes Molecular Diagnostics Yes Yes Yes No Yes No Tissue diagnostics Yes No No No Source: Secondary research and company websites. MNCs occupy ~60 percent share in the IVD market, Indian companies 40 percent. MNCs cater to A&B class diagnostic labs/ hospitals while Indian companies cater to C&D class (A|B|C|D classification based on volume of diagnostic tests done) — MNCs mostly have automated closed systems. Indian companies have a mix of automated & Semi automated systems but are mostly open systems.

Biochemistry Market

Biochemistry or Clinical chemistry is the analysis of body fluids to detect the presence of analytes relating to a disease or drug. Photometry is the most common analytical method followed by ISE. Biochemistry also known as Clinical chemistry is concerned with the analysis of body fluids for diagnostics purposes. Clinical chemistry analyzers run assays on clinical samples such as blood serum, plasma, urine, and cerebrospinal fluid to detect the presence of analytes relating to disease or drugs. Analytes commonly include enzymes, substrates, electrolytes, specific proteins, drugs of abuse, and therapeutic drugs. The results give clinicians feedback on toxicology and on renal, cardiac, and liver function. Tests and analytical methods: The most common test method is photometry. The sample is mixed with the appropriate reagent to produce a reaction that results in a color. The concentration of the analyte determines the strength of color produced. The photometer shines light of the appropriate wavelength at the sample and measures the amount of light absorbed, which is directly correlated to the concentration of the analyte in the sample. The other major analytical method is the use of ion selective electrodes to measure ions such as Na+, K+, Cl–, and Li+. An ISE is a sensor that determines the concentration of ions in a solution by measuring the current flow through an ion selective membrane.

Biochemistry Market Globally: Biochemistry is 15 percent of the total IVD market, in India Biochemistry has a higher share of 20 percent – 25 percent and is the largest segment. Reagents dominate the revenue in this market with equipment’s being leased or rented in most cases. Size & Growth: The global biochemistry market was estimated at USD 9.46 billion in 2015 with an estimated CAGR of 5.5 percent between 2015 and 2020, to reach USD 12.4 billion in 2020. In India, biochemistry market accounts for 23 percent – 25 percent share of the IVD market and was estimated at Rs. 1060 crore in 2015 (2 percent share to global market). Reagents dominate with a 75 percent market share. The Indian market is steadily shifting to reagents sold for open systems, their share having gone up from 50 percent in 2014 to 55 percent in 2015. In the analyzer segment, the market is moving toward automated systems, which constituted 57 percent of the market in 2015. Trends: Totally computerized fully automated systems helps improve bottom lines of laboratories, by cutting down the cost of consumables and less requirement of qualified and trained technicians. These factors have prompted lab managers to go in for automation. The high-end laboratories, which offer automated biochemistry systems, cater to approximately 30 percent of the national workload while the second tier regional laboratories cater to 40 percent of the patients. The manual laboratories account for the remaining 30 percent patients. The market for biochemistry equipment is highly competitive. Equipment is often leased or rented, and revenue is generated through consumables. The vendor is assured of the sales of reagents for a 5-7 year period while the hospital and laboratories do not have to incur major capital expenditure for equipment.

Immunochemistry Market

Immunochemistry is the second largest segment in the Indian IVD market. Reagents account for 90 percent of the market. Immunoassays are biochemical tests that measure the presence or concentration of a macromolecule or a small molecule in a solution through the use of an antibody or antigen. Size & Growth: The global immunochemistry instruments and reagents market is expected to reach USD 24.5 billion by 2019, growing at a CAGR of 7.2 percent from 2014 to 2019. There is a rising focus on biomarker development across the globe as they help in detection of various diseases in their initial stage. In 2015, the Indian immunochemistry instruments and reagents market was valued at Rs. 1000 crore. Reagents accounted for 90 percent of the market. The ELISA kits demand for this segment in 2015 is estimated at Rs. 325 crore and rapid tests at Rs. 250 crore. Chemiluminescent systems are gaining momentum, especially in tier I cities where the installation base and replacement market is increasing. On the other hand, tier II and III cites are opting for fluorescent and manual chemiluminescent systems. The purchasing power of the customer has increased. ELISA kits, albeit a declining segment continue to have relevance for their large test menu and affordability. Based on application, test for hepatitis C virus (HCV) dominates the Indian immunoassay market in 2015, with its increasing application in the diagnosis of infectious diseases.

Hematology Market

Hematology is the 3rd largest segment in the Indian IVD market, driven by a strong pull from prescribing Drs for blood tests. Reagents account for 62 percent of the value share. Hematology is a branch of biology concerned with the study of blood. Common tests include complete blood count (CBC), full blood count (FBC), erythrocyte sedimentation rate (ESR), prothrombin time (PT), partial thromboplastin time (PTT) etc. Size & Growth: The global hematology instruments market is expected to exceed USD 2.6 billion by 2020, growing at a CAGR of 5 percent. The global large-capital equipment hematology instruments market is likely to reach USD 1.3 billion by 2020, growing at a CAGR of over 4.5 percent. The global bench-top hematology instruments market is projected to exceed USD 1 billion by 2020, growing at a CAGR of around 5 percent. The global point-of-care (POC) hematology instruments market is likely to exceed USD 349 million by 2020, growing at a CAGR of over 6 percent. The Indian Hematology market is valued at 800 – 900 Cr with 62 percent value share from reagents. Growth Drivers in India: A strong need and desire to upgrade from manual systems to automated. Strong pull from prescribing clinicians for complete blood count rather than traditional TLC/DLC tests. Increase in incidence of diseases like dengue, swine flu, and chikungunya, which are primarily diagnosed by monitoring blood parameters like WBCs and platelets. Increasing demand for advanced tests like reticulocyte count. Increase in work load of hematology cases at the labs.

Microbiology Market

Microbiology occupies 5 percent-6 percent share in the IVD market, reagents dominate this market as well with 80 percent share. bioMerieux is the leader in this segment. Diagnostic clinical microbiology is related to etiologic diagnosis of infection. — Microbiology laboratories detect various antimicrobial resistant pathogens and help in antimicrobial stewardship programs and activities. This helps in reducing unnecessary, unjustified, and prolonged course of antibiotics and chooses a more appropriate therapy targeted to maximize patient outcomes. Size & Growth: The Indian Microbiology market was estimated to be 240 Cr in 2014 and with an expected growth rate of 15 percent should be 276 Cr in 2015. The market is dominated by reagents with 80 percent value share. The reagents market may be segmented into instruments-based reagents and non-instruments-based reagents. The non-instruments-based reagents are estimated to have 45 percent share within the reagent segment with Hi-Media and bioMérieux India as the largest players. The instruments-based reagents own the remaining 55 percent share with bioMérieux India in the lead. The instruments market may be further segmented into ¡ identification & antibiotic susceptibility testing (ID/AST) (55 percent) ¡ blood culture analyzers (35 percent) ¡ TB culture analyzers (10 percent). The market for microbiology instruments is led by bioMérieux India. BD India is also aggressive. Other players with some presence in the market are Bruker, and Siemens; Trivitron, Suyog Diagnostics, Immunoshop, and Avantor Performance Materials.

Urinalysis

Urinalysis accounts for 3 percent of the share in the Indian IVD market. The market is shifting from manual to automated analyzers. Siemens, Dirui, Sysmex, Tranasia & Roche are leaders in this segment. It is an array of tests performed on urine. It typically includes descriptions of color, appearance, specific gravity, pH, ketone bodies, proteins, nitrites, bilirubin, RBC, WBC, and so on. Size & Growth: Global urinalysis instrument market was estimated at USD 1.37 billion in 2015 forecasted to reach USD 2.14 billion by 2022. The Indian market for urinalysis instruments and reagents in 2015 is estimated at Rs. 114.65 crore. Reagents continue to dominate with 83 percent share, valued at Rs. 95 crore. India is perhaps the last market to have shifted from manual to urine sediment and integrated analyzers, with about 100 installations having taken place in the last three years. Siemens (including Bayer), Dirui, Sysmex, Transasia, and Roche are leaders in this market. Vendors are in a transition phase and are introducing new models gradually. Alere, Beckman Coulter, and Bio-Rad, which are leaders globally, were yet to gain appreciable market share in India as of 2015. In spite of this global trend gradually making inroads into the Indian labs, semi-automated instruments continue to have a 66 percent presence in the Indian market, which is dominantly characterized by a consumer, whose capacity to pay is limited. However, the gap between entry-level semi-automated instruments and high-throughput semi-automated instruments is closing. In 2015, India imported 639 units of urine chemistry analyzers estimated at USD 379,558. China is the largest supplier accounting for imports worth USD 140,568 followed by Poland and South Korea at USD 111,370 and USD 63,989 respectively.

Coagulation

Coagulation accounts for about 2 percent of the market. Stago is the leader in the segment. Coagulation analyzers measure blood platelet levels, coagulation pathway speed and thrombolin and thromboplastin levels in a blood sample Size & Growth: The Indian market for coagulation is estimated to be Rs 102 Cr and has grown at 11 percent over last year (2014). Reagents dominate at Rs. 71.5 Cr. Within the Rs. 30.5 crore instrument segment, Rs. 18.1 Cr is from fully automated instruments. The market for semi-automated instruments, constituting single- channel, 2-channel and 4-channel, was estimated at Rs. 12.4 crore. Competitors Leader: Stago, including Trinity Biotech (which sold its coagulation business to Stago, in India marketed by Rapid Diagnostics). Instrumentation Laboratory, part of Werfen Group, marketing its products in India under the brand name of Werfen Medical India and Sysmex are aggressive in this segment. 2014 saw the entry of Abbot in this segment in India. Roche, having launched its coagulation products in Europe, is expected to launch in India in 2016.

Molecular Diagnostics

Molecular diagnostics accounts for 2 percent of the IVD market. It is expected to have great future growth potential. The market in India is predominantly a placed market and revenue is driven by consumables. Molecular diagnostics is a set of analytical tools used to interpret biomarkers1 in an individual’s genome. They detect and measure specific sequences in deoxyribosenucleic acid (DNA), riboneuclic acid (RNA) and the proteins they express. Molecular diagnostics identify gene, RNA, and protein variations that shed light on whether a specific person is predisposed to have a disease, whether they actually have a disease, or whether a certain treatment option is likely to be effective for a specific disease. These tests also can detect and quantify the presence of specific viruses, bacteria, or types of cells. Key Drivers of the Indian Molecular Diagnostics Market: Rising Incidence of Chronic and Infectious Diseases, Rapidly Ageing Population, Rise in Point of Care Testing, Increased Physician Awareness to Better Clinical Outcomes, Improving Healthcare Infrastructure and Technology in India. Size & Growth: The Indian molecular diagnostics market is estimated at Rs. 91 crore (not including placed systems) in 2014. Reagents contributed Rs. 90 crore and the analyzers a mere Rs. 1 crore as placed system are almost become the norm in this segment. Abbott Diagnostics, Roche Diagnostics India, and Qiagen India Private Limited are the leading players in the Indian market. LabIndia Healthcare, Bio-Rad Laboratories Inc., and some Chinese brands also have aggressive presence.

Supply Chain in the Indian IVD Market

60 percent of the medical diagnostic equipment’s are imported. Medical equipment’s are distributed within the country through regional distributors who have a network of sub-distributors. The GOI does not require a license to import equipment and reagents. Imports provide approximately 60 percent of the diagnostic medical equipment and supplies market. In cases where government hospitals directly import equipment, the government levies a 5 percent duty. Government laboratories procure equipment and supplies through tenders where price plays a major role in the decision making process. Private hospitals and laboratories, however, make their own purchase decisions and consider both quality and price while making procurement decisions. In India, medical equipment is distributed through regional distributors who have a network of sub- distributors. Use of a local well-qualified distributor helps to establish good relationships and often influences buying decisions. The distributor should have a sales network and provide after sales service.

Indian IVD Market – Who are its Customers?

In addition to Labs, Private & Government hospitals, prescribing physicians and CROs may be potential customers — The main customers for the IVD markets are the stand alone and chain of Laboratories, Hospitals with diagnostic facilities, Government hospitals and even Physicians for POC/NPP. The Purchase Heads/ Lab Head/ Pathologist/ Microbiologist are the main stakeholders. Prescribing Physicians who recommend diagnostics tests may also be customers albeit not direct. Similarly in critical care situation: intensivists/ ICU heads are key customers. Since diagnostics is an integral part of Clinical trails, potential tie-ups with CROs will also benefit IVD players. – Medical Buyer Bureau