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IVD Technology Magazine
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Niches in the global marketplace

Anyone who has been watching the IVD industry for any length of time can probably recite the litany of mergers and acquisitions that have fundamentally altered the sector's competitive environment over the past few years. Worldwide, about three-quarters of the market for IVDs is now controlled by eight large companies (in descending order of market share): Roche Diagnostics, Abbott Laboratories, Johnson & Johnson, Bayer Diagnostics, Beckman Coulter, Dade Behring, Becton Dickinson, and bioMèrieux.

But in the battle for recognition of new technologies, size can sometimes be a hindrance. For example, at this year's annual meetings of the Clinical Laboratory Management Association (Anaheim, CA, in June) and the American Association for Clinical Chemistry (San Francisco, in July), the booths that were consistently five-deep with potential customers were often those of smaller companies with products designed to meet the needs of very particular niches in the market. Some of these smaller, innovative companies are among those profiled in this issue by analysts Carl McEvoy and Michael Farmer (see article). As the authors suggest, the long-term success of such companies and their technologies may eventually require the involvement of larger companies. Even so, it is encouraging to see so many niche companies managing to keep alive their dreams as IVD innovators—at least in the United States.

It is less clear how such small, entrepreneurial companies may fare under the gradually evolving terms and conditions associated with implementation of the European Union's IVD Directive (see article). On one hand, the European market is showing signs of improved growth that could support the adoption of new technologies. According to John Place, director general of the European Diagnostic Manufacturers Association, the IVD market in the European Economic Area grew by 4.4% in 1999. And this year, he says, the market is looking "pretty good—much better than last year."

On the other hand, the EU member states do not seem inclined to meet their own timetable for implementing the IVD Directive. As of this writing, only Austria, Denmark, Finland, and Sweden have substantially completed the transposition of the directive into national legislation—a step that was supposed to have been completed last December. Correspondingly, only two third-party concerns (Underwriters Laboratories and TÜV Product Service) have so far been named notified bodies under the terms of the IVD Directive.

In the absence of notified bodies, some companies will not be able to obtain the CE mark, which will be required for all IVD products placed on the European market beginning on December 7, 2003. As a stopgap, Place suggests that manufacturers should begin working with firms that expect to become notified bodies, even though there is no guarantee that they will be appointed. "Nothing in Europe is black and white," he notes. "We have to work with what we've got."

Pragmatically, Place's advice may be sound. But it's worth considering that some companies may be disadvantaged by such uncertainties and their associated costs. To give small, innovative companies and their technologies a chance at surviving, it should be hoped that the EU member states will act on the business of the IVD Directive in the near future.

Steven Halasey
steve.halasey@cancom.com