INDUSTRY NEWS
Worldwide sales of in vitro diagnostic tests are expected to top $44.5 billion within four years, according to a report from independent market research company Kalorama Information (New York City). But even as advances in functional genomics, bioinformatics, miniaturization, and microelectronics continue to fuel growth, and new niche markets for point-of-care test devices open, the market will face challenges. The aging world population, along with continued reimbursement issues, will continue to squeeze the IVD industry dramatically, according to The Worldwide Market for In Vitro Diagnostic Tests.
Emerging markets in South America, Eastern Europe, and Southeast Asia are expected to grow from 6% of the world IVD market in 2005 to 10% in 2010, experiencing 10–20% annual growth as standards of living and demand for quality healthcare increase. Meanwhile, North America, the European Union, and Japan, which currently make up 85% of the total market, will slip to 80%. The biggest future market for IVD products is Asia, according to the report, due to rapid economic growth in the area and China’s entry into the World Trade Organization.
Two trends are predicted to continue throughout the world: the aging population will cause a shift in focus from infectious diseases to chronic conditions such as diabetes, cancer, and cardiac diseases; and increased privatization of healthcare services will continue to increase pricing pressure on IVDs. The United States, which the report calls a “free market in disguise” because of the limiting role of regulations and reimbursement schemes, is no exception.
One example of regulatory limitations can be found in the newer sets of molecular tests for pharmacogenomics—including the SNP panel of the p450 gene, p53 gene, and others. Because no clinical precedence has been established for these, they face a much higher regulatory hurdle than previous molecular tests. While initiatives are under way to remedy the situation, it is expected that these tests will fall into high-risk categories subject to intense premarket regulatory scrutiny. The reimbursement challenge is also felt most keenly by these products because they are more expensive than the status quo.
With cost pressures bringing pricing “just about as low as it can go,” market growth of a moderate 5–7% is fueled by increases in test volume and in use of healthcare services as populations age. New tests and immunoassays will be needed to achieve more-sustainable growth of 10% and higher. Thus, the report predicts that more-expensive nucleic acid tests, pharmacogenomic tests, and immunoassays for cancer, cardiovascular diseases, and infectious diseases will begin to overshadow mature industries. However, “the commercialization of sophisticated new IVD products and technologies comes as a two-edged sword,” says the report. “Many of these new devices and technologies are expected to carry a high price tag and the payment infrastructure in most countries has not evolved to cover many of the newer approaches to patient management.”
Other growth areas include protein patterns, and new molecular and miniaturized tests and devices. The world market for biochips developed for clinical diagnostics was $70 million in 2005, according to the report, but is expected to develop into a clinical lab market worth $250 million to $300 million by 2008. The world market for protein arrays, now strictly research, is valued at $120 million in 2005 and could reach $500 million by 2010 with a number of cancer applications.
Additional promising trends—the ongoing market opportunity due to the link between genes and disease risk, the promise of home telecare, and the emerging power of the consumer lobby—also put a positive spin on the future of the industry. “Yet, as is often the case, current and emerging technologies are far ahead of most healthcare regulations and reimbursement plans,” says the report, “making many of these newer approaches to patient management inaccessible and/or unaffordable in many areas of the world.”
Additional information about this report can be accessed via Kalorama’s Web site at www.marketresearch.com.
