INDUSTRY NEWS
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(click to enlarge) Total revenues generated by the IVD market in India, 1996–2006. Source: McEvoy & Farmer (Seattle).
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According to the 2001 census, India became the second country in the world with a population that crossed the one billion person mark. While China gets a lot of the attention as a developing IVD market, India is also making progress. A report by Kalorama Information (New York City), "Worldwide Market for In Vitro Diagnostics," puts the Indian market for IVD tests at $400 million in 2005, accounting for 1% of the global IVD market, with an annual growth rate of 20% during the next five years. This means that the market should reach $990 million, or about 3% of the global IVD market, by 2010.
An article from the online edition of Indian Express declared that India is on the verge of an "outsourcing wave" in high-end laboratory and diagnostic testing, but also mentioned only two labs there that are currently accredited for global outsourcing. Carl McEvoy, partner in the IVD research firm of McEvoy & Farmer (Seattle), thinks that an outsourcing boom is unlikely. "I don't think there are any specimens being shipped from other countries to India," he says. "They are doing some exporting of IVD products, mainly rapid tests, but we don't expect them to be doing testing for other countries."
According to McEvoy & Farmer's recent report on the IVD market in India, public and private laboratories are different. Public labs make their own reagents and use older methods. They also often run out of reagents, and are forced to forgo testing. The World Bank continues to make funding available for improvements in India's public health system, and while these institutions are getting better, they are not improving at the same rate as the private sector.
One area of change that is improving healthcare in India is the Insurance Regulatory Development Act (IRDA) passed five years ago by the government. This law allows foreign firms to offer health insurance in India. Prior to this, according to McEvoy & Farmer, the only insurance in India was a government plan in which patients paid for their medical care, and then filed for reimbursement. This plan, which continues, covers a very small number of people.
New private insurance programs also still cover only an estimated 1–5% of the Indian population. While the policies generally pay for diagnostics only when a patient is hospitalized, they do allow policy holders to get their medical care without payment in advance, as the hospitals will accept payment directly from the insurance companies. This system has made it easier for patients, and the plans are proving popular. "We consider this a trend," says McEvoy. "We expect to see private insurance grow at a rapid rate, and expand in what it covers in a way that will promote growth in the diagnostics industry."
While the IVD market in India is roughly one-fourth public and three-fourths private, different market segments have different levels of purchases from these two sources, according to the McEvoy & Farmer report. The tendency of public buyers to favor basic tests means they have a higher-than-average portion in routine chemistry and hematology testing. While the two sectors are proportional in critical care chemistry and urinalysis, the public sector buys less than one-fourth of the total purchases in coagulation and immunochemistry. In molecular testing, the public sector buys more than one-fourth of the total due to the number of research and training institutions that they supply.
Both the Kalorama and McEvoy & Farmer reports point to growth opportunities in the IVD market in India. "Laboratories are looking to improve quality and turnaround time," says the Kalorama report, "which drives the demand for equipment and reagents which perform multiple functions quickly and efficiently."
McEvoy & Farmer place the highest growth rates in hematology and immunochemistry testing, with urine chemistry being the only negative growth area. "For the future, we are watching molecular testing," says McEvoy. "This is just starting in India, but we expect to see good growth rates there in the next few years."
