TRENDS & PERSPECTIVES
According to a new report released by Kalorama Information (New York City), “The Worldwide Market for In Vitro Diagnostics Tests, 6th Edition,” the global IVD market is estimated to have reached $42 billion in 2007 and is expected to grow 6% annually to $56.3 billion by 2012. (This market includes all laboratory- and hospital-based products, and over-the-counter product sales.) North America, Europe, and Japan, account for 44, 30, and 11% of the IVD market respectively, making up 85% of the total market. By 2012, their portion of the market is expected to decrease to 76%.
The report found that some of the future market growth in the IVD industry will derive from increased test usage in emerging countries. For example, significant growth is expected in China and India which are investing in healthcare infrastructure and insurance coverage for a growing and more affluent middle class. Emerging economies in Latin America and Eastern Europe will also pick up the slack and will grow from 4% in 2007 to 5% in 2012. Overall, emerging markets will experience 10-20% annual growth, while the developed world will see annual growth of 3-6%.
The report stated that a number of world events bode well for the future of IVDs, such as an aging worldwide population and growing demand for new hospitals in developing countries. Increasing numbers of people between the ages of 45 and 75 in the industrialized world consume more healthcare services such as heart and cancer tests. Accordingly, IVD companies are casting their nets in developing countries where rising incomes and standards of living have sparked a new health consciousness and growing demands for quality medical care.
In particular, Asia’s rapid economic growth and the recent entry of China into the World Trade Organization make the area the biggest future market for IVD products. While China represents only 2% of the world IVD testing market, this figure will double in the next five years.
Nonetheless, the United States is still the largest single market for IVD products and has an enormous impact on how the IVD industry develops. Managed care’s obsession with cost reductions is pushing the need for near-patient and decentralized testing in the home, as well as bedside and physician office testing. Such demand implies a level of connectivity not generally available in current point-of-care devices, but which is becoming an important consideration for more IVD manufacturers.
According to the report, the top 16 IVD companies accounted for 78% of the global market, or $32 billion, in 2007. These top-tier companies will continue to dominate the market due to their global reach and multisegment participation. However, their single-digit growth compares to the 41% combined growth of the next twelve largest IVD companies. Major growth in the IVD industry will be driven by niche players in histology, molecular assays, diabetes, and rapid tests for infectious diseases.
A particularly significant development in 2007 was the incredible change in the IVD industry landscape. Previously top-tier companies Diagnostic Products Corp., Dade Behring, and Bayer Diagnostics were acquired by Siemens Medical Diagnostics. In addition, a number of smaller and important companies were also absorbed, including the following: Ventana Medical Systems, Digene Corp., Biosite Inc., TriPath Imaging, Matritech, and Cholestech.
The report identified several market trends that will have a significant impact on the IVD industry in the future, including the following.
- Research derived from the Human Genome Project is expected to lead to a number of revolutionary therapeutics that will further cut the morbidity and mortality of a number of diseases, including diabetes, asthma, autoimmune diseases, and cardiac diseases. The use of genetic factors in evaluating patients at risk for disease is still developing. The link between genes and disease risk provides an ongoing market opportunity for IVD research and product development.
- Remote monitoring of chronically ill patients at home is emerging as a primary strategy to keep individuals out of hospital acute care wards, at home, and out of medical trouble. Considered by many to be the new frontier of healthcare delivery, home telecare promises to provide more needed services more frequently and less expensively. The mission of home monitoring programs is to empower caregivers to better manage chronic conditions while enabling health plans to continuously improve the quality of their services to members.
- As an aging society begins to use more healthcare services, cost- efficiency imperatives continue to put pressure on payers, providers, and suppliers. Healthcare organizations have developed strict cost/performance and care guideline directives. One of the ways to achieve such directives is to use medical and financial data to evaluate and prescribe the use of medical devices. IVD manufacturers will have to generate more data, which will be accompanied by the inevitable use of data to evaluate the medical usefulness and necessity of using a specific device. Medical device usage will be based on performance data, contribution to patient outcome, and a cost/benefit analysis.
Additional information about this report is available via Kalorama’s Website at www.kaloramainformation.com.
