Australian IVD Remains Strong in a Constellation of Asian Markets

Australian IVD Remains Strong in a Constellation of Asian Markets

With universal healthcare and high patient utilization of a modern healthcare system, Australia represents a premier in vitro diagnostics (IVD) market in the Asia-Pacific with excellent per capita IVD spending on par with Japan and superior to markets in developed countries such as Singapore and Korea. Australia also projects to outperform the IVD markets in either Japan or Singapore in terms of growth.

Approximately half of every dollar spent on clinical testing or pathology services in Australia is provided by the universal public health insurance program, Medicare. Medicare billings, direct government payments, and public health programs provide the bulk of funding for clinical testing in Australia and in turn determine Australian IVD demand. Medicare outlays for pathology services have been capped at 5% maximum annual growth as part of a Pathology Funding Agreement (PFA) in 2011. The agreement also institutes fee cuts in the event of pathology overspending above capped growth. Despite the imposed limits to public outlays for clinical lab testing, the Australian pathology market has consistently grown against the cap at or above 5% since 2011.

The Australian pathology market has continued to grow despite an economy weakened by the slowdown in Asian infrastructural development. Australian economic growth has been reliant on now declining private investment in domestic infrastructure and operations related to mining, which are linked to Chinese and broader Asian demand for steel and other industrial commodities. Through this period of tapered mining development, the Australian healthcare market has continued to grow as a result of aging and the existing high standard for quality of care. Kalorama Information expects the Australian IVD market to grow at a rate slightly exceeding global IVD market growth through 2017.

For additional analysis of the Australian IVD market- including market size and growth of all IVD segments - as well as trends in Australian health care and clinical testing, interested readers should consult KI’s report IVD in Australia.