• by esalazar@marketresearch.com
  • November 5 2014
  • POL

How and Where IVD Will Find Growth in the Global POL Market - Part 2

How and Where IVD Will Find Growth in the Global POL Market - Part 2

(The first post of this series reviewed growth prospects for several POL test segments. Here the global POL market is discussed in terms of its regional segments)

Regulators and payers worldwide have been forced by the proliferation of point-of-care (POC) and near-patient test devices to address the allowable and suitable role of the physician office laboratory (POL). Payer acceptance of POL testing has varied. In some countries, the POL has been supported by higher schedule fees. In others, lab certification remains required to perform all but the most elementary tests (e.g. pregnancy tests, dipstick urinalysis, blood glucose by strip). As the incubator and test bed for many near-patient and decentralized in vitro diagnostic (IVD) technologies, the United States is also the leading POL market with the extensive penetration of in-office testing. Remaining POL markets worldwide are defined by the strong stance of regulators and payers who have effectively both crafted and blocked POL diagnostics market development.

Today, U.S. POLs perform roughly 9% of all clinical IVD testing in terms of volume. POL testing in the United States has largely been enabled through CLIA certificates of waiver. Waiver labs are able to perform CLIA-waived tests or a large body of tests deemed to have relatively low risk of user error and without risk of significantly impacting patient health. Nine out of the ten most-performed POL tests in the United States are CLIA-waived, indicating the importance of the device classification scheme in developing decentralized testing markets. Device innovation and marketing to practices is the key driver to the U.S. POL market. The IVD industry has unceasingly appealed to practices’ desire to generate additional revenue in the face of declining payments while also trumping the POL’s role in engaging patients through shorter turn-around in testing. The U.S. market is projected by Kalorama Information to lead all developed POL markets in terms of growth through the next five years.

A significant European IVD market, Germany is also the continent-leading POL market in terms of size. Future prospects for growth in the German POL market, however, have been blunted by repeat cuts to clinical testing or pathology payments under the public insurance program, GKV. Lab industry consolidation and testing volume concentration has resulted. Meager and declining reimbursement, a healthcare industry-wide push towards efficiency and the presence of an alternative to POLs (Laborgemeinschaften or local, physician-supported labs) have conspired to limit the potential of the German POL market. Additionally, test schedules under GKV and private insurance (GOÄ) restrict German POL testing to a select number of procedures.

Japan is well-known to U.S. POL market players as a leading overseas market for rapid flu tests. A significant portion of the Japanese POL market is represented by rapid flu tests, which were permitted for use by physicians and required prior to Tamiflu prescription. The Japanese Ministry of Health, Labour and Welfare (MHLW) has otherwise been slow to embrace other point-of-care testing (POCT) devices and products. The Japanese POCT market remains centered on hospital and emergency care even with recent POCT approvals. The adoption of traditional POL tests as part of Japan’s preventative care programs (such as Tokutei Kenshin) is key to Japanese POL market development, but will depend upon further regulatory easing in regards to POCT. Aging represents the only appreciable driver in an otherwise low-growth Japanese IVD market. Japanese producers of POL testing products remain conspicuously active foremost in foreign markets as the domestic market remains undeveloped outside of rapid flu tests and other common POC tests.

Overall, the rest of the world (ROW) or collection of mainly middle-income and developing countries outside of Europe, North America and Japan represents only 5% of the global POL market. Healthcare infrastructure is developing rapidly in many ROW countries, though clinician experience with POL tests remains scarce. Traditional clinical lab resources are lacking in many ROW countries, and POLs are even more of a stretch for developing healthcare systems. While nascent, the ROW POL market has seen recent growth through the adoption of Western healthcare hallmarks like in-office testing. In India, rapid growth in out-of-pocket and private insurance payments has encouraged the build-out of private clinics and primary healthcare centers. Many such businesses perform in-office tests such as CBCs, ESR, glucose, chemistry panels, lipid panels, and urinalysis. Private patients in ROW countries expect high standards of care, including in-house diagnostics that bypass substandard local lab resources and impact patient perception of care during the visit.

The global POL market is experiencing a convergence in terms of test demand. Rising and established living standards in the developed and developing world respectively have created common health issues such as diabetes, hypertension, heart disease, and obesity. Demand is consequently fast growing for POL tests such as lipid panels, HbA1c, and cardiac markers. Physician office lab market players in one region can now expect to find comparable reception for their products abroad.

Kalorama Information’s latest report on the global POL market, Physician Office Laboratory Markets, 3rd Edition, is now available. The report comprehensively covers regional markets and test segments in the market for non-hospital, near-patient IVD product market.