• by Bruce Carlson
  • September 11 2018
  • IVD

5 Fast Facts About the IVD Market

The world market for diagnostics is estimated at $65 billion in 2018 and is expected to grow 4% annually to $77.8 billion by 2023.  This includes all laboratory and hospital-based products, and OTC product sales.  Previous editions had growth at 5-6%.

Will growth like that be possible in the future?  It is possible; as the potential of sequencing and personalized medicine testing is fully seen such rates might return.  For the next five years, slowdowns in instrument purchasing decisions, the effects of PAMA legislation in the United States, cold markets in Europe, decreasing reimbursement for glucose and low-cost competition (in an essential IVD market), as well as the migration of previously low volume tests to integrated analyzers (that decreases the cost per test) must be weighed against the positives of an aging population, increasing procedures and test improvements.   The consolidation of lab customers is also a concern.  

• Roche Leads:  Roche Diagnostics (2017 revenue of $12.9 billion) is the number one IVD company. Abbott Diagnostics’ acquisition of Alere added some $2 billion to the company’s revenue base and opened new vistas in point-of-care testing. This placed Abbott firmly in the number two spot.  The significant gains made by companies that market infectious disease immunoassays, cardiac markers, histology and molecular diagnostics illustrate several important market phenomena. One is that these areas have been the growth engines for the past 2 to 3 years and will continue to be so for the near future. Companies including bioMérieux, Danaher, Diasorin and Sysmex have capitalized on their investment in emerging markets, in molecular tests and tests for infectious diseases. This has provided them with a five-year growth stream that beats that for the IVD market as a whole.

• New Entrants in IVD? Here come the giants. Recently Amazon and Berkshire Hathaway joined IBM, Apple, Google, Dell and other large company names that are entering healthcare, making their mark in transforming crude test results into actionable medical information. The revolution in bioinformatics is allowing clinical and traditional medical engineering to blend with components derived from the telecommunications, information and computer sciences industries. While not all their activities are in diagnostics, they have the breadth to make big changes, and many of those changes will have IVD market impact.

• Novel Biomarkers: Recently biomarkers for Alzheimer’s and Traumatic Brain Injury (TBI) have entered the fold. In July 2018, the FDA granted breakthrough device designation to Roche's Elecsys beta-amyloid (1-42) CSF and Elecsys Phospho-Tau (181P) CSF assays, both in vitro diagnostic immunoassays in cerebral spinal fluid to evaluate patients for Alzheimer's disease and other causes of dementia.

• Cancer Testing in Emerging Countries: As the economy improves in developing nations, concerns adjust to other diseases. Though Brazil struggles with HIV and dengue, cancer is now the second leading cause of death in Brazil. Among urban Chinese, cancer is the leading killer with lung cancer as the most dominant contributor. In Eastern Europe the histology/cytology segment is one of the smallest but also the fastest growing. While advanced cancer testing is still a developed world phenomenon, vendors of advanced testing will benefit from the position of these tests in private healthcare spending versus the clinical chemistry and immunoassays funded largely by the public sectors in these nations.

• Glucose Testing: Glucose testing has suffered as a category due to pricing strategies that continue to discount the cost of meters and strips. Further, European payers continue to restrict support for glucose testing for non-insulin dependent diabetics. However, continuous blood glucose monitoring is coming to the rescue - fueling this market in developed nations and expansion of the market is driven by government sponsored programs that negotiate the lowest price possible.