The In Vitro Diagnostics Market

In vitro diagnostic testing costs little to the healthcare system and contributes much to clinical practice. For some time this has been stated as educated conjecture; a recent study of U.S and German physicians offers proof. The study found that 66% of clinical decisions made were based on a diagnostic test, while the costs of those tests were just 2.3% of healthcare expenditure (Rohr U., Binder C, PLoS One. 2016). When the cost-effectiveness of in vitro diagnostic testing is then considered along with beneficial effects on treatment outcomes, therapy choices, and hospital management, there should be little surprise about the amount of interest in IVDs and the amount of activity in the market for them.

 Market and Growth

IVD testing is a 69 billion-dollar market worldwide, as seen in this figure:

The industry continues to push issues and develop solutions for diseases that fall into the paradigm of early testing benefiting outcomes. It can even claim that some known healthcare problems in some way are the result of a lack of testing. Anti-microbial resistance continues to be an area where IVD shines; there is a growing realization that blind prescribing of antibiotics could be reduced with faster and more targeted testing.

Despite great attention and much action, the opioid crisis continues to plague the United States and countries of the world. 2018 total overdose numbers remained over 70,000, per CDC statistics, indicating that the problem is still severe. The American Association of Clinical Chemistry released a position statement at their 2019 convention, calling for increased collaboration between clinical laboratories and other stakeholders. Early detection of cancer and the popularity of consumer genetic tests are also likely contributors to increased recognition of IVD testing.

While this is happening, various worldwide payor schemes are pressuring prices. The response is consolidation of lab operations and facilities. Same with IVD vendors. Consolidation remains the rule in the industry among both customers and vendors. Top-tier IVD companies accounted for some $55 billion of IVD product sales last year. Part of this development is related to organic company growth but also to strategic acquisitions that add revenue streams and product innovations.

Indeed, the top tier plus next-tier companies listed in the market tables in Chapter 2 of this report – less than 40 companies – account for a majority of the world market for IVDs. The remainder is held by 100s of companies, some of which specialize in specific test segments and others that serve their local markets.

That should foretell no lack of dynamism in the industry. Beyond the market numbers, the pace of mergers and acquisitions is brisk. There are also IVD startups and ventures. According to an August 2019 estimate from EY Parthenon there were $3 billion dollars invested in IVD-related businesses and more than 170 investment rounds between May 2018 and April 2019. There were also over 9 IPOs worldwide, raising $500M for diagnostic-related ventures. These new ventures create technology that may fail or may create the next Foundation Medicines, Aleres or Pacific Biosciences that will be consumed by a larger player in the future. Or like Illumina, they may yet grow to become technology leaders and dominant in their own right.

This technology innovation produced by these companies and ventures will run up against another trend: value-based testing. What clear benefit does a given new technology add to the status quo of practice? How does a discovered biomarker relate to the doctor and the patient? The EU IVDR directives insert clinical validity into requirements directly into permission to market a product in Europe, with staggering processes and paperwork requirements, and an upshfiting of classification where contagious conditions or expensive treatments are involved. In the United States and other nations, expect these trends to enter in the payment process if not the regulatory one. Because in vitro diagnostics are so integral to patient care, particularly for oncology, developers must be aware of how quality and efficacy data pertaining to their device will be used.

The diagnostics industry spends a fair amount on research and development compared to other industries. (Roche spent $1.4 billion on diagnostics R&D in 2018, bioMérieux spent $326 million and Sysmex $158 million.) These investments and technology-driven M&A activity pay off. The industry now uses technologies that would not have been thought of when the first edition appeared two decades ago. Their influence is felt in personalized medicine, inherited diseases, pathogen detection, antibiotic resistance testing, blood banking and much more to come. Yet innovation has come with challenges, and the industry is also subject to regulation, price scrutiny and value-proving as much as any part of the healthcare system and perhaps more.

IVD Market Highlights

  • Cancer and Infectious Disease Drive IVD Sales: Tissue-based testing for cancer and molecular tests for both cancer and infectious diseases are the growth engine among larger segments; growing at 50% higher than the overall market. Concern over sepsis and respiratory conditions should ensure that infectious disease will remain in the fast-growth categories. Specialty immunoassays, continuous glucose tests, mass spectrometry and inherited diseases are other large and high-growth segments.
  • Clear Majority of Market Outside US: 58% of the market is now outside of US. Developed markets (N. America/Europe/Japan) still make up the bulk of IVD sales but growth is dependent on developing nation IVD markets. Among these markets are China, India, Korea, Turkey, and Brazil but IVD vendors are finding new emergent nations, like the Philippines at 9% revenue growth or Malaysia, with 8% growth. There are others. Both Colombia and Romania are charting better-than-world growth rates with 6% CAGR. There is also an IVD market recovery in Europe and growth in Japan. Chapter 3 has estimates of the global IVD market.
  • Mass Spectrometry (MS) Has Arrived: MS is a significant category in the market, especially in developed markets, for the identification of bacteria, fungi and mycobacteria. The MALDI-TOF market has exploded in recent years in microbiology labs, thanks largely to the IVD regulatory approval of the VITEK MS and MALDI Biotyper Histopathology is a new area of interest – Bruker Corp is developing technology to make MALDI imaging viable in histopathology. Throughput and operational complexity are limits, despite this fast growth in usage.
  • Migration, Customer Protection in the Core Laboratory: Major chemistry vendors are developing improved models selling their existing customers on staying with them – to preserve and expand revenue, as well as create barrier entry against other vendors in a shrinking lab environment. Footprint improvements, IT enhancements, EMR, automation and expanded menus are part of this change. While this is not part of traditional IVD commercialization, web-based and TV marketing has helped in a few categories and usage of such mechanisms would boost this category.
  • Companies Buy to Grow: No one company owns all the technology to compete in an increasingly complex world. Chapter 2 lists over 60 recent mergers and acquisitions related to IVD. Significant recent deals. Last year Abbott brought POC leader Alere into its operations, completing an acquisition finalized in 2017. Beckman Coulter Life Sciences acquired Cytobank in June 2019, a privately held, single cell data analysis, software as a service (SaaS) company. Beckman Coulter Life Sciences recently acquired Labcyte, best known for its Echo acoustic droplet ejection technology. In June 2019, Meridian Bioscience completed its purchase of GenePOC with an eye towards a syndromic testing strategy. Thermo Fisher Scientific acquired Slovakia-based mass spectrometry software developer HighChem, Ltd. in June 2019.
  • Hospitals Driving Point of Care: It is a mistake to think that point of care is only used by physicians or self-testing. Hospitals are by far the biggest users of rapid IVD tests, and decentralizing certain tests for improved outcomes can boost the right system if the cost case can be made. The direct-to-consumer trend, recently successful in genomic type tests, is one to watch. OTC HIV, cholesterol and colon cancer tests are available alongside well-established pregnancy and glucose tests. Individuals can purchase lab tests in retail outlets or via the Internet.

The world market for diagnostics is estimated at $69.2 billion in 2019 and is expected to grow 4% annually to $85.2 billion by 2024. This includes all laboratory and hospital-based products, and OTC product sales. Previous editions had growth at 6%. What to make of the recent lower single-digit growth? Faster growth is possible; if the potential of sequencing and personalized medicine testing is fully realized, 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.

All of the major IVD companies reported double-digit increases in their sales in China with growth in the other top emerging markets: Brazil, Turkey, Korea, India, Saudi Arabia and Mexico. Other emerging markets of interest for IVD vendors were Colombia, UAE, South Africa and the Eastern Europe region. These countries continue to invest in healthcare infrastructure and insurance coverage for a growing more affluent middle class.

The market continues to grow, but what the dollars represent is changing. Twenty years ago, clinical chemistry and immunoassays were most of testing. Still today, the traditional core lab test segments – chemistry/immunoassay, hematology and coagulation – make up 34% of the dollar value of the IVD market in 2019, while they are over sixty percent of tests run. As molecular, infectious disease, and cancer tests increase in importance, the market share of these core tests will decrease to 29% in 2024.

Watch Point of Care

Point of care (POC) testing attractions heavy venture capital and company interest. POC testing blends clinical & traditional medical engineering with telecommunications, information, and computer science, opening niche markets for POC testing and devices.

Diagnostics and patient monitoring will play a larger role in POC testing. Newer technologies entering developing countries, such as smartphone-linked diagnostic devices, can make huge differences.

POC testing’s past success hinged on developing tests that employed user-friendly techniques and alternative samples. Future success for point of care testing depends on value-added dimensions to POC tests, already in progress. Currently, all high-end glucose monitoring devices offer software and connectivity that allows diabetics to better manage their health. Test services for HbA1c, paternity, coagulation, and other tests provide physician consultation apps.

POC testing has contributed heavily to diagnostics market growth over the past 10 years. Health insurance giants Aetna, UnitedHealth, Kasier Permanente – together with research organizations and IT companies – are collaborating to personalize medicine using big data.

POC testing has contributed heavily to diagnostics market growth over the past 10 years. Health insurance giants Aetna, UnitedHealth, Kasier Permanente – together with research organizations and IT companies – are collaborating to personalize medicine using big data.

Immunoassays Hang On

Immunoassays are important in the IVD instrument market and have been crucial in clinical lab medicine since the mid-1960s. Immunoassays are used to diagnose and monitor diseases & conditions. Among the different types of immunoassays:

  • Automated
  • Manual
  • ELISAs
  • Enzyme Immunoassays
  • Bead Arrays
  • Microarrays
  • Immunoassays employing mass spectrometry

Since the publication of the human genome, immunoassays have been revitalized, generally referred to as post-genomic medicine. Post-genomic medicine employs tests based on protein, and nucelic acid targets derived from human genome research. Gene identification comes first, followed by detecting physiological elements such as proteins, hormones, and enzymes expressed by genes.

Proteins, enzymes, coenzymes, and other cellular elements are major players in metabolic pathways that promote and predict disease evolution. This combination of genes, proteins, and pathways makes for a comprehensive toolbox for post-genomic science.

Coagulation: A Mixed Bag

Hemostasis (stopping blood flow) regulates blood flow and clot formation with enzymes and proteins, relying on coagulation, fibrinolysis, and platelet aggregation. Anticoagulant drugs prevent platelets from clumping, reducing the risk of arteries clogging and in turn stroke or heart attack.

The coagulation discipline is in the limelight thanks thanks to the discovery that coagulation factors are independent from the development of myocardial infections, strokes and deep vein thrombosis, cancer, inflammatory syndromes, and obstetric complcations. Conditions in which coagulation factors are implicated include:

  • Post-surgical bleeding due to Aspirin or Plavix
  • Spontaneous abortion
  • Pregnancy issues

In vitro diagnostics market’s coagulation segment is a mixed bag of routine tests and intensive investigation of abnormal tests with genetic markers and special immunoassays run on dedicated coagulation analyzers and core lab chemistry & immunoassay instruments.

Histology: Traditional Key to Cancer Testing Threatened

Histology and cytology study tissues and cells, respectively. Histoligical analyses of tissue involve pre-analytical sample preparation and advanced staining.

Histology processes cervical fluids, sputum, and tissue that has been biopsied. Specimens are stained on glass slides to characterize targeted cellular constructions, tissue morphology, and cell componenets. Technologists read the slides using microscropy, while pathogists examine slides with suspicious cells. Histological tests primarily test tissue for cancer, or cervical fluid for infectious agents. Biopsied organs or tissues are processed and analyzed similarly.

Pathologists identify tumor sources in most cancer cases, sometimes confirming cancer without finding the sources. Pathologists employ different techniques  to improvide difficult diagnoses, including in situ hybridization (ISH), immunohistochemistry (IHC), immunofluorescence (IF), and molecular analysis of tumor cells.

In Vitro Diagnostics Market Research

The latest in IVD market research covered in Kalorama Information’s reports.

From Patients to Providers: Transmitting Information in IVD

Diagnostics are about information delivery. Transmitting usable, valid info to healthcare providers and patients is crucial to lab operations. Significant trends in IVD include:

  • Worldwide reorganization of decentralized healthcare delivery
  • Advancement of outcomes-based disease management within test economics
  • Access to worldwide databases & experts via smartphone

Kalorama’s clinical testing market reports address these trends in detail.

Core Lab’s Expansion

Routine laboratory tests in chemistry, immunoassays, urinalysis, microbiology, coagulation, and HPV cytology are consolidating into the core lab. More analytes previously found only on dedicated immunoanalyzers have migated to consolidated work stations, including

  • D-Dimer (coagulation)
  • Vitamin D
  • HgA1c (diabetes)
  • BNP
  • NGAL
  • anti-CCP
  • hsCRP
  • cystatin
  • HIV
  • HCV
  • procalcitonin
  • HE4 cancer marker
  • Markers for Graves’ dease

Traditional specialization barriers including microbiology, hematology, blood banking, immunology, and anatomical pathology are fading, making the core laboratory a lab medicine hub. Economic pressures, labor shortages, and continual additions of new diagnostic tests to lab menus are expanding the core laboratory. At least 80 immunoassays are currently available in clinical workstations. The Worldwide Market for In Vitro Diagnostic (IVD) Tests, 10th Edition  predicts that automation is likely in the core lab’s future.

Smaller hospitals are amalgamating routine tests from different disciplines into one core laboratory. New tabletop diagnostic instruments for small labs are multianalyte workstations running chemistries and many immunoassays. Current diagnostic instruments for clinical chemistry, immunoassays, hematlogy, coagulation, urinalysis, and microbiology can link to laboratory information systems and central lab tracks.