Release date: 2015-07-17
According to estimates by the Boston Consulting Group (BCG), the global in vitro diagnostic product (IVD) market size in 2013 was $56 billion, with a compound annual growth rate of approximately 5%. Growth in mature areas such as immunoassays and biochemical tests has slowed down to only 3% to 4%. Emerging fields such as molecular diagnostics and histology are growing rapidly, with a compound annual growth rate of 8% to 9%.
Globally, molecular diagnostics and genetic testing are among the fastest growing areas, both in terms of product lists approved by the US Food and Drug Administration (FDA) and in terms of venture capital investment. In the future, R&D innovation in the global market will gradually shift to these two areas.
Strong innovation in technology development
The market for in vitro diagnostic products in China has maintained rapid growth in the past few years. In 2013, the market size was 3.4 billion US dollars (based on ex-factory prices). It is expected to maintain rapid growth in the future. The compound growth rate will be around 16% from 2013 to 2018. Mature areas such as immunoassays, biochemical tests, etc. still account for about 2/3 of the market share. Immunochemiluminescence products and molecular diagnostics will be the biggest drivers of future growth in the Chinese market.
So looking ahead, what technologies are expected to drive future market growth?
BCG predicts that from the perspective of detection, single cell analysis, stem cell biology, genomics and proteomics, real-time analysis, microbiome biology and other technologies will be more applied to new products; from a technical point of view, Multi-channel detection, nanotechnology, sensitivity enhancement, miniaturization, higher resolution, label-free detection, etc. are expected to drive future growth; for future growth platforms for in vitro diagnostics, genetic sequencing, PCR, gene sequencing, next-generation tumors Diagnosis, cell sorting & single cell analysis, multi-channel detection platforms, etc. will be the main trends.
Despite the strong development of innovative technologies, there are still opportunities in the traditional in vitro diagnostic market. With the strong development of innovative technologies, in vitro diagnostics has ushered in a golden period of development. Although the development of new technologies is good, some “non-molecular diagnostic companies†still succeed in creating value, mainly in some specialized niche markets.
For example, Japan's Sysmex has top-notch technology in the niche market, the company's blood analyzer technology leads the market for one to two generations; Italy Sorin's sales and profit margin growth is entirely driven by Vitamin D testing, vitamin D determination in the clinic It is very common in trials; Biotest, Germany, sells the molecular diagnostics business with a focus on plasma protein testing, which has a defined growth prospect, and the risk of not being approved is also low, and the company has also promoted by providing high dividend payments. P/E ratio increased.
The main trend of China's in vitro diagnostic market
As the population ages, insurance coverage and expenditures continue to increase, and drivers such as income growth will push the future growth of the in vitro diagnostic market. The Chinese in vitro diagnostic market will present the following trends:
First, continued strong growth. The in vitro diagnostic market will continue to develop rapidly, especially in the county-level hospitals, driven by government investment. With the help of government investment, county hospitals will continue to have great demand for in vitro diagnostic products.
Second, price pressures continue to increase. The government continues to impose pricing pressures, which have a particularly large impact on the products of multinational companies. The pricing guidelines for 9,000 items, including in vitro diagnostics, are listed in the National Medical Services Directory issued in 2012, and IVD reagents are included in the project-based fee. This makes it impossible for hospitals to charge an extra premium for IVD reagents, or to use a differentiated diagnostic method to collect premiums, which will drive hospitals to prefer cheaper products. The government is increasingly using uniform tendering methods for reagents, which further increases the pressure on reagent prices.
It is worth noting that compared with local companies, multinational companies are more affected by the unified tendering policy. And the total amount of prepaid and other methods of controlling medical insurance payment may be implemented nationwide, which has prompted hospitals to have more incentives to adopt economical products. Therefore, low-cost and low-cost reagents will be more favored by hospitals.
Third, local companies continue to rise. In vitro diagnostics has been designated by the government as a key medical technology field to actively support development. Local companies are expanding their in vitro diagnostic product lines, including diagnostic reagents and diagnostic instruments, while multinational companies continue to promote local production in the value chain. Therefore, the competition between multinational companies and local companies will become more intense.
Fourth, third-party laboratories have emerged. Although third-party laboratories are still in the early stages of development in China, their development potential is huge. It is estimated that by 2022, about 27% of pathological tests will be completed by third-party laboratories. At the same time, third-party laboratories need IVD companies to provide different value propositions to hospitals, such as offering different product lines, using innovative financial models to reduce costs, and strategic partnerships with third-party laboratories.
In vitro diagnostic companies are rapidly developing with good market trends. The focus is on these aspects: China's in vitro diagnostic market has huge growth opportunities, and generally grows rapidly, especially in county-level hospitals. Low-cost economic products are increasingly important for winning market share. Multinational companies have some gaps in this area and should catch up. The ability of local companies will continue to increase, and more capital will compete with multinational companies; the competition between the two will become increasingly fierce. Third-party laboratories will become increasingly important customers, and manufacturing companies may need to develop different product strategies and sales strategies for different third-party laboratory customers.
Source: Chinese Journal of Science
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