September 15, 2010 (Vol. 30, No. 16)

Emphasis on Automation and Information Systems Increases Test Usage in Variety of Settings

The in vitro diagnostics industry is on an upward trajectory in a difficult time for most industries. While individual companies have had their successes and failures, in total the industry has grown, if not briskly then steadily, by adapting to change.

For the past 15 years, the number of assays introduced has been growing at a remarkable clip. At the same time, diagnostic laboratory technology is changing dramatically due to the publication of the human genome project and advances in functional genomics, bioinformatics, miniaturization, and microelectronics.

The bioinformatics revolution has allowed scientists to mine genetic information to derive new and hopefully better markers of some of the most pressing health problems. This has contributed to growth broadly in in vitro diagnostics (IVD), but especially in immunoassays and nucleic acid tests.

These tests, however, are being launched in a time of global economic instability and rising healthcare costs. The fact is that most labs continue to run established tests that account for most of the lab’s human and financial resources.

The only way to add new tests into the toolbox is to do more with the same amount of resources, or do more with less. But how?

Automation is the answer for most labs. As a result, there has been a proliferation of new tests and lab-automation tools that remove precious human resources from mundane pre-analytical and sample tracking tasks to make time for more sophisticated ones. This phenomenon was once thought to be the purview of biochemistry and immunoassays, but automation is becoming a common feature in blood banking, microbiology, and histology, too.

The emphasis on automation has created further consolidation to large core labs. Systems for urinalysis, coagulation, and microbiology are now taking their place alongside hematology, chemistry, and immunoassay instruments in a single core lab. In larger labs they may even be linked to a common track line.

Error reduction is another reason for labs to automate. It has been some 10 years since the Institute of Medicine alerted healthcare professionals to the high cost of medical errors. Most errors are prescribing errors, but some are lab-processing errors.

Doing more with less appears to be a continuing theme. Automation and information systems are becoming the norm for hospital labs. In today’s depressed economy, these tools help labs control costs, reduce unnecessary spending, and get more for every dollar they spend.

This trend applies to small and mid-sized hospital laboratories as well as high-volume labs. For the first time, established automated technology, which is commonplace in biochemistry and hematology, is now a reality for microbiology as well.

Kalorama Information estimated the world market for diagnostics at $44.4 billion in 2009 and forecasts growth of 6% annually to $58.6 billion by 2014. This includes all lab- and hospital-based products and OTC product sales. Developed markets including North America, Europe, and Japan, respectively, make up 80% of the total IVD market. By 2014, their portion of the market is expected to decrease to 75%.

Some of the total market growth derives from increased test usage in emerging countries. Significant growth is expected in Brazil, China, and India.

Emerging economies in Asia, Latin  America, and Eastern Europe are anticipated to grow from 20% of the world market in 2009 to 25% in 2014. Overall, emerging markets will experience 10–20% annual growth, while the developed world will see annual growth of 3–6%.

For the time being, however, the U.S. is the largest single market for IVD products and has enormous impact on how the IVD industry develops. Managed care’s obsession with cost reductions is helping move testing closer to patients—encouraging decentralized testing in the home, at the bedside, and in the physician’s office.

Several trends will dominate the industry in the future. In the area of test economics, outcome-based disease management establishes guidelines and directives for patient care. Getting information to caregivers and patients is no longer an added benefit, it is a prerequisite of all lab operations.

The next three to five years will see an intensification of the healthcare industry’s emphasis on informatics, wireless communications, data networking, and cost-effective healthcare delivery. The reorganization of decentralized healthcare delivery worldwide and patient-focused medicine are having an enormous impact on the role of medical devices and diagnostic services in healthcare.

Share of world IVD market [Kalorama Information]

Bruce Carlson ([email protected]) is publisher at Kalorama Information. More information about Kalorama’s “Worldwide Market for In Vitro Diagnostics, 7th Edition,” is available at Kalorama.

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