Clin Lab Expo Opens Today
IVD Market Ready for Growth Despite Sagging Economy
By Bill Malone
When the Clin Lab Expo opens today with some 650 exhibitors and more than 1,800 booths, laboratorians from around the globe will be taking stock of the largest show of lab technology and services in the world. While this year’s expo takes place in times of economic uncertainty, industry analysts are predicting slow but steady growth, with great opportunities for companies that can meet labs’ evolving needs. Recent market trends also offer evidence that the diagnostics industry is on the cusp of change. The stalwart, high growth areas of the market like diabetes are starting to give way to segments like molecular diagnostics and point-of-care (POC). And now more than ever, companies are betting on automation and integrated workcell type instruments to help even small labs run more efficiently in an era of continued budget cuts and labor shortages.
“Over the past two decades, the diabetes testing market was a huge growth driver, with double-digit growth almost every year. But now all of a sudden that wonderful high growth curve is taking a dive and flattening out, particularly in the U.S.,” said Mark Hughes, vice president and a senior consultant with the healthcare market research firm Enterprise Analysis Corporation. “Prices have declined because of more competition and from tougher negotiations with managed care. So now if a company wants high growth, they have to be playing in the molecular diagnostics sector of the market.”
With an expanding global base and stable demand, the worldwide IVD market is still on track to surpass $56 billion by 2012, according to Kalorama Information’s latest report, “The Worldwide Market for In Vitro Diagnostic Tests.” In a special update to the report addressing the economic crisis, the market research firm stands by its prediction of up to 6% yearly growth despite the recession, though other analysts are somewhat more conservative. The IVD industry has a long history of surviving cutbacks and pricing pressures, notes the report, and demand from emerging markets and an aging population isn’t likely to let up.
Informatics and POC Testing
The federal government’s hard push for connectivity in health IT, as well as personal health records, has not escaped IVD companies, and laboratorians may see IT bringing different lab components and hospital departments closer together, explained Greg Stutman, a consultant with Boston Biomedical Consultants (BBC). “Information technology will become increasingly important in the healthcare value chain in the coming years as both vendors and customers look to develop ways to best leverage the high amount of data produced by IVD products. The ability to link lab results with those from other departments of a hospital, such as imaging or POC, will be critical for physicians to provide the most accurate diagnosis and recommended treatment for patients. However, while some IVD companies do have the access and infrastructure to support IT projects, many currently work with outside providers to develop the necessary tools, not to mention the dedicated IT, LIS, and data management companies in the field.”
According to the Kalorama report, innovation in both IT and instrumentation form a “technical synergy” that will keep IVD at the center of disease management. POC testing is on the frontier of many of these technical innovations, said Hughes. “On the point-of-care side, we will see miniaturization, micro-fluidic, and biosensor-based products out there, though they do take time to reach the market.” Hughes gave the example of the Abbott iStat POC device, which employs a miniaturized, silicon-based thin film biosensor technology that had been around for years but has only recently seen greater market penetration. While POC testing hasn’t seen the double-digit growth that companies had hoped for, Hughes predicts continued strong growth, and he noted that companies are currently working on new POC platforms for performing quantitative immunoassays and even molecular-based tests using various types of microfluidic or biosensor technologies. “There is little doubt that we will see greater adoption of these technologies in the future. And it may allow the further migration of tests currently performed in the central lab to the outpatient clinic, ER, or doctor’s office. However, I don’t see these rapidly replacing many of the current tests now in place for POC, such as coag tests, blood gases, and rapid strip tests.”
Molecular Dx Driving Growth
So in such a competitive market, what will keep some companies afloat while others have trouble? According to Enterprise’s Hughes, one of the keys is playing in a high-growth market like molecular diagnostics. And though POC is a relatively smaller chunk of the overall market, Hughes said companies that don’t take the opportunity to get into this market now may have a tough time in the long term. “If a company wants to see high growth, they’ll have to be playing in molecular diagnostics. And within that segment there are certain areas that have a particularly high growth potential.”
Hughes pointed to molecular testing for hospital acquired infections as one such high-growth area. In a short span of time, this market has gone from a few million dollars to nearly $100 million and will continue to grow, he said, potentially reaching more than $400 million in the next few years. Another example in the molecular segment is HPV testing, now almost a $300 million market, that has the potential to be much bigger.
BBC’s president, David O'Bryan, PhD feels that test menu expansion, particularly in oncology, infectious disease, and selected genetic disease testing (e.g., pre- and post-natal testing, cardiac disease and cancer risk factors), along with the growing area of companion diagnostics that aid in therapy decisions, will all remain driving forces behind the molecular field, along with improvements in automation and walk-away features.
What Happened to Personalized Medicine?
Laboratorians have been talking about personalized medicine and companion diagnostics at least since the availability of her2/neu testing more than a decade ago. Hughes recalled a forecast then that by now, personalized medicine would be a huge market. This segment remains relatively small in the grand scheme of things, yet its great potential remains, he said. “What’s attractive about these tests is that they have the potential to be priced at a very high value, such as the Oncotype DX breast cancer model where you can potentially save tens of thousands of dollars in unnecessary chemotherapy, so your test can command a much higher price.” While such tests will never reach the high volumes of routine chemistry panels or CBC, they won’t be priced at a nickel a test either, said Hughes.
“We are getting there; we have many more such tests now that can be useful in helping to select therapies. The markets for them aren’t necessarily that big in terms of the patient volume, but the value will be very high.” Hughes thinks it will be another 10 years before personalized medicine becomes a major piece of the overall IVD market pie. “It’s at the embryonic stage right now, but it I think it will hit a growth curve in five or ten years. Many of the major IVD companies also see the opportunity and are pursuing it.”
Though the Expo can be a lot to absorb in a few days, the reason laboratorians show up year after year is to gauge firsthand how new technologies and trends will shape their labs. As laboratorians make their way around the exhibit floor, one major trend might be stand out: automation and workcell type instruments. “In laboratory testing, specifically chemistry and immunoassay, customers will continue to demand a consolidated solution to address labor shortages and budget cuts,” said Stutman. “All of the top chemistry and immunoassay companies currently offer solutions to address pre-analytics and the integration of chemistry/immunoassay.” Though these types of instruments were once only suited for very large hospital or reference laboratories, the trend is for these to move down market into mid-size and small hospitals.
A more unexpected trend is the changes going on in the urinalysis field. Although this had been considered a more mature segment of the market, companies like Iris now have come out with instruments that automate the microscopy portion of testing and integrate it into a system that can perform urinalysis chemistry strips, noted Hughes. Another company, Sysmex, is employing flow cytometry for urinalysis. “This is becoming a more automated field. It’s an old mature field that is now changing and growing again,” he said.