Approximately 60-70 per cent of medical treatment hinges on diagnosis. Thus, it is no surprise that a June 2013 Frost & Sullivan report finds that the global in vitro diagnostics (IVD) market outpaces pharma industry growth in some segments. The report also forecasts that while the US and Western Europe are presently the largest IVD markets, APAC and Eastern Europe are projected to be the fastest growing. APAC currently makes up just around two per cent of the global IVD market in terms of revenues so there is tremendous scope for growth.
Global IVD players have a dominant presence in most emerging markets and this will not change overnight. Faced with stagnating and even sliding growth in the matured markets these players are naturally flocking to newer markets. The IVD market is moving; from the culture-based tests, immunochemistry and clinical microbiology of the last decade, to the advent of scaled down point-of-care models and molecular diagnostic assays in this decade.
The next decade will see further automation while the main-streaming of personalised medicine will generate a need for more personalised diagnosis as well as the seamless integration of screening and treatment. Companion diagnostic test kits are already part of the repertoire of major pharma companies like Roche, Abbott and J&J who have built up in-house diagnostic divisions or acquired diagnostic companies in the last decade.
So is there a challenger to this ranking in India? There is no doubt that market is ripe for a perfect storm. As our cover story reports, (Is India finally emerging as an OEM for IVD?, pages 26-29) home grown players have been content to play at the lower end of the market but there are signs that they now have the confidence to find their niche. Some companies have focussed on growing by acquiring (Transasia Bio-medicals has strategically acquired global companies clearly counting on leap frogging the technology curve) while others are focussing on the organic model.
Besides bringing the best of the world to India, domestic players also need to produce indigenous IVD products so that they can offer cost effective alternatives, both for Indian patients as well as other emerging markets. The point-of-care segment too is a volumes driven market and needs a lot of customisation as per local levels of technical support, infrastructure and operator efficiency. As governments and insurers across the world seek to lower healthcare costs while at the same time providing universal access to healthcare, indigenous products (both medicines as well as diagnostic kits) are the answer to these two seemingly opposing goals. With the focus on patient outcomes only set to increase, the role of accurate diagnosis in increasing cost efficiencies will only make domestic IVD manufacturers more crucial to the healthcare ecosystem.
But for this to happen, IVD manufacturers have to first have an ecosystem which allows them to thrive. Thus, there is need for a concerted effort on the policy front to press home our advantages. Luckily this is finally happening, albeit the success stories are still the exception rather than the norm. Tax structures across states need to be simplified; there needs to be a mandate to roll out more countrywide screening initiatives through PPPs with IVD players and healthcare facilities. These are all steps which the Chinese government has taken in the past decades. Today, there is a vast difference in the size and scope of the domestic IVD players in the two countries as they vie for a slice of the global IVD pie. Are our policy makers listening?
The growth potential of the IVD sector is good for patients, because it has attracted more players and competition has pushed down costs while increasing access to a wider array of tests. Thanks to cut throat competition, diagnostic labs offer upto over 60 per cent discounts for certain packages. The growth is not restricted to the metros. Major players are expanding to the hinterland (See story ‘Smaller cities: A new hub for diagnostic labs’; pages 30-32).
Of course it is not all smooth sailing. With a fragmented market, there is always the possibility of inaccurate results, especially from smaller less established labs. Standardisation of rates and accreditation are thus the need of the hour.
The next wave of diagnostics will need a combination of clinical knowledge, medical electronics, as well as IT skills to store and retrieve the massive amounts of data from diverse sources. We have these skill sets but vital links in the ecosystem need to the strengthened. As IVD manufacturers in India strive to catch the next wave, let’s hope they can ride the wave rather than be washed up in its wake.
Viveka Roychowdhury
Editor
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