Diagnostics: Market trends

Nat Whitney, President of Whitney Research, sums up the ups and downs of the international IVD market and reports on a fitting finale for 17 years of dedicated service

Nat Whitney, President of Whitney Research, Littleton, USA and Bejing, China
Nat Whitney, President of Whitney Research, Littleton, USA and Bejing, China

This year’s International Market Briefing (IMB) at AACC Clinical Lab Expo in Houston was a fitting transition. 17 years ago Herb Burklund of Scherago and Jerry Goldsmith, former Vice-President of the AACC, created this informative programme as a value-added service to exhibitors – and it grew from 75 attendees in the first year to 600-700 dedicated participants over the past few years. The quality of the information presented at the 2013 session was, perhaps, the best of the best and a testament to Herb as he departs.

‘International’ has meant different things to different people, now that Clinical Lab Expo includes many non-US companies. As an example, since 2010, the Chinese exhibitors have grown from 26 to 82 companies. To them, China is not international, but Europe is.

So this year Europe was included as an International Market, and Dr Juergen Schultze, President of the EDMA, presented the market data that is gathered and shared amongst companies who send in their sales data to the European Diagnostics Association, comparing country-by-country and segment-by-segment results.

In these troubled times in Europe, he compared the declines. Overall, European IVD (in vitro device) sales declined 2-3% in 2012, and are expected to decline again for 2013. The biggest markets, Germany, France, Italy and Spain, all showed declines, but Greece, Poland, and Portugal were more severely hit with declines in double digits.

The upside is that several countries expect to grow in 2013, with Poland and the Czech Republic leading the way.

‘How the Small Fish Swims in a Sea with Big Fishes’ was the title for the presentation by Stefano Gradi, former Director of International Sales for Diesse, Italy, and founder of IVY Diagnostics, srl. He presented data on the ‘fastest five’ Southeast Asian markets – Indonesia, Malaysia, Philippines, Thailand and Vietnam – and compared their growth and industrialisation with China and Singapore. These five countries have common characteristics of growing consumer expectations, aging populations, lower cost, skilled workforce, the rise of academic medical centres, government incentives for improved healthcare, and a large population of young people graduating from the universities. For comparison the US spends 14% of government budget on education while these countries average 18%. The most striking similarity of these countries is their diversity within.

While the total IVD market is still very small compared with developed countries and China, Stefano’s recommendation was to get in early and establish the brand. As opposed to the West, where ‘Self-actualisation’ is at the top of the motivation pyramid, for people in these countries, ‘Status’ is at the top.

 

Emerging markets
Once again, Greg Stutman, Vice-President of Boston Biomedical Consultants, analysed the changes in the IVD markets worldwide and compared 2012 to 2011. He confirmed that the growth in the emerging developing markets were what was keeping IVD companies afloat as the developed markets matured and were affected by pricing, austerity measures and growing market consolidation. Greg forecasted that the total IVD market would grow by 5% CAGR from $49.2 billion to $62.8 billion from 2012 to 2017, led by the emerging markets, which are predicted to be larger than the US market by 2017. By segment categories, ‘Infectious Disease and Blood Processing’, ‘Select IA segments’, ‘Haematology and Coagulation’, and ‘Emerging/Novel’ (which includes molecular) will lead the way with above 5% growth. Diabetes, which has suffered the worst declines, will continue to lag.

Noel Maria Adachi, Vice President of CAP International, talked about the growing demands for increased quality in the developing markets as incomes in those regions have increased. Government regulators have been implementing new requirements. She focused on the largest developing markets of China and India, the components of quality certification and how IVD companies can help laboratories comply, whether certified by CAP, China National Accreditation Service, or other certifications and quality control monitors. The CAP V-P discussed where most of the laboratories’ errors occur and how IVD companies can help the customer understand and control. Manufacturers must play a larger role in educating and designing products and services that improve and control quality in the hands of the users in the developing markets.

 

High expectations: POCT
With a market growing faster than central lab markets in the developing world, Point of Care (POCT) was the subject of David James of Invetec, one of the sponsors of IMB. He defined POCT as ‘fast results from minimally invasive sampling methods, using affordable consumables’. He described a cycle of expectations that start with ‘technology triggers’, proceed to ‘peak of inflated expectations’, then a ‘trough of disillusionment’, and on to the productive part of the curve he called ‘slope of enlightenment’ and then on to the ‘plateau of productivity’. With the developing market so price sensitive and the populations and potential demands so large, he discussed the benefits to cost of the increasing demand for consumables like test cartridges. His message was to include most of the complexities in the instrument and keep the consumable simple and easy to manufacture, so as to take advantage of economies of scale. Herb Burklund wrapped up the session with a sentimental [address] and a wish for the meeting to continue and flourish. The annual evaluation and suggestion survey of attendees is not yet in, but the expectation is that the 2013 edition will rank high.
 

03.10.2013

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