Scepticism increases among German in vitro diagnostics firms

The 2013 turnover expected by German in vitro diagnostics producers are significantly lower compared to last year, according to a survey of members carried out by the German Diagnostics Industry Association (VDGH) presented in January at the Diagnostica Forum in Berlin.

Karl-Heinz Büscher (right) and Manfred Partsch.
Karl-Heinz Büscher (right) and Manfred Partsch.
Karl-Heinz Büscher (right) and Manfred Partsch.
Karl-Heinz Büscher (right) and Manfred Partsch.

Whilst more than half of those surveyed expected improvements in 2012 only about a thirdforecast this for 2013. Carried out in December 2012, the survey showed only 35.4% of members believe their economic situation will improve. At first glance this may look optimistic, says Dr Martin Walger, Managing Director of the German Diagnostics Industry Association. It is in fact thought provoking, considering that 56% of members expected a positive development for their company when surveyed the previous year. The number of those expecting stagnation accordingly rose to more than half. However, only 10% of those surveyed are predicting deterioration of their situation, and this figure is only marginally higher than the prognosis for 2012.

There are unlikely to be any effects on investment planning and expenditure on research and development, based on the information provided by the 48 in-vitro diagnostics companies surveyed by the association in December 2012 – to the contrary, the previous year’s values are even being exceeded – only the dynamics regarding the size of the workforce are expected to slow down. With around 10%, slightly more companies declared their intention to reduce their workforce than did so the previous year. Vice versa, at around 50%, slightly fewer companies announced that they would increase their workforce.

Asked about the greatest obstacles against development, almost half of all companies cited high cost pressure in the German market. In second place was consolidation and concentration on the customer side, followed by the reimbursement levels set out in the German statutory health insurers’ fee schedules, which companies consider to be too low.

Member companies also complained about cuts to reimbursements for medical laboratory services and about the drawn-out procedures for innovations before they receive approval and acceptance in terms of the range of services covered by the Germany statutory health insurers.

Test approvals are too slow

This last point in particular was criticised by Dr Karl-Heinz Büscher, Member of the VDGH Board and Head of the Central Lab Marketing Automation Department at Siemens Healthcare Diagnostics, who said, ‘The acceptance of new laboratory tests into statutory medical care in Germany takes far too long and has almost come to a standstill in the last few years.’ Since 2009, he added, out of thirteen suggested laboratory innovations, only one test has been approved for acceptance into the fee schedules that determine the level of reimbursement for medical costs by the statutory health insurers in Germany – nine other tests are still under discussion.

This situation, he said, is unacceptable in the long run, and he called for the introduction of faster assessment procedures for innovations in the future.

The German diagnostics industry has positive expectations regarding the planned new legislation on the early detection of colon and cervical cancer, which has already been negotiated in the Federal Parliament. This new law envisages an official invitation to screening examinations sent by health insurers to all their members. However, the so-called Law on the Early Diagnosis and Register of Cancer (KFRG) will not come into force for another three years to allow for an implementation period, as Dr Ulrich Orlowski of the Federal Ministry of Health explained at the forum. Therefore, diagnostics industry representatives do not expect a related boom in business much before 2016. More than 50% of companies surveyed also considered personalised medicine to be a very promising area, although currently more than half of those surveyed are convinced that personalised medicine does not have any relevance for their companies.

Having discussed the outlook for 2013, the forum considered the 2012 business year. Based on the first three quarters sales statistics, the German market showed negative growth in in-vitro diagnostics of 1.5%. ‘We have a twofold picture here,’ explained Dr Martin Walger. Laboratory diagnostics had an upward trend of just under 3%, but there was an almost 8% decrease for the fast tests sector. He believes the reason for this decrease to be the large drop in tests for self-monitoring of blood glucose. ‘The health insurers have stopped reimbursing self-tests for blood glucose monitoring for Type 2 diabetics who are not insulin dependent,’ he said, and the budget for the test strips generally has been tightened a lot by the health insurers and the Association of Statutory Health Insurers.

Market crash effects

With this negative balance, Germany is in line with the European trend, as a look at growth in Europe is also sobering, Dr Walger said. Only three of the larger European markets (Belgium, Switzerland and Great Britain) still show positive growth based on preliminary sales statistics – in 2011, however, all eight larger European markets still showed positive growth. ‘The crash in the Southern European markets, which already loomed in 2011, is dramatic,’ he said. Greece is in first place with a minus of 10.7%, followed by Portugal with a minus of 9%. Italy, which in 2011 still had a turnover of €1.7 billion, putting it in third place behind Germany and France within the European market, has a negative growth of 3.6% based on preliminary figures. The EU-wide growth rate of almost 1% seen in 2011 is unlikely to have been achieved in 2012, Dr Walger pointed out.

Professor Joachim Thiery MD, President of the German Joint Association for Clinical Chemistry and LaboratoryMedicine and Director of the Institute for Laboratory Medicine, Clinical Chemistry and Molecular Diagnostics (ILM) at the Leipzig University Hospital, looked at the future of diagnostic procedures. The automation and networking of analytical processes, in the shape of highly standardised methods, has almost been achieved in Germany. Around 80% of diagnostics is now being performed by socalled high-throughput platforms, which have continued to revolutionise laboratory diagnostics worldwide since the 1950s. But, the professor said, ‘We are going through a saturation phase regarding automation.’ Instead, new approaches, such as metabolism and protein analysis will become much more important in the future.

Re-agent-free instruments, such as mass spectrometry, are increasingly used in the context of multi-parameter analysis, Prof. Thiery said, and sees this sector’s future in the development of systems medicine laboratory diagnostics that takes into account the increasing density of information and which further develops laboratory-focused bioinformatics. Even if, he added, medical demand is not quite keeping up with existing technological developments, such as seen in metabolic and protein analysis, sooner or later it will become an important growth area for diagnostics companies.

21.03.2013

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