AACC International Market Briefing
Provided by Go To Market Consulting
For the 16th time AACC hosted a market briefing on occasion of the AACC Annual Meeting and Expo to provide an overview about the latest trends and developments in the IVD industry. This is a short recap of the general trends that were presented. The forecasting period for these numbers is through 2017*.
The good news first:
And now come the challenges:
Overall, there was no reason for wild enthusiasm about the numbers presented but also no reason for despair, clinical testing will always be needed, it is not a fad like the latest mobile application or fashion item which burns hot, bright – and often short - and although a 5% annual growth rate is nothing to write home about in the big scheme of things, in an industry as established as clinical testing it ain’t half bad either.
One thing that became crystal clear, though, is that the time to ignore the emerging markets is over. Whether this means a full-blown push into China or a more careful approach to some of the other emerging markets that didn’t make it to the lime light of the AACC briefing, e.g. Indonesia or Vietnam or yet another approach is a decision each company must make for itself.
For more information about AACC visit www.aacc.org
*With the years 2011 & 2012 serving as the benchmark.
The good news first:
- Overall the IVD industry continues to grow, not by leaps and bounds but at a solid 5% CAGR across all fields and geographies, the forecast for the total market size in 2017 was $62.8 B
- Allergy testing and histology are two big growth drivers
- Fields that are doing well are emerging/novel approaches, hematology and coagulation, infectious disease & blood processing, immunoassays, point-of-care and molecular tests with growth rates exceeding 5%
- Laboratory testing is and will remain the single largest portion of the market with patient self-testing and ambulatory in second and third place
- Overall the growth is coming from the emerging markets with a spectacular 13% CAGR compared with a less exciting 3% and 2% in the US and Japan. Let’s not mention Europe here as to not to depress everybody.
- A concrete example for a growth industry in the emerging markets is hematology. The hematology testing market has grown in the low double digits in the emerging markets while puttering around 2 and 3% in the US and Japan. Again, let’s not mention Europe here.
- Strong growth in the emerging markets is an ongoing trend, 13% will not be sustainable but growth rates are expected to remain healthy after 2017.
- The hot spot is, unsurprisingly, China, the 800 lbs gorilla of the emerging markets. China has a 20% growth year-over-year. Immunoassays grow strongly driven by general strong demand and especially by infectious disease and cancer testing. Even the poorest performer of them all, diabetes testing, is not doing too poorly in China. Likewise clinical chemistry is doing well and derives its growth from ongoing placements and rising utilization.
And now come the challenges:
- Diabetes testing is not doing very well – at all. Several speakers mentioned the declining market size in diabetes testing driven by strong price pressure which even offsets the growth in patient numbers. For once, even the growing emerging markets show lackluster growth in diabetes testing due to reimbursement issues, lack of infrastructure and education. Those factors are expected to improve but not up to their potential and the market is not expected to rebound through the forecasting period.
- Clinical chemistry doesn’t fare much better, the expected compound annual growth is less than 5% amid strong price pressure. One way for developers of clinical chemistry platforms deal with that unimpressive growth is work station consolidation, particularly integrating chemistry and immunoassay (IAs) platforms. IAs command higher prices and see better growth rates than chemistry testing and so integration of platforms tends to off-set the low growth rates in clinical chemistry testing. That new trend does not mean that the pure chemistry platform is dead, but points towards an increasing number of integrated solutions developed by established and emerging players
- Europe turns out to be everybody’s problem child with stagnation is some segments and what is generally referred to as “negative growth” in others. Southern Europe is presents the bleakest picture. One telling snapshot of the problems is that in southern European countries it takes governments and hospitals up to 600 days to pay for the tests they receive from manufacturers – indeed a bad recipe for growth.
- India is also not performing up to expectations or hopes. With a market that could rival China’s in size it faces challenges that keep it from breaking through. Most notably an underdeveloped reimbursement system, pricing challenges and a very fragmented laboratory testing industry.
Overall, there was no reason for wild enthusiasm about the numbers presented but also no reason for despair, clinical testing will always be needed, it is not a fad like the latest mobile application or fashion item which burns hot, bright – and often short - and although a 5% annual growth rate is nothing to write home about in the big scheme of things, in an industry as established as clinical testing it ain’t half bad either.
One thing that became crystal clear, though, is that the time to ignore the emerging markets is over. Whether this means a full-blown push into China or a more careful approach to some of the other emerging markets that didn’t make it to the lime light of the AACC briefing, e.g. Indonesia or Vietnam or yet another approach is a decision each company must make for itself.
For more information about AACC visit www.aacc.org
*With the years 2011 & 2012 serving as the benchmark.
Go To Market Consulting Contact
Tina Baumgartner
email: tina.baumgartner@go2mc.com
tel: +1 408.732.3181
Tina Baumgartner
email: tina.baumgartner@go2mc.com
tel: +1 408.732.3181
