Study evaluated the Western European market for in vitro diagnostic manufacturers
Are clinical laboratories in the United States and other developed nations around the world capable of meeting the expected surge of medical laboratory testing that is expected to come as large numbers of people age into their 60s and 70s? That is a question which has yet to be answered with much confidence by leading healthcare experts.
Recently a respected research firm offered its best guess at what lab specimen growth rates may be and its predictions may surprise many pathologists and clinical laboratory managers. At the same time, the right answer to this important question is critical for lab administrators when planning strategy.
It Takes Years to Expand Capacity of a Clinical Pathology Laboratory
That is because it typically requires years to expand the capacity of a medical laboratory organization. Then there is the challenge of hiring additional pathologists, Ph.D.s, and laboratory scientists at a time when many developed countries already report an acute shortage of trained medical laboratory professionals.
Thus, understanding the expected rate of growth in clinical laboratory specimens is an important element when a laboratory’s executive team develops its clinical and business strategy. Annual growth rates do matter. Were the number of lab test specimens to increase at the rate of 15% per year, for example, it would take just five years to double the number of clinical lab specimens flowing into a nation’s medical laboratories!
This is why there should be interest in the predictions of a report on the Western European In Vitro Diagnostics (IVD) Market that was issued this spring by Frost & Sullivan of London, England. It contains an estimate of the rate of growth in IVD test volumes that appears to be the result of credible research.
This report provides an overview of the larger segments that make up medical laboratory testing. These segments include immunochemistry, hematology, hemostasis, microbiology, molecular diagnostics testing (POCT), and self-monitoring of blood glucose (SMBG).
Estimates of Revenue from In Vitro Diagnostics Sales in Europe
Diagnostics (IVD) Market, the research study authors say that IVD manufacturers generated revenue of US$13.1 billion during 2011. This would represent the sale of instruments, consumables, and reagents to clinical pathology laboratory customers (and is thus not the total amount reimbursed by payers for lab testing performed on behalf of patients).
Are clinical laboratories in the United States and other developed nations around the world capable of meeting the expected surge of medical laboratory testing that is expected to come as large numbers of people age into their 60s and 70s? That is a question which has yet to be answered with much confidence by leading healthcare experts.
From this baseline number, Frost & Sullivan predicts that, by 2018, revenue in the Western European IVD market will grow to US$22.2 billion. That is an increase of 69.5% in sales in only 84 months.
This number probably reflects the researchers’ estimates of both the increase in specimen volume and a factor for price increases. On the other hand, given the extensive cost-cutting that governments in Europe are initiating to control the cost of healthcare, it is reasonable to assume that majority of the 69.5% growth number is made up of increased volumes of lab test specimens, due to higher utilization required to provide healthcare to the aging populations in Europe.
For subscribers and readers of Dark Daily, the growth estimates of these researchers can provide a useful “guestimate” of the year-over-year increase in the volume of lab test specimens that originate in Western Europe. Over the coming seven years, Frost & Sullivan is predicting an average annual increase of 7.8% in order to reach its 69.5% overall growth during that time period.
This average annual growth rate of 7.8% can be compared to an earlier estimate. At the 2010 meeting of the American Association of Clinical Chemistry (AACC), consultants at Boston Biomedical Consultants, Inc. (BBC) issued a report titled “Worldwide In Vitro Diagnostics Tests, Products, Industry Update and Review. The BBC analysts estimated that the worldwide IVD market would grow at a compound annual growth rate (CAGR) of 5% between the years 2011 through 2014.
It should be noted that this number includes all nations across the globe, not just in Western Europe. However, BBC’s 5% average annual growth rate affirms that Frost & Sullivan’s 7.8% rate is “in the ballpark.”
Coincidentally, in February of this year, MarketResearch.com issued its own IVD industry report, titled: In-Vitro Diagnostic Market: Trends & Global Forecasts. Analysts at this firm estimated that the global IVD market would “grow at a CAGR of 7.8% from 2011 to 2016.”
Labs Should Project Healthy Annual Growth in Specimen Volume
Collectively, these three research firms are projecting a healthy annual growth rate in the volume of medical laboratory test specimens, approaching 8% per year over each of the next five to seven years. At a minimum, this is fair warning to clinical laboratories and pathology groups that their strategic planning should factor in the need for their laboratory organizations to be capable of handling 50% to 100% more specimens per year by 2018 than what they handled in 2011.
Frost & Sullivan explains that this increased utilization of medical laboratory testing will come from several primary market drivers. First and second, “an increasingly aging population and the rising prevalence of diseases are set to boost the number of routine health checks and disease diagnoses,” wrote Frost & Sullivan’s Senior Research Analyst K. Srinivas Sashidhar. His third driver will be “improved awareness among this aging demographic pool… [will] enhance the demand for screening and diagnosis in the future.”
Of course, along with expansion of existing lab facilities to handle this increased demand, there will be the need for medical laboratory organizations to also hire more pathologists, clinical chemists, and trained laboratory scientists. Both of these goals will be doubly challenging to achieve because lab testing budgets are expected to decline during these same years.
Related Information:
Western European In Vitro Diagnostics (IVD) Market: Driven by Adoption of Automation in Laboratories
IVD Market Set For Continued Growth; October 2010
Market Research Estimates In-Vitro Diagnostic (IVD) Market at $44 Billion
