In vitro diagnostics
In vitro diagnostics (IVDs) are non-invasive tests performed on biological samples (blood, urine or tissues) to diagnose or exclude a disease. They are used for diagnosis, prognosis, risk stratification, screening and therapeutic monitoring of diseases. IVDs have a broad scope ranging from sophisticated
technologies performed in clinical laboratories to simple self-tests, such as those for pregnancy and glucose monitoring.
European in vitro diagnostics market
Four out of the five largest European IVD markets (Germany being the exception), are showing slight growth in 2017 and overall revenues across EU-28 plus EFTA reached €10,768 million, only increasing +0.1% However, this remains below the revenues recorded in 2011 (€10,943), and, if changes in the value of non-Euro currencies, especially the depreciation of sterling, are taken into account the overall change in the Euro value of the European IVD market from 2016 to 2017 is negligible (-0.4%).
EU5 in vitro diagnostics market trends
- While the IVD revenues in Germany decreased overall (-2.2%), market growth was seen in both microbiology (+4.5%), and infectious immunology reagents (+2%).
- From the largest five markets, the UK has experienced the highest increase of +2%, largely due to increase in the glucose test strip market, but also reflecting depreciation of the pound sterling.
- In Italy the IVD market increased slightly (+0,4%), with decreased revenues in both clinical glucose tests, (-2.1%) and infectious immunology, (-1.7%).
- After decreasing for three consecutive years (2012-2014), and stagnation in 2015, the French IVD market registered a growth of +1.1%.
- In Spain, the IVD market remained flat with growth of +0.2%. The changes in revenues do not necessarily reflect changes in test volumes, and there is evidence in many countries that volumes have increased significantly without increased revenues.
EU5 in vitro diagnostics market by country
Although there are variations in healthcare systems, reimbursement policies, etc. from country to country, healthcare cost containment is a constant across the EU5 countries. Besides budget restrictions, greater centralization both in the public and private laboratory sectors has increased the power of purchasing organizations.
The German IVD market declined about -2.2% in 2017, due to distinctive decline of sales. However, the market development differed strongly between the various segments. Laboratory diagnostics (reagents and instruments) continue to increase similarly to the previous years (+1.5%).
A major decline can be found for the rapid market where the negative market trend of 2016 continues. While the sales decreased by -2.5% in 2016, the market segment declined even more in 2017 (-8.5%). A large portion of this development continues to be caused by the glucose self-testing market. The market segment decreased by -11.2% in 2017. This is a larger decline compared with 2016 (-1.2%).
Several reasons are responsible for this development:
- The restrictive legal framework that forces medical doctors to prescribe generic, low-priced test strips to not overstep their respective budget remains in place.
- The shift to new sensor-based technologies for the measurement of glucose continues in Germany. As long as flash glucose monitoring / continuous glucose monitoring is not included in the glucose IVD (GIVD) classification and due to the current market situation with only a very few number of competitors, the positive development of these technologies cannot be reproduced exactly.
- The regulatory environment in Germany remains strict. The floating quota percentage for laboratory service fees remains in place and unchanged in 2017. Consequently, price pressure does stay strong in the German IVD market.
- However, despite this various market segments continue to thrive. The sales numbers for the market segment ’Microbiology Reagents’ increased by +4.5%, for Infectious Immunology Reagents by 2.0% and for Immunochemistry Reagents by 1.6%.
The Central Laboratory IVD French market is estimated at €1.440 billion, with a non-significant growth of +1% compared to 2016. The Central Laboratory IVD French market has been flat since 2014 with continuous non-significant growth (+0.5% in 2016 vs 2015, +0.1% in 2015 vs 2014), after three years of slight but steady decrease (-0.4% in 2014 and -0.3% in both 2013 and 2012).
In 2017, the IVD market in Italy (1,613 million euro) increased by 0.4% compared to 2016. The healthcare public expenditure amount has been confirmed but its weight on GDP has decreased to 6.7%, putting at risk the sustainability and quality of the Italian universalistic welfare state.
Looking at public procurement, the centralization process is occurring with regional and national bodies managing more than 70% of public purchasing. This trend is creating big issues across the Italian NHS due to the increase of tender size (product range, geographical area, fiscal criteria, etc.) which is reducing competition in the market and to the organizational and functional diversity among regional contract authorities, increasing variability uncertainty for the industries.
Within this framework, the medical device market is quite stable at 11 billion euro, 70% of which is public spending for goods and services. Considering only medical devices, Italian expenditure is equal to €5.8 billion, structurally over the 4.4% cap defined at national level and linked to a “payback mechanism” which is creating strong tension and uncertainty across the system.
Focusing on the 2017 IVD market, it is quite stable at approximately €1.600 billion with a small increase of 0.4% compared to 2016. Negative results can be highlighted for glucose testing (-2,1%) and infectious immunology (-1,7%).
In 2017, the IVD market in Spain (987 million euro) increased by 0.2% compared to 2016.
The market remains flat with no clear trends. Mature test market declines due to price reductions and new test incorporation are not enough to create a recognizable trend. Consolidation of laboratories is a trend but there is not too much room for consolidation.
Most laboratories already consolidated are looking for economies of scale and homogenization of the region’s procedures and technologies. Customers are looking for new approaches to contracts based on risk sharing or value-based considerations.
Cost increases for automation are considered in a context of a price driven market, especially in core labs. The introduction of innovative technologies or new tests is very slow due to a very heterogeneous market with 17 autonomous regions, each with different technology incorporation processes and purchase approaches.
Continuous monitoring of Glucose is beginning to be reimbursed in some regions subject to individual approval. Other glucose test strip sales suffer a commoditization approach There has been a disappointing evolution of point-of-care (POC) which is lacking a clear model of reimbursement.
In 2017, the IVD market in UK (936 million euro) increased by 2.0% compared to 2016.
Within ‘Brexit’ context, the state of the National Health Service in the United Kingdom has not improved, and forecasts continue to point to a major shortfall in funding in coming years.
Seasonal flu contributed to the worst winter for a decade in terms of pressures on emergency departments and intensive-care units (ICUs), and the availability of rapid point-of-care tests to help diagnose and manage patients in terms of isolation requirements and treatment was seized upon by a number of hospitals, resulting in rapid adoption of both specific POC tests for ‘flu and multiple test systems (adopting a syndromic testing approach, whereby infective agents are identified rather than screened negative or positive for a specific agent).
The recognition of the value of IVDs as tools for patient and bed management is a positive step forward for the industry, as test costs are easily offset by savings in overall health care costs, even to the point of enabling services to be kept open.
Note: Read about European pharmaceutical industry, recent trends and statistics.