The Effect Of Covid-19 And The Current Challenges In In-Vitro Diagnostics (IVD) Market

 What are in vitro diagnostics (IVD)?  

The FDA defines IVD as the reagents, instruments, and systems intended for use in diagnosis of disease or other conditions, including a determination of the state of health, in order to cure, mitigate, treat, or prevent disease or its sequelae. These tests can be done in healthcare facilities, laboratories, and at home as well and the devices can range from tests can be small, handheld tests to complex laboratory instruments. 


The in-vitro diagnostics (IVD) market covers a huge spectrum of indications and is a key element of modern-day healthcare. While a number of mature products are still serving as relevant, new technologies such as point of care testing and genetic testing are resulting in its evolution. Abbott, Danaher, Siemens Healthineers, and Roche are among the leaders in the IVD market.


According to GlobalData Research, the overall market value of IVD in the year 2021 was US$95.3 billion and it is projected to grow at a Compound Annual Growth Rate (CAGR) of 4.6% during 2022-2027.  

 

woman in white long sleeve shirt holding silver and black metal tool 

 

 

The Effect of COVID-19


The COVID-19 pandemic had a combination of positive and negative impacts on the IVD market. The positive impact includes increased growth in segments such as molecular diagnostics and immunoassays owing to rising diagnostic testing for COVID-19 and other infectious diseases. Molecular diagnostic assays are regarded as the gold standard during the pandemic for identifying active COVID-19 infections. Regular routine tests took a toll due to various reasons such as restrictions related to hours of functioning, complete lockdowns, and fear among the public to step into healthcare settings.


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Due to COVID-19, healthcare companies had to shift focus to infrastructure needs for better diagnostic testing across the world. The widened need for faster results at low costs led to increased development patient-centred, point-of-care (POC) testing. This resulted in the introduction of several molecular and immunoassay testing devices, such as ID NOW COVID-19 by Abbott and BD Verito by Becton, Dickinson, & Co. 


According to GlobalData, In Europe and the U.S., the demand for molecular-diagnostic tests grew 20-fold between March and October 2020. 


The IVD manufactures have mostly focused on developing new instruments and platforms for detection of the COVID-19 antigen whereas other IVD products such as reagents and consumables saw reduced sales. For example, reduced anaemia screening led to 36% decline in the haematology product from EKF Diagnostics. The company sold 11,167 analysers in 2020 compared to 14,167 in 2019. 


To avoid the COVID cliff, the IVD market saw strategic M&A activity among market leaders. Some examples are Roche - GenMark Diagnostics merger to access GenMark’s molecular diagnostic panel tests that allow multiplex testing, Hologic’s acquisition of Mobidiag to enter the acute care test market, and DiaSorin’s agreement to buy Luminex to boost its core molecular business. 


Complex Regulations on Medical Devices and the Changing European Regulatory Landscape Impact the Market 


Manufactures of in-vitro diagnostics are required to meet different regulatory requirements. For example, in the UK, the market is regulated by MHRA under Medical Devices Regulations (UK MDR) 2002 act as well as In-Vitro Diagnostic Regulation (IVDR) (EU) 2017/746 in the European Union. Whereas, in the US, in-vitro diagnostics products are defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) as well as categorised under the Clinical Laboratory Improvement Amendments (CLIA) of 1988. 


The landscape of in-vitro diagnostics in the EU is highly regulated. In 2017, the IVD Regulation made major changes in the regulatory framework and then EU published two new sets of regulations (Regulation (EU) 2017/745 for medical devices and Regulation (EU) 2017/746 for in-vitro diagnostic medical devices). In 2021, the EU made further changes for in-vitro diagnostics manufacturers with inclusions on stringent control policies for high-risk devices. The new in-vitro diagnostics regulations which were implemented on 26 May 2022 is expected to change the regulatory landscape of in-vitro diagnostics in the EU, creating disruption in the supply chain as well as longer approval times.


Competitive Pricing and Complicated Reimbursement Pathways are a Barrier to Growth 


There is limited growth in certain regional markets despite increasing numbers of testing due to competitive pricing. Effective use of IVDs requires, investment in the instrument, consumables, test kits, software solutions, and qualified and skilled personnel. Hence, profitability is greatly dependent on reimbursement tariffs. In cost-based reimbursement, test reports are provided as a service and the tariff depends on how much the laboratory must invest to provide the requested result. Whereas, in nonbrand specific reimbursement, the reimbursement code only includes a general description of the biomarker or underlying technology. The reimbursement rate is the same irrespective of what brand test-kit is chosen by the provider. 


Overall, IVD market is set to show good growth, predominantly driven by rising prevalence of infectious and lifestyle diseases, improved awareness coupled with spending as well as continuous technological advancement.  

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