2017 Global IVD Market: $60 billion
2017 Molecular Dx Market: $7 Billion
The global molecular diagnostics market size was $7 billion in 2015. It is expected to reach $12.5 billion growth by 2024. (Grandview Research 2016) The molecular diagnostics segment remains the fastest growing category within the in vitro diagnostics industry, driven by technology advancements, growth in point-of-care solutions, and personalized medicine initiatives.
IVD Industry Drivers and Restraints
- The aging of the population has been an industry driver for decades.
Standard of Care
- Increasing incidence/prevalence of chronic diseases including heart disease, cancer and diabetes.
- Evidence-based medicine drives policy, care pathways and reimbursement.
- Patient-Centered Medical Home is a dominant practice model to coordinate care and reduce costs.
Regulatory and Payment Changes
- Regulatory changes are emerging to cope with technology advances (next generation sequencing, multiplex assays) and new business models (Laboratory Developed Tests, direct-to-consumer).
- Reimbursement rates continue to decrease. Market-based pricing became effective January 1, 2018. Mandated by the Preserving Access to Medicare Act (PAMA), it has caused uncertainty across the diagnostics industry.
Health System Structure
- Decisions on product and technology adoption are cost-driven. Economic buyers demand evidence of cost-savings or cost-avoidance in addition to health outcomes data.
- Decision-making is becoming increasingly more centralized and complex. Committees associated with Integrated Delivery Networks (IDNs) and Accountable Care Organizations (ACOs) are the new buyers.
- Promotion programs must target health system executives and physicians, not just laboratory personnel.
- IVD manufactures must be more active in providing patient engagement and patient education.
Advances in Molecular Diagnostics
- Multiplex genomic and proteomic assays offer more complete information and better performance characteristics than historical single analyte tests.
- Next Gen Sequencing has reduced costs of genomic testing and offers the potential for game-changing insights in oncology, infectious disease and beyond.
- Big Data techniques and health information technology are enabling sophisticated decision support tools.
Business Models for Molecular Diagnostics
Bringing it all together
- Cost is the major driver for new product and technology adoption. IVD manufacturers must provide evidence of cost-savings or cost-avoidance in addition to health outcomes data.
- Physician engagement and patient education must become part of the marketing mix.
- Multiplex advanced diagnostics offer improved performance over traditional assays. Actionable insights inform treatment decisions and offers hope for better health outcomes at lower cost.
- The LDT business model enables a faster path to commercializing innovative assays.