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In-Vitro Diagnostics: Products & Markets

This article is a continuation of a multi-part series, covering the overall market, M&A trends, risks and opportunities in in-vitro diagnostics investment banking, a significant segment for institutional medical and healthcare investing

The In Vitro Diagnostics (IVD) market is the largest segment of the Medical Technology industry. In vitro diagnostic products use specimens from patients to detect diseases. They have grown in popularity and application in recent years because they are considered less invasive and less expensive than traditional diagnostic tests. This article will discuss major products, market demand drivers, regions, and end-users.

Major Products

The IVD product market is segmented into instruments, reagents, services, and data management software. Instruments make up the largest segment because of their advanced technology and high price point. However, the fastest growing product segment is the reagents category, which is expected to grow at a CAGR of 6.4%.[1]

IVD testing has a variety of common applications including glucose testing, blood testing, infectious disease testing, and pregnancy testing to name a few. Research for epidemics, viruses (AIDS/HIV and Cancer), diabetes, and many other diseases all use in vitro diagnostics as well.

Demand Determinants

Three major factors have been driving global demand for IVD products.

  1. Aging Population: The Global Health and Aging report presented by the World Health Organization (WHO) said, “The number of people aged 65 or older is projected to grow from an estimated 524 million in 2010 to nearly 1.5 billion in 2050.”[2] The Office of Disease Prevention and Health Promotion projected that by 2030, more than 60% of the “baby boomer” generation will be managing at least one chronic illness or condition.[3] As the world’ population ages, there will be greater pressure on the healthcare system for inexpensive and accurate diagnostics.

 

  1. Growth in Chronic and Infectious Disease: Chronic and infectious diseases have seen rapid rates of growth in recent years, and that growth is expected to continue. The number of cancer cases is expected to rise from 17 million in 2020 to 27 million by 2030.[4] The AHA recently reported that the number of Americans with diabetes is projected to increase from 30 million in 2016 to 46 million by 2030.[5] HIV/AIDS, obesity, Alzheimer’s and dementia, among others, will experience accelerated incidence rates in the next 10 years. In addition, there is a substantial rise in the number of patients suffering from infectious diseases such as gastrointestinal, respiratory, and sexually transmitted diseases (STDs).[6] This will drive demand for cheaper and more accessible diagnostic tests.

 

  1. Technological Advancements: In the past, functions performed by in-vitro diagnostics used to be exclusively performed in labs or clinics. As technology has developed, these functions have been made accessible in smaller, easier, cheaper and more portable versions, such as take-home pregnancy tests or blood glucose testing devices. This development has driven demand and use of IVD products.

 

Major Markets

Region

North America dominates the IVD market with nearly 42% market revenue at $31.1B mostly due to the huge healthcare market and expenditure in the USA, advanced technology, established government and private health infrastructure and agencies.[7] Europe, Middle East, and Africa (EMEA) accounted for 35% of the 2017 market. The Asia-Pacific market is expected to be the fastest growing region in the world with an anticipated CAGR of 13.5% to $34.8B in 2022.[8]

End User

The end-user of IVD devices include laboratories, academics, hospitals, and patient self-testing. There has been a marked evolution of the end user in the IVD market from hospitals and laboratories to patient self-testing as technology has created simpler, portable, and cheaper IVD products that can be used at home and by non-medical professionals. Despite this, the largest end user group continues to be private and hospital laboratories that use complex, high priced diagnostic tests not available to commercial clinics.[9]

Sources

[1] In Vitro Diagnostics (IVD) Market Outlook To 2024: In-Depth Market View, Key Product & Service Categories (Reagents & Kits, CT, Instruments, Softwares, Services), Application (Diabetes, Infectious Diseases, Oncology, Cardiology, Nephrology, HIV/Ads, Autoimmune Diseases, Drug Testing/Pharmacogenomics), Regional Segmentation, Top Players & Company Share, Competitive Dynamics, Growth Drivers & Restraints, M&A Insights, Segment Forecast And Key Conclusion, Ameri Research Inc. (2017), https://www.ameriresearch.com/product/vitro-diagnostics-ivd-market-outlook-2024-depth-market-view-key-product-service-categories-reagents-kits-ct-instruments-softwares-services-application-diabetes-infectious-dis/ (last visited Jan 12, 2018).

[2] The Aging Population: The Increasing Effects on Health Care, Pharmacy Times (2016), http://www.pharmacytimes.com/publications/issue/2016/january2016/the-aging-population-the-increasing-effects-on-health-care (last visited Jan 8, 2018).

[3] The Aging Population: The Increasing Effects on Health Care, Pharmacy Times (2016), http://www.pharmacytimes.com/publications/issue/2016/january2016/the-aging-population-the-increasing-effects-on-health-care (last visited Jan 8, 2018).

[4] The Aging Population: The Increasing Effects on Health Care, Pharmacy Times (2016), http://www.pharmacytimes.com/publications/issue/2016/january2016/the-aging-population-the-increasing-effects-on-health-care (last visited Jan 8, 2018).

[5] The Aging Population: The Increasing Effects on Health Care, Pharmacy Times (2016), http://www.pharmacytimes.com/publications/issue/2016/january2016/the-aging-population-the-increasing-effects-on-health-care (last visited Jan 8, 2018).

[6] Abha Thakur, IVD Market by Product Type (Reagents, Instruments and Software & Services), by Technique (Immunodiagnostics, Blood Testing, Molecular Diagnostics, Tissue Diagnostics, Clinical Chemistry, and Other IVD Techniques), by Application (Infectious Diseases, Cancer, Cardiac Diseases, Immune System Disorders, Nephrological Diseases, Gastrointestinal Diseases, and Other Indications), and by End Users (Standalone Laboratory, Hospitals, Academic and Medical Schools, Point of Care Testing, and Others) – Global Opportunity Analysis and Industry Forecast, 2017-2023 Allied Market Research, https://www.alliedmarketresearch.com/ivd-in-vitro-diagnostics-market (last visited Dec 18, 2017).

[7] Reportlinker, The global in vitro diagnostics (IVD) market should reach $102.4 billion by 2022 from $74.1 billion in 2017 at a compound annual growth rate (CAGR) of 6.7%, from 2017 to 2022 PR Newswire: news distribution, targeting and monitoring (2017), https://www.prnewswire.com/news-releases/the-global-in-vitro-diagnostics-ivd-market-should-reach-1024-billion-by-2022-from-741-billion-in-2017-at-a-compound-annual-growth-rate-cagr-of-67-from-2017-to-2022-300575320.html (last visited Jan 13, 2018).

[8] Reportlinker, The global in vitro diagnostics (IVD) market should reach $102.4 billion by 2022 from $74.1 billion in 2017 at a compound annual growth rate (CAGR) of 6.7%, from 2017 to 2022 PR Newswire: news distribution, targeting and monitoring (2017), https://www.prnewswire.com/news-releases/the-global-in-vitro-diagnostics-ivd-market-should-reach-1024-billion-by-2022-from-741-billion-in-2017-at-a-compound-annual-growth-rate-cagr-of-67-from-2017-to-2022-300575320.html (last visited Jan 13, 2018).

[9] Abha Thakur, IVD Market by Product Type (Reagents, Instruments and Software & Services), by Technique (Immunodiagnostics, Blood Testing, Molecular Diagnostics, Tissue Diagnostics, Clinical Chemistry, and Other IVD Techniques), by Application (Infectious Diseases, Cancer, Cardiac Diseases, Immune System Disorders, Nephrological Diseases, Gastrointestinal Diseases, and Other Indications), and by End Users (Standalone Laboratory, Hospitals, Academic and Medical Schools, Point of Care Testing, and Others) – Global Opportunity Analysis and Industry Forecast, 2017-2023 Allied Market Research, https://www.alliedmarketresearch.com/ivd-in-vitro-diagnostics-market (last visited Dec 18, 2017).

William Montgomery contributed to this report.

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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.