Strategic Analysis of the Asian In Vitro Diagnostics Market

Ageing Population and Widening Health Insurance Expand Asian In Vitro Diagnostics Market 

London, UK, and Chennai, India - 6th December, 2004

 The USD 3.2 billion Asian in vitro diagnostics (IVD) market has, over the past few years, been the only region experiencing close to a double-digit growth rate. While an ageing population and widening health insurance penetration are advancing growth opportunities in this high potential market, divergent country-specific social, economic, political and healthcare issues threaten to impede overall market development. 

Asia's ageing population is expected to double by 2025, increasing the number of people likely to require medical treatment. Rising average life expectancies coupled with more affluent populations are expected to boost expenditure on healthcare treatments, including IVD. For instance, Japan - with the world's third largest aged population - currently accounts for 90 per cent of IVD market revenues in Asia. 

In other countries, governments are being confronted with the dilemma of reducing healthcare outlays even while expanding healthcare coverage to all. Here, the growing realisation of their tremendous financial and therapeutic benefits is furthering the popularity of IVD tests. From being under-utilised and undervalued, IVD tests are now increasingly being regarded as key to improving overall cost efficiency and patient outcomes. 

Currently, lack of proper health insurance in most countries coupled with constrained personal finances has resulted in low levels of consumer spending. In the absence of a strong medical insurance sector, most of the health care expenditure is borne by the individuals themselves. It is estimated that 82 per cent and 63 per cent of total health care spending in India and China, respectively, is "out-of-pocket." 

"In China and India - identified as amongst the most high growth country markets for IVD - no coverage of health care expenditures exists and hence, IVD expenditure is limited," notes Frost & Sullivan Healthcare Analyst Raghavendra Chitta. "This is expected to slowly change with private insurance companies increasing their penetration and introducing some kind of healthcare coverage." 

By allowing patients to take a more proactive role in managing their own health, IVD tests offer a cost-effective alternative. Patients are more likely to receive the suitable treatment and avoid unnecessary and expensive medical procedures, if IVD testing is used. However, further education of key stakeholders is critical if uptake levels are to be maximised. 

In 2003, the three largest revenue contributing segments to the total IVD market in Asia were clinical chemistry (38 per cent) and immunoassay (29 per cent) followed by haematology and microbiology. The fastest growth was, however, recorded by the molecular biology segment followed by coagulation and point of care (POC). 

Increased adoption of NAT-based infectious diseases and viral assays (molecular diagnostics), blood glucose testing (point of care), cardiac markers and glucose (clinical chemistry), coagulation self-monitoring and bacteriology culture (microbiology) is set to support a compound annual growth rate of almost 9.0 per cent for the overall IVD market between 2003 and 2010. 

A prominent trend has been that of cancer overtaking infectious diseases as the leading killer in Asia. This has increased the potential for premium priced tests for cancer detection. Although the region has traditionally been more of a follower rather than leader in developing and adapting to newer tests, novel, premium priced assays are poised to replace more conventional testing options. 

At present, a large number of local companies account for 57 per cent of the market. The top three companies include Roche, Sysmex and Beckman Coulter. While local reagent companies are distinguished by their ability to manufacture reagents at very low costs, participants with a broad range of products, commercial tools, reagents and good customer care are set to make strong market gains. 

Key competitive factors include cost per test, customer support, ease of use, faster turnaround time and quality, reliability and flexibility of tests. Competitive success will also hinge on how companies can manage logistics in the vast Asian continent while tackling the multiple disparities not just between countries but within countries as well. 

"Due to substantial costs in distributing and catering to vast geographical areas, especially in India and China, it is imperative to establish relationships with reputed dealers rather than operating alone," advises Mr. Chitta. "Focusing on particular geographies one at a time, thereby enabling easier logistics management, forming alliances with different regional distributors rather than a single distributor nationwide and training local distributors on product and service issues would be vital to continued growth." 

If you are interested in an analysis overview providing an introduction into the Strategic Analysis of the Asian In Vitro Diagnostics Market - then send an email to Radhika Menon Theodore - Corporate Communications at rmtheodore@frost.com with the following information: Full name, Company Name, Title, Contact Tel Number, Email. Upon receipt of the above information, an overview will be emailed to you. 

Title: Strategic Analysis of the Asian In Vitro Diagnostics Market 
(F120-55)