Santa Clara, Calif. – June 12, 2017 – The United States (U.S.) in vitro diagnostics (IVD) market is extremely dynamic with robust merger and acquisition (M&A) activity. Clinical laboratories and manufacturers are vying for smaller, specialized, niche technology companies to increase their market share. On the downside, companies should prepare for delayed Food and Drug Administration’s pathways for companion diagnostics, potential changes to laboratory-developed test (LDT) regulation, and price erosion due to the Protecting Access to Medicare Act (PAMA). In addition, the National Institutes of Health budget cuts imposed by the White House can have a detrimental effect on the purchasing ability of research labs.

“The new government aims to provide a retail-like experience for healthcare services; this will boost innovation and help clinically vetted, direct-to-consumer diagnostic testing services thrive,” noted Transformational Health Industry Principal Divyaa Ravishankar. “Molecular point-of-care testing (POCT) and liquid biopsy will attract investment from private equity and venture capitalists. Besides, partnerships with non-healthcare companies will empower core diagnostic companies with artificial intelligence and big data capabilities.”

Growth Opportunities in the US In Vitro Diagnostics (IVD) Market, Forecast to 2021, new research from Frost & Sullivan’s Life Sciences Growth Partnership Service program, discusses growth opportunities, game-changing companies, disruptive technologies, new business models, strategic recommendations, M&A, and the impact of PAMA on the US IVD market. The analysis covers nine segments: POCT, tissue diagnostics, self-monitoring blood glucose meter (SMBG), hemostasis, hematology, clinical chemistry, microbiology, immunochemistry, and molecular diagnostics.

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The U.S. IVD market is expected to reach $29.0 billion by 2021, attracting partnership interest from outside the IVD realm. The shift to data-driven healthcare along with the consolidation in the laboratory industry also encourages investment in unifying technologies and interoperability.

Major trends fueling development in the IVD market include:

  • Immense pressure on companies to build new competencies in product development, manufacturing and distribution to capture growth opportunities in the precision medicine market;
  • Use of cognitive machine learning capabilities and big data to complement diagnostic test information;
  • Focus on screening, therapy selection and monitoring that is driving IVD companies to include liquid biopsy and companion diagnostics in their product portfolio; and
  • Wide opportunities for middle ware vendors and lab-on-chip microfluidic vendors to offer low-cost and multiplexed solutions in molecular POCT and integrated POCT.

However, the PAMA and LDT regulations will create fluctuations in the pricing of IVD tests. Downward pricing on cost per test due to PAMA will put pressure on vendors to innovate manufacturing practices to lower the cost per run. Moreover, the delay in LDT regulation deployment will further compel companies to think ahead on how their tests can meet with higher standards for clearance and approval.

“Given that company-owned test services are one of the primary business models in the U.S. for LDT providers, such manufacturer’s service providers – over 11,000 laboratories – will need to be prepared in advance for the market climate change,” explained Ravishankar.

Currently, Roche Diagnostics leads the U.S. IVD market, followed by DanaherAbbott, and Siemens Healthineers. Key innovative companies covered in this analysis include Pathway GenomicsPrognos, and Celmatrix which are using big data and cognitive machine learning; Grail, a spinoff from Illumina, which competes in the area of low-cost liquid biopsy, and Admera Health, with its PGxOne™ Plus pharmacogenomics test that can screen over 300 commercial drugs, 200 genetic variants and 50 genes.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today’s market participants. For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community.

Growth Opportunities in the US In Vitro Diagnostics (IVD) Market, Forecast to 2021

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About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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