In the world of in vitro diagnostics, there’s nowhere more exciting than Asia.
To put it into context, in the period between 2017 and 2022, the North American IVD market is expected to grow from $31.1B to $36.9B, but the Asian market over the same period is expected to grow from $18.5 to $34.8B.
These incredible projections explain why so many IVD companies are looking to solidify their position in a market which could double in size over the next 5 years.
The reasons for this sky-high growth differ from territory to territory, but broadly speaking there are a few common themes.
1. A rise in point of care testing means that diagnostic technology is now more accessible and cheaper than ever. This means that it can be adopted more quickly in the areas that need it.
2. The diagnostics boom coincides with the dramatic economic growth that is continuing to take place in Asia. An emerging and more health-conscious middle class can and will spend money to use health services and, by association, diagnostic tests.
3. A by-product of the above is that we’re all living longer and nowhere is this more obvious than in Asia. It’s estimated that 13% of the global population is over 60, which means hospitals are seeing more patients and there is a pressing need for fast, efficient tests helps to deal with the influx.
These points are all accompanied by a stronger desire than ever for personalised medicine, meaning that demand for condition-specific tests is at an all-time high. This is coupled with an increase in infectious and easily transmitted diseases throughout Asia. They’re diseases that IVD has more power than ever to diagnose, leading to more effective treatment.
These factors have created an environment that international IVD businesses are keen to take advantage of.
China – The Heart of Growth in Asia
The middle classes of China and India have seen huge growth. Companies have therefore placed these two countries at the top of their list of priorities. Let’s take a look at the Chinese IVD market in more detail.
Top 10 global business Ortho Clinical Diagnostics have identified China as their ‘number 1 growth country’ with revenue growth there set to outpace their global average by 5 to 1.
Siemens Healthineers are one of many organisations to take advantage of the Chinese IVD market as they announced recently that they are setting up a new laboratory diagnostic plant in Shanghai. Following a $433M investment, the plant will be become the 'companies first IVD diagnostic reagent plant in Asia Pacific'.
As in many industries, the Chinese market has a range of domestic players who have a big presence in the country, some of whom have ties with international companies and others who don’t. Here’s a list of some of the bigger names, courtesy of this great article from Jin Zhang:
Ortho’s CEO Martin Madaus estimates the Chinese market to be as important as their core US market within approximately 5 years and they’re also taking steps like establishing manufacturing facilities on the mainland.
Barriers to Entry
Global giant Roche have had a presence in Asia for over 40 years, and they strengthened their presence with a new multi-million dollar HQ and centre of excellence in Singapore in 2015.
But for other companies who don’t have an existing presence in the area accessibility can be a major challenge. Problems like uncertainty around government regulations can be a stumbling block for large international companies and even companies based in Asia. The diversity in markets can be significant for a comparatively small distance between individual territories.
Even if you can negotiate the hurdles to entry, there is still the issue of penetrating the small and mid-sized hospitals and labs that are both difficult to access and price conscious.
There are typically a couple of options available to companies looking to do this.
The first: hire great people with local knowledge and contacts. Then utilise these people to gain access. However, it’s not always that easy and even if it is, you still need infrastructure to get your product(s) out there.
That’s why companies of all sizes are turning to the second option, distributors. In-country distributors and partners have ready-made networks available which can be a shortcut to making strides into new markets.
Singapore-based Lucence Diagnostics have recently announced a partnership with Myanmar based healthcare service provider Mascots. They’re bringing Lucence’s non-invasive liquid biopsy technology to a country with the third and fifth highest death rates from cancer in South East Asia from men and women respectively.
The list goes on when it comes to even more companies placing Asia at the centre of their growth strategies. As well as those I just covered, the likes of lllumina, and Vela Diagnostics have announced their intent to take advantage of the Asian market after gaining Chinese regulatory approval for some of their products.
Making a Difference
When it comes to IVD in Asia, It’s important not to just focus on the financial benefits.
The increased sophistication of IVD is also having a significant humanitarian impact on traditionally underdeveloped countries and economies.
It’s estimated that two thirds of medical decisions rely on diagnostic information. However, the spend on acquiring that information only accounts for around 1% of the total medical expense. The continued boom in IVD means more investment which means more technological advances and better decision making tools for physicians.
This leads to an increase of early diagnosis and treatment of prevalent infectious diseases, cancers and other major killers in the region.
So there’s a variety of reasons that the future is bright for IVD in Asia.
In part two of this discussion, Dennis and I discuss the key barriers for entry for companies expanding into new territories and how to overcome these, whether you're a start-up or established company entering a new market. Click to listen.
Predicine With a background in research, pharma and commercial, Dennis gives insight into the true value of liquid biopsy. Click to listen.
This is the first in a new CM Life Science series discussing trends and insights into the diagnostics market. Here I'm joined by Delphine, to discuss European market expansion strategies within the diagnostics space. Click to listen.
In this episode of CM Conversations, our guest share his tips on hitting the ground running and building a team remotely, as well as the importance of investing in relationships. In his words, you should always be visible and available.