Molecular diagnostics market shows fast growth

11 January 2006. Based on its exceptional ability to accurately detect the primary cause of disease, molecular diagnostics has emerged as the fastest growing segment of the in vitro diagnostics (IVD) industry. As automation of the technology improves, high throughput processing becomes widespread, and a spate of novel solutions emerges, molecular diagnostics assays are set to account for an even larger portion of the IVD market.

"Early disease detection prevention is the main emphasis of molecular diagnostics," says Frost & Sullivan (http://healthcare.frost.com) Healthcare Analyst Dr. Fiona Rahman. "Successful campaigns encouraging populations to be screened for diseases have slowed the rate of incidence of new cases, improved patient care, and offered people earlier therapeutic options."

"The way ahead involves consistent screening to greatly reduce negative outcomes resulting from undiagnosed conditions," Dr. Rahman adds. "In addition, while screening for inheritable diseases is more complex, nevertheless, predisposition testing can inform a patient of hereditary risks and make screening for early detection a higher priority."

In addition to earlier detection, novel molecular diagnostics technologies promise reduced costs through minimising labour deployments and lowering the use of reagent volumes. They also hold out the prospect of consolidating test and testing platforms. Other perceived benefits include faster turn around times as well as convenience and portability (miniaturisation can increase the ability to perform point-of-care tests). Significantly, proprietary tests associated with new technologies offer tremendous scope for profitability.

However, even as molecular diagnostics gains in popularity, obstacles still exist in terms of commercialisation, approval, reimbursement, competition, upgrading existing lab technology, and justifying higher prices.

For instance, novel molecular diagnostic assays need to be approved through a process of clinical recruitment and trials to demonstrate that they qualitatively improve physician decision-making and patient care. Only when laboratories can thus clinically validate new tests can they qualify for reimbursement.

Also, while the price of molecular diagnostic testing decreases with volume, equipping a laboratory to perform molecular testing can require significant capital expenditure for instrumentation as well as result in higher costs on a pre-test basis. Such cost concerns can intensify if reimbursement is insufficient to cover the outlays for additional reagents and labour.

Moreover, some molecular tests can often be nearly two to ten times more expensive than equivalent immunoassays. Such cost issues are likely to limit the uptake and usage levels of molecular diagnostics tests.

Despite such challenges, the European molecular diagnostics market is projected to grow at a healthy compound annual growth rate (CAGR) of 15.0 per cent from 2004 to 2011. Driven by the emerging cancer and single nucleotide polymorphism (SNP) diagnostics markets, as well as by the expanded application of existing infectious disease technologies, overall market revenues are forecast to soar from US$442 million in 2004 to US$911 million in 2011.

Indicative of high levels of end-user acceptance, infectious disease testing currently accounts for over three quarters of total molecular diagnostics revenues. This figure is likely to shrink as the market share of cancer and pharmacogenomic diagnostics-each of whom generated nearly 10 per cent in revenues in 2004-expands.

Novel products for early disease detection will spur rapid growth in the molecular cancer diagnostics arena with emerging tests expected to be quicker, more easily reimbursed, simpler, and more accessible. Even higher growth is anticipated for the pharmacogenomics sector, which is set to become a highly lucrative sector in the long-term, as targeted personalised medicine becomes a reality.

From a competitive standpoint, the larger companies dominate the well-established molecular testing sector. However, the incentive of considerable profits from intellectual property patents has encouraged innovation by smaller companies that might be deterred from entering an otherwise formidable market.

"To maintain competitiveness, companies need to focus on developing technologies that exhibit higher specificity and reliability than those currently available," says Dr. Rahman. "Developing integrated systems that combine sample preparation and detection processes will also determine future market success."

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