The diagnostic marketplace in 1990 Essay

The U.S. market for in vitro diagnostic testing products will more
than double between now and 1990, according to one firm that industry
and reference laboratories rely on for long-range strategic planning
consultation. While every kind of testing site will share in the
growth, the breakdown of increases predicted by boston Biomedical Consultants may surprise you.

For example, in constant 1983 dollars, hospital laboratories are
seen spending 11 per cent more per year on diagnostic products. On the
other hand, sales to independent labs will climb at a rate of only 6 per
cent. Clinics and physicians’ offices are tagged for hefty growth
rates in product consumption–19 and 16 per cent, respectively–but
that’s a widely anticipated trend. Another area of ambulatory
care, however, is often overlooked: patient self-testing. Boston
Biomedical looks for this area to start soaring in the next several
years, with annual product sales increases on the order of 27 per cent.

Figure I shows how much of the diagnostic products market each of
these segments accounted for last year and how much they will account
for in 1990. The dollar totals cover assays for full-service labs; kits
for emergency rooms, intensive care units, physicians’ offices,
clinics, and home use; and DNA probe products.

Note that the relative standings among testing sites won’t
change drastically by 1990, in the consulting firm’s view.
Hospital labs will lose just 2 percentage points from their current
predominant position as diagnostic product customers and will still
account for roughly two-thirds of all sales by manufacturers. Other
kinds of testing sites may demonstrate greater growth, but they begin
from a much smaller volume base.

The projections were presented at the recent American Association
for Clinical Chemistry meeting in Washington, D.C. Henry M. Weinert,
president of Boston Biomedical, says DRGs will encourage more laboratory
testing at hospitals. Lab work will be needed both to determine the
patient’s diagnostic classification and to help decide how quickly
the patient can be discharged. “Diagnostic testing is a very
effective way for the hospital to manage shorter patient stays,” he
notes. “It also will be used a lot before the patient is admitted
to make sure taht he or she qualifies for admission.”

With hospital laboratories seeking more outpatient
business–capitalizing in part on the loyalty of their attending
phsicians–and physicians’ offices stepping up their testing
activity, independent labs will slow down in growth, Weinert says. The
presidents of large reference labs were bullish about their prospects in
the DRG era when interviewed for our April 1984 cover story, but Weinert
can’t see any significant new markets opening up for them.

As for that rapidly growing home test market segment, Weinert says
it will involve ethical products for the most part, employed by patients
under the guidance of physicians. Monitoring of chronic disease
conditions (such as whole blood glucose test strips used by diabetic
patients at present) and of aggressive therapy (theophylline test strips
at present) hold strong potential for volume gains. Pregnancy and
ovulatory time test kits, which may be purchased without a prescription,
are also part of the home market.

He observes that a good deal of “gloom and doom” has been
voiced about the overall outlook for diagnostic testing. The future
looks much brighter to him.


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