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European Diagnostics Market In Flux During, After COVID-19

By Allison Proffitt

August 3, 2020 | In June, the Economist Intelligence Unit released an overview of the European in vitro diagnostics market pre- and post-COVID-19. The European diagnostics market has been growing quite slowly since 2013, not topping 1.5% growth year over year. While now the demand for COVID-19 and respiratory disease diagnostics has spiked, will it make up for the decline in demand for other tests as hospitals and clinics have been closed to elective procedures during lockdown? And how will the market—and healthcare systems as a whole—navigate what EIU believes is a coming economic depression in the wake of the pandemic?

“Despite the strong impact of COVID-19 at a global scale, most of the drivers and barriers originally thought to affect the European IVD market in 2020 still remain in play,” the authors write. “While some of these pre-COVID factors might now see their impacts delayed, they should nonetheless be taken into account as countries recover from the effects of the pandemic.”

The COVID-19 pandemic has caused complicated impacts across Europe and the world. For the molecular diagnostics market, EIU analysts predict a shift in the balance of test types that will see growth, especially in the short term. In addition to expected growth in COVID-19 and related respiratory diagnostic tests, they expect to see an increase in demand for infectious disease tests, particularly for respiratory and hospital acquired infections. Although laboratory-developed test revenues have fallen in recent years, these should turn around as many labs will turn to LDTs in addition to or instead of commercial COVID-19 tests.

The analysts expect to see an increase in lab equipment spending for infectious diseases as well. Already there has been an increase in numbers of PCR and qPCR installations as labs improve their capacity to test larger volumes of samples with molecular methods. “Sample-to-result” automation and faster turnaround times will be prioritized, they predict.

But apart from infectious disease, these impacts may be limited. Hospitals and labs will likely hesitate to make large investments in new diagnostic instruments not related to infectious disease testing as they brace for the predicted economic downturn. Non-essential medical testing has been delayed in many places, so those markets are expected to slow including routine health checks, bone health tests, and hormone testing. However, in vitro diagnostics for life threatening conditions—tests related to cardiac conditions, transplant, cancer, and obstetrics—will be less affected.

Overall, the EIU report authors expect diagnostics in immunology, molecular microbiology, and genetics to increase in value and volume over the next two to five years, while simple blood counts, cytology, and histology will decrease.

Impending Regulatory Changes

The report points out that regulatory changes in the IVD market are currently scheduled quickly on the heels of the pandemic. The European Directive for IVD & Medical Devices is scheduled to be in effect by 2022, requiring that laboratories justify the need and applicability for any non-CE-marked IVD testing, and that such tests meet the general safety and performance requirements laid out in the directive.

“This means laboratory developed tests will become more costly and time consuming due to the additional validation required,” the analysts write. “It’s expected that many labs will migrate all but the most specialized tests to CE-marked reagents and instruments to avoid having to go through an increasingly bureaucratic validation process. IVD manufacturers will also be required to produce additional clinical evidence of product performance throughout the product’s life cycle.”

But EIU analysts don’t expect the regulation to continue on the same timetable regardless of the pandemic. Post COVID-19, countries will likely implement significant reforms to healthcare systems, they predict, and the European IVD Directive may see delays or changes as new tests are rushed to help manage new disease outbreaks.

With healthcare system upgrades, the analysts expect a “slow but steady” increase in expenditures due to national investments to address the growing health burden, but they also foresee that growth being dampened by cost control measures that are focused on direct cost reduction rather than holistically looking at overall patient costs.

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