Crashing the gates of the top 10 IVD markets

This year, the mature IVD markets, North America, Western Europe, and Japan, will represent seven of the top ten slots on the list of the world’s most important IVD markets. These markets will spend about $22 billion on their suppliers of IVD products in 2008. But growth in these mature markets will remain modest, while margins will continue to be squeezed. Breaking into these markets is particularly difficult for new IVD companies, as they are the home turf of the
major multinationals.
A very different story can be told about the countries that hold three spots on the roster of the top ten IVD markets: China, Brazil, and India. These three rapidly developing countries are now spending more than $2.5 billion per year on IVD products. With double-digit annual growth, this sum will likely double to $5.1 billion in 2015.
China, Brazil, and India are currently ranked sixth, ninth, and tenth, respectively, among IVD markets worldwide. By 2015, they will be ranked third, seventh, and ninth. For producers of IVD instrumentation, these three countries hold a disproportionate importance. There are 52,000 clinical labs in these three countries, only 16,000 of which are automated at present. This year, they will buy more than 8,000 automated hematology systems, more than 4,000 automated routine chemistry systems, and nearly 2,500 automated immunoassay systems.
These three markets have some very interesting similarities and differences. This article compares China, Brazil, and India with regard to the following: market value and accessibility for overseas IVD companies, number and character of their clinical labs, competitiveness of indigenous producers, distribution challenges, and product registration challenges.

Focusing on China, Brazil and India
In 2000, China, Brazil, and India added up to just $900 million in annual IVD spending, and most IVD companies operated in them opportunistically. But with seven years of growth in the 15-20 per cent range, these three countries are of strategic importance to most IVD firms. China is the world’s sixth-largest IVD market, generates annual revenues worth $1.5 billion, and is only a bit smaller than Italy and France. Brazil is ranked ninth in the world, and is slightly smaller than the United Kingdom at $750 million per year. India is the tenth-largest at $340 million per year.
Since 2000, IVD markets in these three countries have been growing at annual rates in the teens (see Figure 1). Market growth has been brisk in these countries, and the outlook for the future is promising. Between 2008 and 2015, average annual growth rates of 14 per cent in China, 11 per cent in Brazil, and 16 per cent in India are expected. Under these assumptions, by 2015, China will surpass Germany to become the world’s third-largest IVD market at more than $3 billion. China is already the second-ranked market in the world for nearly every category of IVD instrumentation, having surpassed Japan, Germany, France, and Italy. By 2015, Brazil will surpass the United Kingdom and Spain to become the seventh-ranked IVD market at $1.4 billion. India will by this time also surpass the United Kingdom to become the ninth-largest IVD market at $915 million per year.
There are several reasons to be optimistic about near-term growth in China, Brazil, and India. These three countries have nearly three billion people among them, a small fraction of whom currently consume IVD tests, and many of whom are now gaining the prosperity to pay for better medical coverage. All three economies are in good shape, with ample foreign exchange. The Economist is predicting GDP growth of 10.1 per cent for China, 7.8 per cent for India, and 4.5