In vitro diagnostics (IVD) is one of the most exciting segments in global healthcare and the Asian IVD markets have been expanding at a double-digit rate. This growth is propelled by increased affluence, awareness, and spending on healthcare in this region. While the swelling Asian economies continue to fuel demand for IVD, participants in this market must overcome challenges related to distribution channels, intellectual property protection, and a strong local industry to achieve optimum market development.

Asian governments are under increased pressure to provide elderly populations - which are expected to double in the near future - with adequate healthcare. "The desire of the ageing population to remain healthy and active is a leading market driver," says the analyst of this research. "For instance, with over 20 per cent of the Japanese population above the age of 65 and a decreasing productive population: elderly population ratio, the Japanese government is under tremendous pressure to reduce costs for healthcare facilities."

Governments are also imposing stricter disease control measures, motivating market growth and demand, as well as creating a positive impact on the IVD market. The move toward integrated healthcare, especially with the consistent shift toward 'proactive' testing rather 'reactive' testing, is also expected to propel IVD markets.

As Asian economies grow, their populations with increased average life expectancies have also been rising. This creates a requirement for access to quality healthcare.

"As citizens capable of accessing superior healthcare facilities are expected to double in the near future in countries such as China and India, participants must effectively exploit the increased opportunities for revenue increase," says the analyst. "Private insurance companies are gradually intensifying efforts to promote healthcare coverage in the Asian IVD market, which again drives demand since patients having less 'out-of-pocket' expenses."

Over the past few years the Asian IVD markets have been the only markets in the world of IVD that have been growing close to a double-digit growth rate. Japan is the single largest market contributing 90 per cent of the total Asian IVD revenue. The Asian IVD market is a high potential, yet complicated market with each country varying from the other in its culture, stratification of the society, infrastructure, private participation in the health sector, reimbursement, and local competition.

Main Applications of IVD:

a. Early, accurate diagnosis and recognition
b. Monitoring of treatment through progression of disease and of development of resistance

Recommendations:

After a brief overview following strategic recommendations can be enlisted:
1) Vast geographical area causing logistical problems:
- Due to substantial costs in distributing and catering to vast geographical areas, especially in India and China, establish relationships with reputed dealers rather than operating alone.
- Rather than covering the entire Asian region at once, focus on particular geographies one at a time. As a result, logistics is likely to be easier to manage and this allows companies to understand local customs, in terms of business better.
- Form alliances with different regional distributors rather than a single distributor nationwide.
- Train local distributors on product and service issues.

2) Lack of education of key stakeholders on diseases and their diagnosis:
- Co-operate with local universities to develop specific programmes on diagnosis and its impact on healthcare costs.
- Promote products aggressively at healthcare fairs and symposia.
- Design specific educational programmes in local languages. This is likely to benefit millions of primary healthcare workers, spreading awareness of a disease, its symptoms, diagnosis, and therapy. Subsequent dissemination of the information to the entire population.
- Work with local non-governmental organizations so as to reduce the cost of reaching out to public at large.
- Work with universities and governments on research projects relating to disease diagnoses and treatments and promoting these findings actively through the media.
- Work with experts in the field who are widely respected to promote newer tests and the awareness diagnosis.
- Work with pharmaceutical companies already established in the market to spread awareness of disease and their treatment to compliment each others' activities in that particular disease area.

3) Affordability of healthcare community in purchasing new reagents and equipment:
- Many laboratories do not have sufficient purchasing power or lack the funds to buy new equipment. Financing deals need to be agreed upon.
- Introduce less-sophisticated instruments that have fewer features than the standard equipment. Remove features not required by users.
- Work with local governments to reduce duties and other taxes-thus reducing the price of reagents and equipment.
- Aggressively promote and pursue reagent rental options where total costs are on a per-test basis, rather than incurring heavy capital costs when new equipment is bought.

4) Local Competition which manufactures cheaper reagents:
- Sell laboratory services as a whole package rather than selling reagents indivi-dually, thus enhancing customer value.
- Works with local authorities to create standard lab protocol and standards that otherwise are not met by lower-priced local reagents.
- Start manufacturing or outsource manufacturing of reagents in lower cost regions such as India and China.
- Enter markets with innovative-specific reagents that are difficult to reproduce at low prices.
- Form alliances with lab professionals, doctors, and health care providers. Discuss the latest developments in IVD tests and their applications so that the end-user can appreciate the value in continued association with the company.

5) Longer Time for Return on Investments:
- Entry costs are high in these markets, but it pays to be patient and invest in long-term returns.
- Companies should have local strategies for each country rather than have a "one-size-fits-all" strategy.
- Keep the overheads low and operate predominantly through a network of local partners and distributors who maintain the entire infrastructure. Companies must understand market dynamics and invest more in facilities at a later stage.

- (Extracted from Frost & Sullivan research report. For more details , mail sdedhia@frost.com)