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Scarcity of financial resources available for in vitro diagnostics (IVD) is the key challenge for the market across Central and Eastern Europe (CEE). At the same time, ageing societies, growing health awareness and increasing affluence are boosting demand for IVD testing, including technologically advanced molecular diagnostic testing.
New analysis from Frost & Sullivan (drugdiscovery.frost.com), Strategic Analysis of CEE IVD Market, finds that the market earned revenues of $991.4 million in 2010 and estimates this to reach $1,880.2 million in 2017. The study covers clinical chemistry, hematology, microbiology, point-of-care testing, self-monitoring of blood glucose, molecular diagnostics and immunodiagnostics products in the Czech Republic, Hungary, Poland and Russia.
"The rising demand for private testing is a result of the poor efficiency and quality of public laboratories as well as insufficient public funding for IVD in the CEE region," notes Frost & Sullivan Research Analyst Dominika Grzywinska. "This factor is especially visible in Russia, where paid diagnostic services are booming."
In Russia, receiving services financed by the compulsory health insurance (OMS) is very difficult. Public laboratories face several problems, such as poor quality of service, insufficient supply of diagnostic equipment and long waiting times. In other CEE countries, the key reason for people opting for private testing is insufficient financing from health insurance.
Financial resources available for IVD services are insufficient. The money spent on IVD in CEE countries constituted between 1 and 2 per cent of total healthcare expenditure in 2010.
In the Czech Republic, healthcare funding is being reduced, which has limited the resources for IVD. In Poland, there is an absence of control mechanisms on how much should be spent on IVD. In Russia, limited financing has resulted in long waiting lines and poor quality of publicly provisioned laboratory diagnostic services. In Hungary, volume limits were introduced for laboratory services financing in 2006.
"Increasing affluence in these countries, coupled with growing health awareness has, therefore, resulted in higher private expenditure on laboratory diagnostics," remarks Grzywinska.
The lack of funding for IVD has resulted in slow technology uptake and high price sensitivity across CEE. Another challenge relates to the high fragmentation of laboratories, which decreases their efficiency.
Research shows that countries in CEE do not fall behind the developed countries in terms of technologies. New solutions are introduced practically at the same time as in western countries.
"The key difference between those two regions is that the commercial uptake of technologies is much slower in CEE, due to the scarcity of financial resources available for IVD," elaborates Grzywinska. "As a result, even though a technology is available in the country, it may still not be used in routine testing and not be reimbursed."
Furthermore, low public expenditure on IVD has led to increasing price pressures. Price remains the key decision-making factor for end users and this situation is likely to persist throughout 2011-2017.
End users of the CEE IVD market are predominantly small laboratories performing a low number of tests annually. They do not purchase large amounts of reagents, and therefore have to pay retail prices, instead of lower, wholesale prices. In this case, one dollar spent on diagnostics in CEE is less efficient than one dollar spent on diagnostics in western European countries.
"Although new technologies are present in the CEE countries, lack of funding inhibits their commercialisation," states Grzywinska. "Delivering product of top quality at affordable prices is the key to achieving success."
Increasing public financing for IVD would be the fastest and most effective means to improve market prospects. However, in the face of cost mitigation efforts undertaken by governments, this scenario seems unlikely. Therefore, manufacturers should be aware of end users' high price sensitivity and try to balance product performance with cost.
If you are interested in more information on this study, please send an email with your contact details to Janique Morvan, Corporate Communications, at janique.morvan[.]frost.com.
Strategic Analysis of CEE IVD Market is part of the Clinical Diagnostics Growth Partnership Service programme, which also includes research in the following markets: Eastern European IVD Market, Western European IVD Markets and Strategic Analysis of the Global In Vitro Diagnostics Market. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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Strategic Analysis of CEE IVD Market / M693
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