Post-pandemic recovery trends and future outlook

Inside APAC’s IVD market

Post-pandemic recovery trends and future outlook

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Post-pandemic recovery trends and future outlook

Contents
2 Introduction

3 Governments are increasingly prepared to spend to address gaps in

APAC’s healthcare infrastructure

6 Full recovery of patient footfalls and rollout of several high-value

biomarkers and products drove Core Diagnostics markets higher

9 Increasing reliance on point-of-care/rapid tests as the first line screening

method for infectious diseases

11 Further expansion of PCR laboratory capabilities to other testing areas

14 Future of IVD markets: key technologies and areas to look for

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Post-pandemic recovery trends and future outlook

Introduction
Over the past year, the in-vitro diagnostics (IVD) market has focused
on how to navigate a post-covid-19 world. During the pandemic,
accelerating rollout of various digital health initiatives led to great
opportunities for physicians to reach patients through telemedicine
and digital consultation platforms, paving the way for a higher quality of
patient care. This recent development has transformed the way different
companies in the IVD industry think and operate, as they now focus on
this growing emphasis towards providing a consumer-centric iterative
approach to deliver better value to end users as a key strategic approach
to pursue growth in an ever-changing post-covid-19 world.

In this report, we examine the dynamic IVD market in Asia-Pacific

(APAC) in the last two years (2021-2022) and in the next five years (2023-
27) to gauge the impact of an increasingly digitised healthcare market
towards various IVD market sub-segments.

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Post-pandemic recovery trends and future outlook

Governments are increasingly

prepared to spend in order
to address gaps in APAC’s
healthcare infrastructure
In past decades, growth in healthcare spending has mirrored the gross
domestic product (GDP) growth. The first signal of growth deviation was
during the pandemic in 2020-21; as the real GDP figures for APAC (total)
declined by 3.3%, the overall spend on healthcare per capita increased by
2.9%. This surge in healthcare spending was not unprecedented due to
the nature of the covid-19 emergency, as governments allocated higher
funding to bolster their healthcare infrastructure to mitigate any potential
collapse due to surging cases. In retrospect, we observed that the bulk
of the investments were made towards PCR (molecular) analyzers,
antigen testing products, as well as instruments/reagents involved in the
treatment funnel for covid-19 patients.

In 2022, healthcare related spending shifted from covid-19 victims to

patients who postponed treatment and disease management during the
pandemic, as well as the resumption of many governments’ long-term
healthcare planning strategies. The growth in healthcare spending dipped
to only 1.2% (2021-2022) despite GDP growth returning to positive 2.0%
in the same period. However, this is a strong indication that healthcare
spending is a growing priority in the minds of the government and
population as it managed to sustain the inorganic growth in spending in
the pandemic period. Certain governments are now focusing their long-
term growth policies to benefit their improved healthcare infrastructure to
reduce the burden of prominent infectious diseases such as TB, Hepatitis
and other STIs.

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Post-pandemic recovery trends and future outlook

Figure 1: Real GDP v healthcare spending growth in APAC

APAC average real GDP v healthcare spending growth

11.0

3.9 4.4 4.1

2.2 2.9 2.0 2.4
5.5
2.2 2.1 2.1 2.2
0.9 1.2
25,924.8
25,360.4
-3.3 24,840.5
24,324.9
23,340.8 23,802.9
22,869.5
22,116.8
2,004.5 2,083.3 2,174.9 2,264.5
1,694.1 1,743.3 1,934.8 1,957.2

2019 2020 2021 2022 2023 2024 2025 2026

Average GDP per capita (in USD) Real GDP per capita growth (%)

Average healthcare spending per capita (in USD) Healthcare spending per capita growth (%)

Source: Economist Intelligence Clearstate research and analysis

The IVD testing industry in the region expanded by about 15.2%

to reach USD 29.7 billion in 2022, owing much growth to the
return of patient footfalls and routine examinations that were
limited during the 2020-2021 pandemic period. At the same time,
the covid-19 testing market value declined by about 36% YoY,
causing the demand for tests to decline as caseloads decreased.

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Post-pandemic recovery trends and future outlook

Figure 2: Covid-19 fuelled growth in APAC and LATAM region

APAC IVD market size (US$m), excluding SARS-CoV-2

23,894
21,852
19,341 18,977

4,312
2,352 2,758

APAC IVD Market (excl COVID-19) COVID-19 Reagents

2019 2020 2021 2022

Source: Economist Intelligence Clearstate research and analysis

In the following sections, we dissect the in-vitro diagnostics market

further to identify three key growth areas driving IVD market growth in
upcoming years:

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Post-pandemic recovery trends and future outlook

Full recovery of patient footfalls

and rollout of several high-value
biomarkers and products drove
core diagnostics markets higher
In 2021, the lack of recovery in the core diagnostics (CEDx) market was a
primary reason why the IVD market had stagnated growth. This was due
to the government-mandated restrictions for non-essential healthcare
services during the delta variant of covid-19 peak in Q2 and Q3 of 2021.

Later in the year, a more relaxed restriction policy by most APAC

governments meant that patients who postponed treatment of chronic
illnesses or their routine health screenings had to rush to hospitals
and laboratories to fulfil their testing needs. We noticed that demand
for typical high-volume IVD assays such as basic chemistry tests,
haematology or urine tests had bounced back higher than figures before
the pandemic. This return in patients became the major contributor for
growth in the core diagnostics market, which grew by 4.2% in between
2021 and 2022 to reach a value of more than USD 14.5 billion in the region.

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Post-pandemic recovery trends and future outlook

Figure 3: CEDx market growth, 2021-2022

APAC CEDx market size (US$m)

426
434 1,063
438 1,016
Clinical Chemistry 929 406
1,148
1,270
1,102 942
1,427
1,068 1,358
Hematology 1,251
1,193
2,909
2,835
2,944
Coagulation 2,644

Immunoassay

7,416
Urinalysis 6,798 6,210
7,142

Others

2019 2020 2021 2022

Source: Economist Intelligence Clearstate research and analysis

Apart from the return of patient volumes, we noticed several other growth
drivers for the CEDx market, including:

1. Growing prominence of high-value immunoassay biomarkers such as

Pro-BNP, which is now a more widely used biomarker utilised for the
diagnostic support of cardiac failures

• Other reagents rising in prominence: Cyfra 21-1 (biological marker of non-

small cell lung cancer) and PSA (Prostate-Specific Antigen) under oncology
are increasingly utilised for cancer screenings in some countries.

• Mycobacterium Tuberculosis Interferon - Gamma Release Assays (TB-

IGRA) tests: rising prominence of IGRA tests for TB diagnosis are especially
prominent in countries where latent and active TB incidences are high
(Thailand and Indonesia, among others).

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Post-pandemic recovery trends and future outlook

2. Continued rollout of high-throughput analysers in various settings

• We observed accelerated installations of CCIA systems (fully integrated

benchtop analysers) in 2022 as funding previously dedicated to
pandemic management have now been allocated to other investments.
We also examined differing patterns in investments in these high-
throughput analysers depending on the sophistication level of the IVD
infrastructure landscape.

- In countries where the healthcare infrastructure is considered

mature (such as Singapore, Japan or South Korea), the
implementation of these high-end analysers are mostly underway
with a majority of hospitals and facilities having some fully
integrated benchtop systems.

- Countries in which the IVD infrastructure landscape is less mature

and the healthcare services demand is unstable, cost constraints
remain the biggest barrier against the wider implementation of
these analysers. The increasing number of instrument placements
exclusively happen in high-volume facilities, like central labs or
hospitals in large, urban areas.

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Post-pandemic recovery trends and future outlook

Increasing reliance on point-of-care/

rapid tests as the first line screening
method for infectious diseases
The covid-19 pandemic impacted the healthcare and diagnostics
testing space as it accelerated the adoption of many digital healthcare
technologies like telemedicine. It expanded accessibility to IVD testing
in underserved areas or regions with minimal healthcare infrastructure.
By leveraging telemedicine, healthcare providers can reach remote
populations, reducing barriers to testing and seamlessly improve overall
quality of care. This initiative has incentivised testing manufacturers to
develop and promote devices that can operate in diverse settings.

On that note, as point-of-care (POC) testing devices allow for testing to

be performed outside of traditional laboratory settings, we observed an
accelerating adoption of POC tests for the first-line disease screening
and diagnosis method in markets where CEDx or molecular testing is not
widely accessible. Prior to the pandemic, concerns around test accuracy
was the biggest barrier against the wider adoption of these tests in many
countries. Since then, the successful introduction of over-the-counter
covid-19 testing kits as the first-line method for testing has led to further
government investments to purchase more rapid testing kits for other
infectious disease testing purposes. This has led the non-covid-19 POC
testing market in APAC to increase to become an estimated USD 2.4
billion industry in 2022.

In the next five years, we expect this market to grow by about 8.9% YoY,
as there is an increasing emphasis and rollout of these tests in countries
where basic IVD services such as CEDx or MDx tests are not available in
smaller facilities.

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Post-pandemic recovery trends and future outlook

High growth China, India, Indonesia, Myanmar,

(>8%) Philippines, Vietnam

Moderate growth
Malaysia, Pakistan, South Korea, Thailand
(3-8%)

Flat or minimal growth Australia, Hong Kong, Japan, New Zealand,

(0-3%) Singapore, Taiwan

Figure 4: Strong growth opportunities in POC in many APAC markets

(based on 2022-2027 CAGR)

5 year CAGR of POC by country (%, in USD excl SARS-COV2)

5-yr CAGR

72.3 2022
Australia 80.7
2.2%
1,481.9
China 2,553.7
11.5% 2027
3.4
Hong Kong 3.5
0.6%
174.7
India 266.5
8.8%
39.8
Indonesia 60.7
8.8%
438.0
Japan 463.4
1.1%
19.3
Malaysia 23.5
4.1%
1.7
Myanmar 2.6
9.7%
9.0
New Zealand 10.1
2.3%
16.6
Pakistan 24.0
7.7%
26.3
Philippines 40.5
9.0%
11.8
Singapore 13.1
2.2%
69.2
South Korea 82.2
3.5%
13.6
Taiwan 15.4
2.6%
45.9
Thailand 55.4
3.8%
19.5
Vietnam 31.5
10.1%

Source: Economist Intelligence Clearstate research and analysis

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Post-pandemic recovery trends and future outlook

Further expansion of PCR

laboratory capabilities to other
testing areas
Molecular diagnostics (MDx) testing market was the biggest benefactor
of the pandemic, as PCR tests became the standard in covid-19 infection
confirmation. In Clearstate’s 2021 report, we detailed how the installed
capacity of MDx instruments will lead to strong growth in various infectious
disease test areas as governments are ushering a new strategy of disease
prevention in order to reduce the burden of illnesses for the wider
population. Excluding covid-19 sales, the molecular testing market in APAC
expanded by more than 21% in 2022 to reach USD 3.2 billion in value.

Leading contributors are:

1. HPV genotyping USD 405.9 mil

Genetics, oncology and

2. USD 249.o mil
coagulation marker

3. Blood screening (NAT) USD 207.4 mil

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Post-pandemic recovery trends and future outlook

Figure 5: Top 10 test areas in MDx (2022-2027)

MDx revenue by sub-segment in APAC (US$, mil)

5-yr CAGR

2022
405.9
HPV 20.2%
1,019.5
2027

249.0
Genetics, Oncology
18.3%
& Coagulation 576.9

Blood Screening 207.4

8.0%
(NAT) 304.8

138.5
MTB 14.5%
272.0

166.4
Panels
8.0%
(>2 targets) 244.6

129.7
HBV 6.3%
175.8

89.2
HIV 7.1%
125.4

35.9
Respiratory 10.1%
58.1

13.2
HAI 5.9%
17.5

7.6
Gastrointestinal 13.1%
14.0

Source: Economist Intelligence Clearstate research and analysis

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Post-pandemic recovery trends and future outlook

In the next few years, we expect POC molecular analyser (POC MDx)
sales to capture a larger proportion of the total MDx instruments sold
in Asia-Pacific. POC MDx analysers are increasingly popular due to
several reasons:

1 The modular nature allows smaller laboratories to scale up its PCR

testing capacity depending on its needs

2 Easier operability compared to traditional PCR Instruments: POC

MDx kits compress the extraction, purification and analysis of a sample
into a single cartridge, making it easier to use in wider settings without
requiring laboratories to follow Biosafety standards

3 Faster turnaround time: POC molecular analysers can deliver results

in as fast as 20 minutes. Conventional MDx analysers take significantly
longer time to process samples as they run in bulk, and the DNA
extraction and purification steps often need to run separately by a
trained lab technician

4 Cheaper capital investment needed up front: POC MDx analysers

are significantly cheaper compared to larger instruments, allowing
facilities with limited funds to purchase them

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Post-pandemic recovery trends and future outlook

Future of IVD markets: key

technologies and areas to look for
Governments throughout APAC are likely to put emphasis on further
healthcare investments to meet the increasing demand of healthcare
services. In the next five years, we expect about 3.7% annual healthcare
spending to grow across APAC. While seemingly tepid, this growth
outpaces the overall GDP growth forecast at 2.2%. This is a positive
signal that governments are now prepared to invest in the necessary
changes required to meet the goal of a more sustainable and accessible
healthcare for the APAC population. Consequently, this increase in
healthcare spending is likely to trickle down to other investments in
diagnostic testing capabilities throughout the region.

Continued growth in the IVD market in APAC is likely going to incentivise

test manufacturers to pursue further innovation in their products with
aims to expand their business and market share. We observed three
potential development areas to keep an eye for in the IVD industry in
the next few years:

1. Introduction of microfluidics technology to enhance POC

testing products

• Microfluidic platforms, often referred to as lab-on-a-chip

devices, integrate multiple analytical functions onto a single chip,
miniaturising and automating laboratory procedures. These devices
can perform sample preparation, mixing, reaction, separation and
detection steps in a compact and portable format, making them
suitable for POC testing and resource-limited settings.

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Post-pandemic recovery trends and future outlook

• Microfluidics has the potential to revolutionise POC testing by

enabling compact, portable and user-friendly diagnostic devices.
These devices can be used in decentralised settings, such as clinics,
homes or remote areas, providing rapid and accurate results without
the need for extensive laboratory infrastructure or trained personnel.
Microfluidic POC tests are particularly valuable for rapid diagnosis and
monitoring of infectious diseases like HIV, malaria and influenza.

• Microfluidics for outside of POC applications: microfluidics allow

for precise manipulation of samples. This includes cell sorting,
enrichment and isolation. It enables the integration of sample pre-
processing steps—filtration, concentration and purification—within
a single device. Microfluidic systems can streamline and automate
sample preparation, reducing the time and complexity associated with
traditional IVD workflows.

2. Multiplex testing

• Multiplex testing has broad applications in various areas of IVD,

including infectious disease diagnostics, cancer profiling, autoimmune
disorders, cardiovascular diseases and genetic testing. It continues
to advance with ongoing research and technological innovations,
enabling the development of more sophisticated and comprehensive
diagnostic assays.

• Multiplex testing enables the analysis of multiple analytes within

a single sample, which can include various types of molecules like
nucleic acids, proteins, antibodies and metabolites. This capability
allows for a more comprehensive assessment of the patient's
condition, providing a broader diagnostic picture compared to single-
analyte tests.

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Post-pandemic recovery trends and future outlook

• Multiplex testing significantly improves efficiency and reduces

the need for multiple individual tests. With a single multiplex
assay, it becomes possible to obtain results for multiple analytes
simultaneously which saves time, reagents and laboratory resources.
This is particularly advantageous in situations where rapid diagnosis
or screening of a large number of samples is required.

3. Liquid biopsies

• Liquid biopsies have the potential to detect cancer at an early stage

before symptoms are present. This is done by analysing circulating
tumour DNA (ctDNA) or other biomarkers in the blood associated
with cancer, allowing for early intervention and treatment.

• Monitoring treatment response: liquid biopsies can provide real-

time monitoring of treatment response and disease progression.
By tracking changes in ctDNA or other biomarkers, healthcare
providers can assess the effectiveness of therapies, detect resistance
mechanisms and make informed decisions about treatment
modifications or adjustments.

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Post-pandemic recovery trends and future outlook

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Post-pandemic recovery trends and future outlook

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