Market Trends of Clinical Laboratory Services Industry
The Independent Laboratories Segment is Expected to Register Healthy Growth Over the Forecast Period
In highly populated and developing countries like India and China, where a significant share of the population does not have access to proper medical diagnostic facilities, independent laboratories have a huge opportunity to thrive, as they can fill the deficit of clinical service providers in these regions.
The increasing number of independent laboratories in developing countries is expected to propel the segment’s growth over the coming years. For instance, according to the January 2023 report by the National Accreditation Board for Testing and Calibration Laboratories (NABL) of India, around 8,199 NABL-accredited medical labs were present in India in January 2023, compared to 6,975 in March 2022. Thus, the increasing number of independent labs is projected to support segment expansion over the forecast period.
The independent laboratories segment is projected to experience growth owing to various collaborative efforts undertaken by laboratories to strengthen their business avenues. In November 2022, GC Labs signed a new contract with Medlab Asia, a global partner in Thailand, marking its ongoing commitment to building a strong diagnostics network in Southeast Asia. With this partnership, GC Labs planned to expand its operations across Southeast Asia. In November 2022, PreciseDx collaborated with the pathology laboratory at Dordrecht Hospital, Netherlands. With this collaboration, PreciseDx leveraged its AI-driven Cancer Risk Stratification platform. Therefore, all these developments are anticipated to fuel the segment expansion over the forecast period.
The high burden of chronic and infectious diseases facilitates market players to establish independent/reference laboratories to accelerate diagnostic testing, which is further expected to propel segmental growth. For instance, in August 2023, the American Institute of Pathology and Laboratory Sciences Pvt Ltd established a reference laboratory in India to cater to the increased burden of infectious diseases in the country. Thus, increasing efforts by market participants to establish independent lab services are anticipated to propel segmental growth over the forecast period.
North America is Expected to Hold a Significant Market Share Over the Forecast Period
The key factors driving the growth of the North American clinical laboratory services market include the presence of key players and government organizations in the country, which creates awareness among the general population and allows them to access services conveniently. For instance, the American Clinical Laboratory Association is a not-for-profit organization that offers members the benefits of representation, education, information, and research.
The high burden of the target and chronic diseases in the region and increasing demand for early diagnosis are the other major factors that are driving the growth of the market in North America. For instance, according to the American Cancer Society 2023 update, about 1.93 million new cancer cases were estimated to be reported in 2023 in the United States, compared to 1.9 million cases in 2022. In addition, according to a report by the Canadian government published in September 2023, about 28,600 Canadian women were diagnosed with breast cancer in 2022, representing 25% of all new cancer cases in women that year. The high burden of chronic diseases in the region is likely to create a high demand for robust diagnostics, fueling the demand for clinical laboratory services in the region.
A favorable reimbursement framework for clinical laboratory services in the region is expected to support regional market growth. For instance, as per the January 2024 update from the American Clinical Laboratory Association, various clinical labs across the United States were reimbursed for their services to Medicare beneficiaries using the clinical laboratory fee schedule or the physician fee schedule based on the nature of the service. In addition, in November 2023, the American Clinical Laboratory Association commended the inclusion of clinical laboratory services in the short-term spending package passed by Congress. Thus, such favorable reimbursement policies for clinical lab services are pushing service providers to extend their offerings in the region.
The presence of key market players in the country, acquisitions, partnerships, and new launches are further expected to complement the growth of the clinical laboratory services market in the country. For instance, in August 2023, Labcorp signed an agreement with Tufts Medicine to acquire Tufts Medicine’s outreach laboratory business. This agreement helped Labcorp expand its diagnostic testing laboratory services across the United States.
In August 2022, Labcorp announced that it had closed the acquisition of RWJBarnabas Health's outreach laboratory business and selected related assets. RWJBarnabas Health is New Jersey's largest academic health system. Due to the above-mentioned factors, North America is expected to hold a major market share during the forecast period.
