MARKET OUTLOOK AND GROWTH SEGMENTS
APAC’s ageing populations and changing epidemiological trends create demand for new types of diagnostic tests and business models, often tailored specifically to individual countries and cultures. Kuldeep Singh, CEO, Biofourmis says, “We see the interest from payer and providers to assess new innovative methods to deploy and enhance medical diagnostics. China has a huge potential with a vibrant industry. Mature markets like Australia, where government policy and funding reform is incentivising precision medicine; Telcos are investing millions to increase coverage to all corners of the country; insurers are investing in new member health services that benefit greatly from enhanced diagnostic capability and the population is one of the highest technology adopters, provides significant opportunity for research and development and new commercial partnerships.”
New technologies power some of these innovations. Lab automation tools, for example, are bringing efficiencies to regions suffering from workforce shortages and skills gaps. Point-ofcare diagnostics are increasing access to testing in remote areas. And improvements in connectivity are ensuring that the data from all these technologies are collected and analysed, opening new possibilities for medical research and population health management.
Localisation will be key to ensuring that these new technologies are effectively deployed in Asia- Pacific. Also, diagnostic services may need to be recalibrated to meet the price points of low-resource settings. Explaining the various pricing models that diagnostic and medical devices follow, Kuldeep says, “Bundling and volume discounting are common. Often there is a backend system/machine needed to read/analyse/ report data from the point of care device. Discounting of the initial set up cost is common providing there is guaranteed volume turnover. Revenue is often generated through fixed costs after sales service fees, extended warranties and replacement schedules. Future outlook for shifts towards more outcome based pricing may affect the device industry and their pricing models will need to adapt accordingly.”
Asia has an exquisite emerging R&D ecosystem. This has led to producing more of its own IVD products and services. Countries like China, Japan and Singapore are going beyond localisation and playing a growing role in breakthrough innovation.
Cancer diagnostics is one of the main area of focus and has witnessed substantial investment and M&A activity in the past year. In March 2017, China’s Tencent participated in a $900 million funding round of Grail, an American company working on novel methods for diagnosing cancer from blood samples. Japan’s Softbank led a $360 million investment in Guardant Health, which is working on similar technologies in May 2017. And in July 2017, Japan’s Konica Minolta announced plans to buy Ambry Genetics, another cancer screening company, for $889 million. Other innovations are rooted in novel partnerships between IVD companies and other stakeholders. A few diagnostics companies, for example, are partnering with insurers to distribute DNA testing kits for policyholders. By encouraging early detection of disease and disease risks, partnerships like these could improve health outcomes for individuals and thus reduce claims costs for insurers – a win for everyone. Partnerships between IVD companies and governments, NGOs, providers, and even technology firms can provide similar opportunities.
Convergence of digital technology and diagnostics
Digital tech is bringing transformation and disruption to the medical diagnostics arena. The combination of digitization, digital imaging and processing and
machine learning is enabling medical diagnostics to be performed better, faster and cheaper, bypassing manpower constraints.
“One example is in digital pathology.
Traditionally, highly trained pathologists spend significant time visually inspecting tissue samples under the microscope. This is a highly manual process, constrained by the limited numbers of trained pathologists. With the advancement in digital capabilities, the first scan of the tissue samples can be performed reliably by a mathematical algorithm. This step can filter out a sizable proportion of samples and dramatically reduce the time spent by the pathologist. This is especially important in developing countries, where trained pathologists are in short supply”, says Tan.
Alexis believes that the future of diagnostics is digital. “As the general population becomes more accustomed to digital devices and our lives become more digitalized, the convergence of digital technology with health diagnostics products has become an expected natural progression. Healthcare data analytics is also a growing trend due to rising interest from governments, healthcare institutions and private sector organisations. There is a consensus that with more healthcare data recorded, the medical profession will be able to better determine the associated risks and patterns related to various diseases.”
However, in recent years, this focus has turned to consumers taking charge of such data, empowering people to take a proactive approach in managing their own health. “For example, the Omron Connect mobile app behaves like a personal health aide, allowing users to automatically record daily blood pressure and body composition readings. The app also sends reminders and can conveniently share data with doctors, reducing the need to visit clinics and hospitals. This “virtual consultation” trend looks set to grow as well”, she adds.
Technology has a key role to play in making earlier diagnosis a tangible possibility, helping to ease the burden by improving patient outcomes and reducing costs. In April 2018, FDA approved an
AI- powered diagnostic device (by a company called IDx) for ophthalmology that does not need doctor’s help. “Convergence is happening at an accelerated pace with the rise of artificial intelligence (AI) in the form of machine learning on the data that the diagnostic devices are generating. In the past, it was human interpretation of the data that then informed the clinical care. Now we have the ability to enhance and speed up the process. An example is our bio vitals analytic engine which takes in physiological