Advanced histology staining equipment will capture a greater market share


There’s good news for anatomic pathologists in the forecast from one expert watching the U.S. market in equipment for clinical diagnostics. According to Winny Tan, Ph.D, a Senior Analyst with Frost & Sullivan, the increasing rate of cancer incidence in the U.S. will drive robust growth in tissue-based diagnostics.

She predicts that revenues from that segment will more than double by 2016, growing from the $1.029 billion in 2009 to $2.278 billion in 2016. Tan made her predictions in an article in the May 15, 2010 issue of Genetic Engineering News.

“The tissue diagnostics [equipment] market contains two submarkets with distinct market characteristics: the pre-analytical and routine staining market and the advanced staining market,” Tan wrote.

She predicts that, while both markets will experience growth in the coming years, the market for advanced staining equipment will capture an increasing market share, growing from just over 60% of the market in 2009 to about 75% of the market by 2016. Much of the growth in this sub-market, Tan noted, will come from sales of immunohistochemistry (IHC) assays and the emerging market in molecular diagnostic assays.

“The near-term health of the tissue diagnostics market is dependent on increasing process standardization in the anatomic pathology laboratory and on improving laboratory workflows,” Tan said. “Currently, anatomic pathology laboratory processes lag behind the quality standards and productivity achieved by the clinical chemistry laboratory.”

This lag, particularly in the pre-analytic and routine staining market, presents significant opportunities for tissue diagnostic instrumentation manufacturers, she explained.

“The long-term health of the total tissue diagnostics market is dependent on significant paradigm shifts surrounding companion diagnostics and molecular diagnostic technologies,” she continued. “The current reimbursement structure for diagnostic testing in the U.S. does not sustain an adequate return-on-investment for the developers of companion diagnostics as compared to their pharmaceutical partners that are developing the therapy.”

tissue diagnostic markets

This chart shows the basis of Winny Tan, Ph.D.’s prediction that, in the U.S. tissue diagnostics market, the advanced staining segment will grow at faster rates that the market segment for pre-analytical and routine staining. Tan expects the advanced staining market to reach a 70% market share by 2016, compared to a share of about 55% in 2006. (chart © 2010 by Genetic Engineering News)

Molecular diagnostics faces similar challenges, she said, because the U.S. Food and Drug Administration has been cautious in granting approval for in situ hybridization (ISH) tissue diagnostic tests.

How these reimbursement and regulatory issues are worked out will affect the long-term viability of the tissue-diagnostics market. If the reimbursement barriers can be solved, expect pathology equipment manufacturers to quickly step up development of technology and automated systems. That will allow pathology vendors to take advantage of investments that anatomic pathology laboratories will be required to make to meet the anticipated growth in tissue-based diagnostics.

Considering the current technology gap that Tan noted in the processes used by tissue-diagnostics, investments in new histology technology could mean big leaps forward in productivity for anatomic pathologists, even as demand for their services increases steadily in coming years.

—K. Branz

Related Information

Tissue-Based Diagnostics Niche Expanding

Genetic Engineering News

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