US Clinical Diagnostics Market Analysis

US Clinical Diagnostic Market Executive Summary

US's clinical diagnostic market was valued at $28.95 Bn in 2022 and is estimated to expand at a CAGR of 4% from 2022-30 and will reach $39.61 Bn in 2030. A disease, sickness, or damage is diagnosed based on a patient's signs and symptoms, as well as the patient's health history and physical exam. Following a clinical diagnosis, additional testing may be undertaken, such as blood tests, imaging investigations, and biopsies.

Sales of clinical diagnostics products have increased significantly in the United States over the years, and this trend is expected to continue even during the projection period, owing to the growing elderly population. Patient awareness of the importance of laboratory tests is growing, as is the prevalence of infectious and chronic disease patients. The rising frequency of COVID-19 infections has resulted in more funding and testing, which has enhanced total market growth. For example, the National Institutes of Health in the United States announced in September 2020 that it would provide USD 129.3 million in funding to nine companies to scale up manufacturing support for a new set of COVID-19 testing technologies as part of its Rapid Acceleration of Diagnostics (RADx) initiative.

Market Dynamics

Market Growth Drivers

As the population ages and lifestyles change, the incidence of chronic diseases such as diabetes, cardiovascular disease, and cancer is increasing. This is leading to a growing demand for diagnostic tests that can detect these conditions early and accurately. The CDC estimates that six in ten adults in the United States currently live with a chronic disease such as cancer, heart disease, or diabetes. Chronic diseases are among the top causes of death in the United States, accounting for approximately 38% of all deaths.

Advances in diagnostic technologies such as genomics, proteomics, and digital pathology are leading to the development of new and more accurate diagnostic tests. These tests are able to detect diseases at an earlier stage and with greater precision, which is leading to improved patient outcomes. Personalized medicine involves tailoring treatment to the individual characteristics of each patient, including their genetic makeup, lifestyle, and environment. This approach is driving demand for diagnostic tests that can identify biomarkers and genetic mutations associated with specific diseases, which can help guide treatment decisions. Healthcare spending in the United States continues to rise, driven in part by an aging population and the increasing prevalence of chronic diseases. This is leading to increased investment in diagnostic technologies and greater utilization of diagnostic tests. As healthcare providers shift their focus toward preventive care, there is a growing emphasis on early detection and disease prevention. This is leading to increased demand for diagnostic tests that can detect diseases at an early stage when they are more treatable and have a better prognosis.

Market Restraints

The clinical diagnostics market is subject to strict regulatory requirements and reimbursement policies, which can create barriers to market entry and limit the profitability of new diagnostic tests. Companies need to navigate complex regulatory processes and work closely with payers to ensure that their tests are covered and reimbursed appropriately. The clinical diagnostics market is highly competitive, with a large number of established players and new entrants vying for market share. Companies need to differentiate themselves through the development of innovative diagnostic tests, strategic partnerships, and targeted marketing efforts.

Advances in diagnostic technologies have created a rapidly evolving landscape, with new tests and technologies being introduced on a regular basis. Companies need to invest in research and development to stay ahead of the curve and ensure that their tests are competitive and effective. The high cost of diagnostic tests can be a barrier to adoption, particularly in a healthcare environment where cost containment is a key priority. Companies need to balance the need for high-quality diagnostic tests with the need to keep costs under control. Diagnostic tests generate large amounts of sensitive patient data, which can be vulnerable to privacy breaches and cyber-attacks. Companies need to invest in robust data privacy and security measures to protect patient data and maintain public trust.

Competitive Landscape

Key Players

• Quest Diagnostics
• Abbott
• BioMérieux
• Danaher Corporation
• Siemens Healthineers
• F. Hoffmann-La Roche
• Thermo Fisher Scientific
• Sysmex
• Sonic Healthcare
• BioReference Laboratories
• Laboratory Corporation of America Holdings
• Qiagen

Notable Deals

In August 2021, Thermo Fisher Scientific announced that it had completed its acquisition of PPD, a leading provider of clinical research services, for $17.4 billion. The acquisition expands Thermo Fisher's presence in the clinical research market and strengthens its offerings in drug discovery and development.

Healthcare Policies and Regulatory Landscape

Regulatory policy plays a critical role in the US clinical diagnostics market, as diagnostic tests must be evaluated and approved by the US Food and Drug Administration (FDA) before they can be marketed and sold to healthcare providers and patients.

The FDA regulates diagnostic tests as medical devices and has established a risk-based classification system that determines the level of regulatory scrutiny required for each type of test. For example, high-risk tests, such as those used to diagnose cancer or infectious diseases, are subject to the most rigorous regulatory requirements, including premarket approval and ongoing surveillance.

In addition to premarket review and approval, the FDA also oversees post-market surveillance and monitoring of diagnostic tests to ensure that they continue to be safe and effective over time. The agency may require manufacturers to conduct post-market studies or submit additional data to support the ongoing safety and effectiveness of their tests.

Reimbursement Scenario

Reimbursement is a critical factor in the US clinical diagnostics market, as diagnostic tests must be covered and reimbursed by the government and private payers in order to be widely adopted by healthcare providers and patients.

The reimbursement landscape for diagnostic tests is complex, with different payment models and coverage policies depending on the type of test, the indication, and the payer. Some tests are reimbursed under fee-for-service models, in which providers are paid a set fee for each test performed, while others may be reimbursed under value-based or bundled payment models that link payment to patient outcomes.

The Centers for Medicare and Medicaid Services (CMS) sets reimbursement rates for diagnostic tests under the Clinical Laboratory Fee Schedule (CLFS), which is updated annually. The CLFS sets payment rates based on the actual cost of performing the test, as reported by clinical laboratories.

In addition to CMS, private payers such as health insurance companies also play a critical role in reimbursement for diagnostic tests. Private payers may use a variety of payment models and coverage policies and may require preauthorization or other requirements before covering a test.