In-vitro Diagnostics Market Trends

Growth Drivers

• Rising burden of chronic diseases driving longitudinal testing: Chronic disease prevalence continues to expand the baseline demand for routine and repeat diagnostic testing, propelling the in vitro diagnostics market. The U.S. CDC report states that many people in the U.S. live with chronic conditions necessitating continuous laboratory monitoring. Furthermore, diabetes is also the condition generating a sustained demand for biochemical and immunoassay-based testing. Similar trends are seen worldwide, with the World Health Organization's (WHO) September 2025 report pointing out that non-communicable diseases account for 74% of global deaths. The high volume of disease cases is driving increased demand for testing and favoring scalable reagent supply models along with long-term service agreements with centralized laboratories.
• Diagnostics as a pillar of universal health coverage: Diagnostics are the key driver directly influencing the market access quality and the effect of care delivery. The WHO report in March 2025 estimates that nearly 70% of the clinical decisions depend on the diagnostic test results, underscoring the central role of laboratory services in effective treatment pathways. However, the governments and multilateral agencies are expanding the national Essential Diagnostics Lists and allocating public funding toward laboratory capacity building, workforce training, and supply chain strengthening. These policy-driven investments are embedding diagnostics into publicly funded primary and secondary care systems. From a market perspective, this shift supports sustained volume-led demand growth in emerging economies, mainly in government procurement and donor-backed health programs rather than discretionary private spending.
• Government funding for precision medicine initiatives: National investments in precision or personalized medicine are catalyzing demand for companion diagnostics and advanced genomic tests. These initiatives fund the research, development, and integration of tests that guide targeted therapies. The U.S. All of Us Research Program, funded by the NIH, aims to collect genetic and health data from a million people, inherently promoting the use of genomic sequencing and related diagnostics. Similarly, Genomics England and national genomic medicine initiatives in countries such as Australia mandate the use of specific NGS-based diagnostics, creating guaranteed markets for approved assays linked to funded treatment pathways.

Challenges

• Reimbursement complexity and pricing pressure: Securing favorable reimbursement codes and payment rates from the insurers is critical in the market. The governments actively constrain pricing to manage healthcare budgets. The detection kits that are launched by the top players face a multi-year reimbursement challenge with Medicare impacting commercial adoption despite breakthrough status. Though there is a growth in the market, the government pricing constraints in major markets such as Japan and the EU compress the manufacturers' margins.
• Rapid technological obsolescence: The fast pace of innovation risks rendering new products obsolete quickly. Companies must continuously invest in next-gen platforms. For example, companies focusing solely on the traditional PCR system face displacement by firms with their droplet digital PCR technology, which offers superior precision for niche applications such as liquid biopsy, as detailed in their annual R&D investment reports.