Outlook: Diagnostic labs market

Examine the trends and undercurrents that will redefine how the diagnostics laboratories market will look like in the near future

- NAGESH JOSHI

The starting point of any medical intervention is diagnostics. The importance of diagnostics to treatment of a disease has been T known to man since time immemorial. The ancient Indian compendium on medicine and surgical practice, Suśrutasamhită, dedicates an entire volume to "Nidana Sthana", a book that delves into the prognosis of diseases, their causes, symptoms, and pathogenesis (disease development). While ancient physicians relied heavily on their own experience and expertise for diagnosis, today, the diagnostic laboratories business has evolved into an independent industry within the gamut of healthcare.

Over the past few years, the diagnostic laboratories market in India has been witnessing a significant growth, driven by various factors such as the increasing burden of chronic diseases, growing awareness of early disease diagnosis, and rising demand for advanced diagnostic techniques. According to industry estimates, the current size of the market is about $8-10 billion. Estimates suggest that the market will grow at a CAGR of 12-14 percent over the next five years and reach $20 billion by 2026.

A quick scan

The diagnostic laboratories market in India is significantly under-penetrated, indicating ample room for growth. Pathology tests per 1,000 population in India stand at 1,111, much lower than countries like Brazil, Australia, and the US, highlighting the untapped potential for the industry.

A highly fragmented market, standalone diagnostic centers account for 48 percent, followed by hospital-based labs at 37 percent, and national chains at five percent in India. Among test types, the pathology segment contributes 57 percent to the market share, while radiology accounts for 43 percent, encompassing tests like CT scans, MRI, and ultrasound scans, according to estimates shared by industry leaders.

Top demand drivers