By Isaac Meek

Isaac Meek

Many manufacturers, market participants, and analysts have characterized the growth of the point-of-care (POC) market as disappointing, because current market revenues fall well short of projections from 5 to 10 years ago. Like most things in life, with time comes experience, and POC manufacturers are still poised to make the most of market opportunity. The fact of the matter is that POC testing plays an integral role in critical care, and has significantly contributed to the improved quality of emergency medicine. When the first near-patient products came to the market, visions of Star Trek vaulted expectations and contributed to ridiculous predictions of market growth. Most affected were small and emerging diagnostic companies that had little experience with the in vitro diagnostics (IVD) market or with the bureaucracy of the hospital. As the dust settled, market participants were forced to reevaluate their strategies, and determine if they should develop products for critical care, patient convenience, or both.

Further complicating the market are the numerous, and often very different, definitions of “point of care.” Some manufacturers employ a very strict meaning, only considering those products that can be used at the patient’s bedside. Others have a wider definition of POC and include products that can be used near the patient, such as at a stat lab or a physician’s office laboratory (POL).

The worldwide POC testing market generated revenues worth $3.3 billion in 2002 and is expected to reach $5.5 billion in 2009, with a compound annual growth rate of nearly 8%. The growth of the POC market is slightly better than the total IVD market’s estimated 5% to 6% growth rate, and is approximately 15% of total market revenues. Within the POC market two major types of competitors are found: large diagnostic companies with diverse product lines, such as Roche, and smaller market-focused manufacturers, like Cholestech. A few market participants, particularly i-Stat and International Technidyne Corp, fit neither category and approach the market with unique methodologies.

Current and Future Market Opportunity
To assess the point-of-care market for current opportunities, it is important to separate needs from desires. Product development cannot be focused on the wishes and whims of point-of-care coordinators, nurses, and physicians, but must be based on the development of assays that provide actionable, clinically relevant information. This is not to say that product development cannot be based on an identified need from health care providers; however, the information provided by the POC diagnostic must have an immediate impact on the patient. Biosite, a leader in the cardiac-markers market, defined an entire market with this focus in mind. Biosite’s Triage BNP test provides clinically relevant information, and allows physicians to make important decisions about the condition of the patient. Up until the end of 2002, Biosite’s Triage BNP assay was the only FDA approved product to detect this important indicator of congestive heart failure (CHF). In the past year, Roche Diagnostics and Bayer Diagnostics entered the market and became the second and third manufacturers, respectively, to offer BNP tests. Presently, three other diagnostic manufacturers have acknowledged this market opportunity and will soon offer their own BNP assays. Despite the competition, the portability of the Triage system will be a key driver for Biosite’s continued success.

Defining a new market isn’t the only way to be successful in the POC area. However, current FDA processes provide manufacturers of novel products with a window of opportunity to establish a presence prior to market competition, a fact that has served companies like Biosite very well. Market development is an expensive and risky endeavor, especially in low-margin markets like clinical diagnostics. One area of high growth that has yet to be explored by POC manufacturers is molecular diagnostics. The 2002 US molecular diagnostics market was estimated at $890 million and is expected to reach nearly $2.4 billion by 2009. Despite uncertain utility, several companies are exploring the feasibility of taking molecular diagnostics to the point of care. For example, i-Stat plans to explore the possibility of integrating molecular diagnostics on its popular platform, and HandyLab, in Ann Arbor, Mich, is an emerging company dedicated to supplying molecular diagnostics to the point of care.

Although molecular diagnostics is almost never used in critical-care situations, it is not hard to imagine that a POC viral load test would be a welcomed convenience for an HIV patient and his or her doctor. The market opportunity for such products is unclear; however, what opportunity does exist will emerge once the need for critical care POC products is satisfied and manufacturers begin to shift their primary focus to developing convenience products.

Large testing volumes, coupled with the sophistication of novel molecular diagnostics, have contributed to the decentralization of the clinical laboratory, a trend that is unlikely to change in the near future. The result of this trend has been the growth of both the POC and commercial laboratory markets. In the future, the POC market will not be segmented by testing disciplines (for example, clinical chemistry, hematology, etc.), but by need and convenience. Furthermore, as the market for POC products develops around instruments that provide extensive testing menus, larger diagnostic manufacturers are sure to take notice. Could this mean consolidation? Perhaps, but only time will tell. The only sure thing is that POC is a vital component of patient care, and is expected to increase in importance.

Isaac Meek is a research analyst for Frost & Sullivan. He can be reached at (210) 247-2464 or IMeek@frost.com.