Market Trends

COVID-19 Fuels Massive & Sustainable Growth in Molecular Diagnostics

While it may be decimating demand for most lab tests, COVID-19 is driving incredible growth in molecular testing. The global market for molecular diagnostics will top $13 billion in 2020, about $5 billion more than last year. That’s the eye-popping but not surprising finding of a new report from medical market research firm Kalorama Information.

Report Methodology

 Kalorama’s data reflect sales estimates and forecasts based on country- and state-reported test volumes, pricing data and revenues of IVD manufacturers. The worldwide totals include reagents and instruments and directly related sales. Estimates include revenue to IVD manufacturers but not lab revenues. Kalorama also excluded antibody sales.

The report considered not just reverse transcription polymerase chain reaction (PCR) molecular tests detecting RNA from the SARS-CoV-2 virus but also assays for HIV, hepatitis, cancer, inherited diseases and other non-COVID-19 diseases and conditions.

From $0 to $4.4 Billion in the Blink of an Eye

 Molecular diagnostics was already a growth area before the pandemic. But Kalorama estimates that COVID-19 testing will add $4.4 billion to the mix, causing the total for all molecular tests sold for a clinical diagnostic purpose to exceed $13.4 billion this year. And to think, none of this COVID-19 testing revenue existed in 2019, or even the first two months of 2020. The surge began after Q1 in April, when worldwide cases began to spike. However, Kalorama also found that volume has been levelling off in recent months, citing the following factors:

  • The “first wave” of the pandemic has passed in regions of Western Europe and Asia;
  • Countries with growing case numbers have already ramped up testing capacity to maximum growth levels; and
  • Test volume has been hindered by shortages of supplies, RNA extraction kits and PPE.

Is Growth a Fixture or a Flash in the Pan?

 Kalorama expects strong growth in molecular diagnostics to continue at least into 2021, especially given current COVID-19 disease trends. COVID-19 testing revenues will likely be significant in the next few years, even when current crisis demands subside and COVID-19 tests become elements of panels for flu and other respiratory conditions.

More significantly, molecular diagnostics revenues will probably keep growing fast even without COVID-19 tests, fueled by the expected surge of “make-up” healthcare visits and procedures that were put on hold during the pandemic. “If molecular resources normally dedicated to other tests are diverted to COVID-19, the overall market for molecular diagnostics will continue to grow,” reports Kalorama, noting that many COVID-19 test makers produce tests for other infectious diseases such as HIV and Zika.

Takeaway

COVID-19 testing added jet fuel to a market that was already enjoying rapid growth before the pandemic. Although the powerful surge is unprecedented and ultimately unsustainable, COVID-19 testing will continue to generate significant revenues for a few more years. But molecular test makers and labs will continue to make money at accelerated rates as a result of make-up testing and, in the long term, as a result of what the pandemic has done to raise awareness of PCR and other forms of molecular tests.


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