Skip to main content

Diagnostic Industry at the Cusp of a New Era !!!

- Nimesh Salot

A common perception about diagnostics is that it is meant to detect the presence or absence of a particular disease. This is no longer the situation, diagnostic has a pivotal role across the entire healthcare value chain, which itself has been in a constant evolution mode. From being simply a reactive and treatment focused adjacency to healthcare ecosystem, it is now also being viewed from a perspective of wellness and preventive. People have been open in making use of the available diagnostic facilities for prevention and early detection of diseases. Terms which were hitherto complex and not so familiar such as polymerase chain reaction (PCR) or real-time polymerase chain reaction (RT-PCR), with Covid-19, have become a household name. The various market trends and technological advancement that is happening and the complementarity which it beholds for the overall healthcare system has made diagnostics an area of serious interest for all stakeholders - Governments, healthcare players and common man et al.

The Indian diagnostics industry is generating revenue of around INR 923 bn for FY23 and is estimated to grow at a CAGR of 14% to reach INR 1,360 bn by FY26. The industry could be further bifurcated between pathology at 57% and radiology at 43%. Of this, the routine or low-tech tests across both the segments are estimated to grow at around 10% while the more advanced or technology driven tests are estimated to grow between 13% to 17%.

I would like to touch a major trend and technological advancements that has brought in far reaching changes in the industry - not only in India but also at the global level.


A. Unorganised to Organised Shift and Heralding more Competition

The Indian diagnostics is a highly fragmented sector with standalone centers contributing 47% of the total market. National chains and the regional chains contribute around 5% and 11%, respectively whereas in-hospital diagnostics has the second highest share at 37%. This scenario is likely to change in coming 3-5 years due to following factors:

  • Market share capture by National Diagnostic Chains: Growth rate of the diagnostics chains is higher than that of the overall industry. The diagnostics industry is going through a consolidation phase wherein the national chains have been acquiring stand-alone centers and/or regional chains to strengthen their geographical presence and thus gain market share.

  • Entry of Pharma Companies: Some of the large pharma companies such as Mankind Pharma (Pathkind Diagnostics) and Lupin Diagnostics have already entered the arena and are quickly looking to scale up while Torrent has also announced its intentions to enter the diagnostics segment.

  • Advent of Integrated Digital Health Platforms: Healthcare services aggregators such Practo, Pharmeasy, 1MG, Netmeds have already created lot of disruptions in the market. They have brought in some path-breaking changes in terms of customer experience, pricing and turnaround times and are now backed by some of the large corporates - Tata Group with acquisition of majority stake in 1MG, Reliance Industries' acquisition of controlling interest in Netmeds, Pharmeasy's acquisition of Thyrocare.

  • Expansion by corporate hospital chains is also likely to further move the business away from unorganised to organised players.


B. Technological Advancements

Diagnostic is no longer restricted to just diagnosing but also offer prognosis. Technological advancements have helped clinicians in regular monitoring of patients, offer more accurate care pathways and improve patient outcomes by way of an earlier and more targeted intervention. The future of healthcare is about being able to identify chances of diseases or its likely occurrence at a very early stage and explore possibilities of preventing them. This calls for availability of information about individuals and populations from reliable sources. Thus, a combination of technology and data science with the help of artificial intelligence/machine learning is likely to dominate the next wave of advancements in the diagnostics industry.

Variety of technologies which is likely to improve the efficiency and effectiveness of diagnosis in coming 3-5 years has been briefly explained hereunder. However, to realise the full benefit of these technologies, it will be necessary to educate and train clinicians, to enhance their understanding of data science and genomics, digital technologies and Artificial Intelligence (AI).


  • Genomics and Data Science

    This is highly specialised testing and has been extremely effective in oncology, reproductive health, and predictive testing. Genomics is likely to drive personalised, predictive and more accurate diagnosis and treatment protocols.

    Currently, molecular techniques like gene sequencer, real-time PCR and microarrays may detect more precisely and specifically without consuming much time. Next generation sequencing has facilitated a rapid progress in bringing down the cost of genome sequencing to just around USD 1,000 which, till a few years back used to cost prohibitively expensive.

    Each such sequencing throws up so much of data which needs to be interpreted in the right manner. Hence, the necessary infrastructure and resources will need to be built to take full advantage of this technology. Genome based diagnosis is likely to evolve from a niche field to a widely applicable technology to investigate complex diseases and give clues for prevention and guidance for optimised and personalised treatment modalities.

    This segment is likely to witness growth of more than 35-40% in the coming 3-5 years.


  • Digitisation and AI

    Medical devices using digital technologies has improved the turnaround time for providing the test results. One such example of this is the digital microscopy vs the manual microscopes. Most of the routine pathology tests have been performed by lab technicians as a manual process. With the advent of the digital microscopes this has helped labs manage a processing of larger number of samples and at the same time provide results in a much faster time. This digitisation has been ably backed by the data or the artificial intelligence powered by the algorithm covering vast population data.


  • Point of Care

    The diagnostics industry is likely to face another major disruption in the form of point-of-care (POC) testing tools. POC diagnostics refers to a device or an instrument that is used to acquire particular clinical information of patients, in most cases at the physician's clinic. This type of testing is quite relevant for chronic ailments, which require frequent testing, such as diabetes, thyroid, liver disease, amongst others. Blood sugar monitors is one such most commonly used device for testing at the clinics. During Covid-19, Rapid Antigen Test Kits were used extensively at home for Covid-19 tests vs getting an RT-PCR test done at a laboratory. As more and more devices are being developed, the routine tests are most likely to witness a significant shift in volumes from labs to either at-home or at doctor's clinics. There are lot of products under development both by large med-devices companies as well as start-ups which are likely to create significant disruptions in the sector.

In order to achieve the best results from some of these technological advancements or market trends, a lot of collaboration would be required across all the stakeholders along with fair bit of education and awareness across the healthcare professionals and policy framework would need to match up to the expectations and global standards. The winner, however, will be the customer who will benefit from hassle-free sample collection experience, faster turnaround of test results, higher accuracy of the tests and competitive pricing.