In the context of the sustained development of the medical and health industry, the in vitro diagnostics (IVD) industry, as a key part of it, is undergoing profound changes. In 2025, IVD enterprises are facing many severe challenges, as well as significant opportunities to accelerate the promotion of domestic substitution.

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Current situation of IVD industry

The IVD industry is a relatively large segment in the global medical device field. In 2023, the IVD market size will reach 106.3 billion US dollars, while the domestic IVD market size will reach 118.5 billion yuan, accounting for about 16% of the domestic and foreign markets. From the downstream perspective, the cumulative size of the domestic IVD market is about 170 billion yuan (terminal price), covering areas such as in-hospital, third-party laboratory ICL, and real-time testing. The IVD market presents a competitive pattern of "4+X", while in the domestic market, domestic substitution has been basically achieved in the mid to low end fields, but the upper end fields are still dominated by foreign-funded enterprises.

Challenges faced by IVD enterprises

1. The impact at the policy level

(1) Cost control and payment reform: The implementation of DRG/DIP payment reform nationwide has made hospital laboratory departments increasingly strict in cost control. In order to control costs, hospitals have not only reduced non essential testing items, but even split some testing items. In addition, the continuous promotion of mutual recognition of inspection results has also reduced the demand for repeated testing of some inspection items by medical institutions, further compressing the stock market size of IVD enterprises.

(2) Pressure from centralized procurement policy: The centralized procurement policy in the IVD industry has been implemented, which has significantly squeezed the profit margins of enterprises. The traditional segmented market represented by biochemical diagnosis, due to mature technology, high localization rate, and numerous enterprises, is fiercely competitive in the market, and price wars are rampant. In addition, with the impact of the centralized procurement policy, although top enterprises can maintain market share, their profit margins are very limited. Of particular note is that the 28 province IVD centralized procurement led by Anhui Province is expected to be implemented gradually in the second half of this year. This centralized procurement involves two major categories in the chemiluminescence reagent market, namely cancer biomarkers and thyroid function, and covers most of the market. This undoubtedly brings uncertainty to the revenue growth rate of related enterprises.

(3) Extended hospital payment cycle: Some IVD companies are also facing the problem of extended hospital payment cycles. Long term high accounts receivable and a large amount of funds being occupied not only affect the company's cash flow, but may also lead to significant credit impairment losses, seriously weakening the company's R&D investment capability.

Technical bottlenecks and competition

There is still a significant gap between domestic products and imported giants in terms of equipment or components in fields such as molecular diagnostics, mass spectrometers, POCT, etc. While device applications are gradually becoming popular, some key raw materials rely on imports. For example, more than 70% of the core optical components of magnetic particle chemiluminescence equipment in China rely on imports, and 90% of the key enzyme raw materials in nucleic acid extraction reagents come from European and American suppliers. This technological dependence limits the development of domestic IVD enterprises and puts them at a disadvantage when facing competition.

The trend and opportunities of domestic substitution

Despite facing many challenges, 2025 also provides a good opportunity for the accelerated development of domestic substitution for IVD enterprises.

1. Policy support for domestic substitution

Local governments have successively introduced policies to support the development of domestic production. For example, a 30% subsidy is given for the procurement of domestic equipment, and the industry is also revising the compatibility standards for IVD equipment and establishing performance verification guidelines that are more in line with national conditions, which will greatly shorten the cycle of domestic substitution. In addition, the centralized procurement policy of chemiluminescence in Anhui and other places has further promoted the process of domestic substitution, and some domestic brands have already surpassed imported brands in some testing projects.

2. Breakthrough in Enterprise Technological Innovation

In recent years, domestic IVD enterprises have achieved significant results in technological innovation. The "shell structured magnetic bead" technology jointly developed by New Industry Biology and the Chinese Academy of Sciences is expected to significantly increase the domestic substitution rate of magnetic particle chemiluminescence products, reaching an estimated 80%. Technological breakthroughs not only reduce dependence on foreign technology, but also provide greater development space for domestic enterprises.

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For IVD enterprises in 2025, challenges and opportunities coexist. Under the pressure of market demand structure adjustment, policy influence, and technological competition, IVD enterprises need to actively respond and seize the opportunity of domestic substitution acceleration through strategies such as technological innovation, supply chain optimization, market expansion, and deep cultivation of segmented tracks. As an IVD raw material supplier, Hubei Xindesheng Company can provide biological buffering agents, color reagents, luminescent reagents, enzyme preparations and other raw materials. With stable product performance and timely supply capacity, it has become a long-term partner of many IVD reagent production enterprises. If you are interested, please feel free to contact us!