LATERAL FLOW ASSAY MARKET ANALYSIS

Stringent regulations for product approval ca hamper the global lateral flow assay market growth. Lateral flow assays are diagnostic tests used for clinical testing and medical diagnosis. These assays, being diagnostic devices, use biological samples such as blood, urine or saliva and hence regulatory approval for these assays is crucial. However, approval process has become extremely lengthy and complex in recent years. Regulatory bodies across the world like U.S. FDA and EU Notified Bodies have increased clinical trial requirements, improved review timeline and raised quality standards for approving lateral flow assays due to the COVID-19 pandemic. Factors like type of sample, claimed analyte, output format, and others also determine the level of clinical evaluation and documentation required, which further increases approval time. For example, U.S. FDA has been insisting on large sample clinical evaluations involving 700-1,000 patient samples for COVID-19 antigen and antibody lateral flow assays before granting Emergency Use Authorization, which has delayed their approval timeline significantly. This has demotivated many small diagnostic companies from innovating and launching new lateral flow assays. According to the World Health Organization Report in 2022, 59% of the 300 diagnostic companies surveyed stated that stringent regulations were the top challenge for commercializing their lateral flow-based point-of-care tests for diseases like TB, HIV and malaria. Many abandoned projects during clinical trials phase itself owing to regulatory uncertainty.

Market Opportunities: Outsourcing of Lateral Flow Assay Production

Outsourcing of lateral flow assay production can provide significant opportunities for growth of the global lateral flow assay market. As the demand for rapid, affordable COVID-19 and other infectious disease testing surged in recent years, the capacity of many medical device companies to produce lateral flow assays internally has been outpaced. By outsourcing non-core production functions to specialist contract manufacturers, medical device firms can maximize their production capacity and better meet rising global demand. This allows medical device companies to focus on their expertise in product development while leveraging the economies of scale of large-scale contract manufacturers. For example, contract manufacturers with dedicated lateral flow assay facilities can rapidly expand production lines and hire additional staff to accommodate quick ramp-ups when new outbreaks emerge. The contract manufacturers are also able to reduce costs through optimized automation, supply chain management, and their increased production volumes across multiple clients' products. These cost savings can be passed on to the medical device companies and healthcare systems, improving the accessibility of lateral flow technologies. As reliance on rapid at-home and point-of-care testing increases, outsourced production will be crucial to ensure a steady supply of affordable tests for infectious diseases globally. The COVID-19 pandemic underscored the need for scalable diagnostic manufacturing capacity.