Increasing Access To Diagnostics Through Technology Transfer and Local Production

Intellectual R&D, Technology Monitoring and
Property and Trade Innovation Improving Access Financing Reporting

Transfer
Through Technology Transfer and
Increasing Access to Diagnostics
Local Production
Increasing Access to Diagnostics
Through Technology Transfer and
Local Production
Prepared for the WHO Department of Public Health, Innovation and Intellectual Property by
Rosanna Peeling and Ruth McNerney (London School of Hygiene & Tropical Medicine).
This report forms part of the project entitled: Improving access to medicines in developing
countries through technology transfer related to medical products and local production. It is
implemented by the Department of Public Health Innovation and Intellectual Property of the
World Health Organization (WHO/PHI) in partnership with the United Nations Conference on
Trade and Development (UNCTAD) and the International Centre for Trade and Sustainable
Development (ICTSD) with funding from the European Union (EU). The overall objective of the
project is to increase access – especially for the poor in developing and least developed countries
– to medicines, vaccines and diagnostics.
All reports associated with this project are available for free download from the following website:
http://www.who.int/phi/en/
This publication has been produced with the assistance of the European Union. The contents of
this publication are the sole responsibility of the World Health Organization and can in no way be
taken to reflect the views of the European Union.
Editing and design by Inís Communication – www.iniscommunication.com
WHO Library Cataloguing-in-Publication Data
Increasing access to diagnostics through technology transfer and local production.
1. Diagnostic tests, Routine. 2.Technology transfer. 3.Developing countries. I.World Health Organization.
ISBN 978 92 4 150237 5 (NLM classification: WB 141)
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ii
Contents
Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. Background and context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. Objectives and methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. The diagnostics landscape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. Opportunities and absorptive capacity for R&D and manufacturing of

IVDs in the developing world . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5. Technology transfer to developing countries . . . . . . . . . . . . . . . . . 37
6. Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7. Measures to facilitate technology transfer and local manufacture . . . . . 50
8. Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Annex I: Workshop attendees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
iii
iv
Abbreviations
AHWP Asia Harmonization Working Party
ANDI African Network for Drugs and Diagnostics Innovation
ANVISA National Health Surveillance Agency
ASEAN Association of South-East Asian Nations
CAGR compound annual growth rate
CE Conformité européenne
DALY disability-adjusted life-year
DPP Dual Path Platform
ELISA enzyme-linked immunosorbent assay
EU European Union
FDA United States Food and Drug Administration
FIND Foundation for Innovative New Diagnostics
Fiocruz Oswaldo Cruz Foundation
GDP gross domestic product
GHTF Global Harmonization Task Force
GLP good laboratory practice
GMP good manufacturing practice
GSPA-PHI Global Strategy and Plan of Action on Public Health, Innovation
and Intellectual Property
HCG human chorionic gonadotrophin
HIV human immunodeficiency virus
IFPMA International Federation of Pharmaceutical Manufacturers and
Associations
IMCI Integrated Management of Childhood Illness
ISO International Organization for Standardization
IVD in vitro diagnostic
JICA Japanese International Cooperation Agency
KEMRI Kenyan Medical Research Institute
LMIC low- and middle-income country
MGIT mycobacteria growth indicator tube
NDI Asian Network for Drugs and Diagnostics Innovation
NGO nongovernmental organization
OECD Organisation for Economic Co-operation and Development
PATH Program for Appropriate Technology in Health
v
PCR polymerase chain reaction
PEPFAR United States President’s Emergency Plan for AIDS Relief
PPP public-private partnerships
R&D research and development
TB tuberculosis
TDR Special Programme for Research and Training in Tropical Diseases
UNAIDS United Nations Programme on HIV/AIDS
UNICEF United Nations Children’s Fund
WHO World Health Organization
vi
Executive summary
This report presents an overview of in vitro diagnostic (IVD) device technology
transfer and local production of diagnostic tests for developing countries.
The report identifies needs and analyses trends in the local production of
diagnostics and related technology transfer. A series of recommendations are
made. The objective is to assist the World Health Organization (WHO) in its
support for Member States in implementing the global strategy and plan of
action on public health innovation and intellectual property, with particular
reference to the promotion of capacity building for local production in
developing countries.
High-quality diagnostic technologies are available for infectious diseases

in most developed countries, but they are neither accessible nor affordable
in developing countries, where disease burdens are high. Evidence-based
treatment using diagnostic test results is needed to replace syndromic
management, which is often ineffective and increases the risk of development
of antibiotic resistance. Although the long-term solution is to build capacity for
diagnostic innovation in developing countries, technology transfer and local
production can be an effective and sustainable strategy by which to increase
access to diagnostic tests. This report examines current models of technology
transfer and local production, identifies successes, failures, challenges and
opportunities, and presents recommendations with a view to developing
better models for the future. The main findings are:
1. Developing countries have variable capacity for diagnostic research and

development (R&D) and local production of diagnostics. Manufacture in
the non-industrialized world is most often undertaken in countries with
large domestic markets and emerging economies such as China, India
and Brazil.
2. There are several models by which technology transfer for local pro-
duction can be accomplished. These range from the transfer of R&D
know-how to enable local product development to merely partnering
with a company in the developing world to manufacture a product, with-
out increasing local capacity for R&D.
3. Successful partnerships have involved small and medium-sized compa-

nies, multinational companies, non-profit-making organizations and the
public sector. The most successful example to date includes the transfer
of a novel technology from an IVD company registered in the developed
world to a non-profit-making public institution in the developing world.
The agreement not only permits local production of tests based on this
technology but also allows further R&D using the novel technology to
produce tests for diseases prevalent in the developing country.
4. In spite of these successes, many obstacles to technology transfer and

local production remain. They include:
1
• lack of financial investment for development of diagnostics, a situation
compounded by a lack of market knowledge, where analysis to map out
market size and demand, desired product specification and pricing is badly
needed;
• lack of commitment of developing country governments to purchase locally
produced goods;
• unclear means to enforce intellectual property rights;
• lack of clear pathway and mechanisms for taking R&D products to market;
• restricted freedom to operate, where non-profit-making manufacturers are
not permitted to engage with the commercial sector;
• lack of local expertise in quality-assured manufacture, packaging or
distribution;
• lack of transparency and clarity of standards in regulatory approval
mechanisms and lengthy approval processes, a situation compounded by
the lack of regional harmonization;
• lack of quality standards in diagnostic test evaluation and lack of access to
quality control/quality assurance materials, allowing proliferation of poor
quality tests;
• rationalization of companies following mergers and acquisitions;
• need for prequalification/evaluation of products before entering the
market;
• competition from established suppliers offering cheap imports, a wider
range of goods or inducements to secure contracts;
• local markets that are unable support manufacture on a scale that is cost
efficient.
5. Opportunities to increase technology transfer include:
• increased political will and recognition of the value of diagnostics at a

national and international level;
• increased funding and networking initiatives through product development
partnerships; however, these remain focused largely on research rather
than on building capacity for manufacturing, and access to finance remains
the foremost challenge for test developers;
• interest in personalized medicine by pharmaceutical companies and
emergence of new point-of-care technology suited to resource-poor
environments;
• vibrant biotechnology sector in some developing countries that can act as
hubs for regional initiatives.
Based on the findings above, a number of steps must be taken to promote,

support and develop initiatives and mechanisms for enhancing technology
transfer and local production of diagnostics (Table 1).
2
Table 1 Recommendations for enhanced technology transfer and local
production of diagnostic technology
Promote Support Develop
Advocate the importance Provide guidance Develop new business
and value of diagnostics on required test models and approaches
to the pharmaceutical specifications for to financing and
industry, and national developing countries for marketing of diagnostics
and international test developers
stakeholders
Analyse the developing Provide critical pathway Explore novel initiatives
world market and provide for successful technology by which to share and
data to test developers, transfer and examples of exploit intellectual
potential investors and best practice property
local stakeholders
Enhance capacity within Provide advice and Establish a global
developing countries to training on protecting association for
adopt new diagnostic intellectual property. manufacturers of
and manufacturing Collate and distribute diagnostic tests
technology information on patents
and where they apply
Recognize excellence in Support training to Establish a global
diagnostic expertise and enhance capacity for diagnostics forum for
establish a professional GLP/ISO manufacturing information sharing,
career pathway in in developing countries enable debate and
diagnostics R&D encourage collaboration
and harmonization
Support capacity Develop a health
building to increase the technology assessment
number of stringent model for countries to
regulatory authorities in determine whether new
developing countries technologies address
their public health needs
GLP, good laboratory practice; ISO, International Organization for Standardization.
3
1. Background and context
In May 2008 and 2009 the World Health Assembly adopted Resolutions
WHA61.21 and WHA62.16 on the Global Strategy and Plan of Action on Public
Health, Innovation and Intellectual Property (GSPA-PHI). This is a landmark
agreement, as it aims to improve treatment for poverty-related and neglected
diseases disproportionately affecting developing countries by stimulating
innovation to find new products for these diseases, and by improving
availability, affordability, access and acceptability of existing products.
The plan incorporates eight elements:

1. Prioritize research and development (R&D) needs.
2. Promote R&D.
3. Build and improve innovative capacity.
4. Transfer of technology.
5. Application and management of intellectual property to contribute to
innovation and promote public health.
6. Improve delivery and access.
7. Promote sustainable financing mechanisms.
8. Establish and monitor reporting systems.
Among other areas, the global strategy highlights the need to build and
improve innovative capacity in developing countries (element 3) and to
facilitate the transfer of health-related technology (element 4), including
pharmaceuticals, vaccines and diagnostics. Technology transfer is the sharing
of knowledge from those that know with those that do not. It is shaped by the
environment with respect to local capacity, ownership of intellectual property,
availability of finance and other factors.
This report makes a number of recommendations. These are focused mainly

on the role that the World Health Organization (WHO) can take, working in
partnership with others, in terms of implementing the GSPA-PHI with respect
to the transfer of technology and local production of diagnostics in developing
countries.
In vitro diagnostic (IVD) devices are tests that can detect diseases, conditions
or infections. They are used at all levels of the health-care system and range
in complexity from sophisticated computer-controlled analytical systems
to simple dipstick technologies. IVD devices inform decisions regarding
appropriate care and management of patients. For many conditions, including
human immunodeficiency virus (HIV) infection, access to treatment is
dependent on prior access to the appropriate diagnostic test.
To be useful, diagnostic tests must be accurate, simple and affordable for the
population for which they are intended. They must also provide a result in time
to institute effective treatment. Early diagnosis and treatment of an infection
4
may have an important role in interrupting transmission of the infection agent.
In a broader context, diagnostic tests may be useful for:
• patient management, especially when clinical presentation is nonspecific;
• detection of asymptomatic infections;
• surveillance;
• situation analysis, including detection of previous infections;
• evaluation of effectiveness of interventions, including certification of
elimination;
• detection of drug resistance, by detecting treatment failures.
High-quality tests for infectious diseases are readily available in most

developed countries; however, the situation is very different in developing
countries, where the cost of imported IVD technology is frequently too
high for the public sector. As a result, diagnostic tests are not affordable by
those vulnerable populations with the highest burden of disease. IVDs that
are available in the poorest countries are often the result of a dependency
on international donors engaged in disease-specific initiatives. There is a
strategic tension between societal needs and corporate perspectives on the
supply of diagnostic devices. The perceived lack of a commercial market for
diagnostics for neglected diseases has contributed to the lack of available
tests in developing countries. There are also tensions between affordability
and access and sustained local production, where imported tests may have a
lower economic cost due to donations or special procurement arrangements,
discouraging local investments in the development and manufacture of
such products. The failure of traditional market-led business models to
provide diagnostic tools for developing countries had led to recognition that
alternative means of production should be considered.
Transfer of health-related technologies has been credited with the potential

to build health security, increase reliability of supply, decrease reliance on
imports, lead to lower prices, and encourage development and production
that is more suitable for local health needs. Thus, implementation of the
global strategy regarding innovation and local production may contribute to
a sustainable and long-term solution to the persistent challenge of access to
health care for the most vulnerable populations. Implementation of GSPA-PHI
has led to a number of initiatives, including the consideration of issues relating
to technology transfer and the manufacture of diagnostic tests in developing
countries. WHO, in partnership with the London School of Hygiene & Tropical
Medicine, and with funding by the European Union (EU), undertook a project
relating to technology transfer and local production to inform future initiatives
for the improved access to diagnostics in the developing world. This report
is the result of that project. It encompasses an overview and analysis of the
current landscape of R&D and production of IVDs for developing countries.
It reviews opportunities and makes recommendations for more effective
technology transfer and local production of diagnostics to improve access to
diagnostic tests in developing countries.
5
2. Objectives and methodology
Technology transfer is the sharing of knowledge from those who own the
know-how to those who do not. It is shaped by many factors, including the
capacity of recipient countries to absorb the knowledge and translate the
know-how into the manufacture of a diagnostic test. Technology transfer
and local production are often motivated by cheaper production costs and
easier penetration into emerging markets. In this report, the term “developing
countries” includes the emerging economies of China, India and Brazil, and
all other countries classified as low- or middle-income according to the
World Bank statistics. It is acknowledged that this gives a very broad range of
countries with very different country profiles and requirements.
2.1 Project objectives

1. Conduct a survey of technology transfer and local production of diagnos-
tics for developing countries.
2. Analyse the global trend of technology transfer and local production

for diagnostics in the context of improved access to diagnostic tools for
infectious diseases with specific country examples.
3. Conduct stakeholder interviews and focus group discussions on access of

diagnostics in developing countries.
4. Collate and synthesize all data into a summary technical report with spe-
cific recommendations on the way forward.
2.2 Project activities

1. Assessment of the global diagnostics market and its relevance to devel-
oping countries.
2. Survey of technology transfer and local production of diagnostics in

developing countries.
3. Assessment of opportunities and barriers to technology transfer and local

production of diagnostics.
4. Stakeholder consultation with regard to technology transfer and access to

diagnostics by vulnerable populations.
5. Compilation of evidence and stakeholder opinion on technology transfer

and local production.
6. Generation of recommendations for improved access to diagnostic tests

through technology transfer for local innovation and production.
6
2.3 Methodology
Evidence was gathered and collated through a combination of desk research
and interviews. Stakeholders consulted included public health officials,
procurement officers, regulatory officers, public- and private-sector test
developers, test evaluators, patient representatives, clinical personal, diagnostic
laboratory personnel, economists, health policy experts and representatives of
manufacturers’ associations. Countries represented included Brazil, Cameroon,
China, Germany, Ghana, India, Italy, the Netherlands, Nigeria, South Africa,
Thailand, Uganda, the United Kingdom of Great Britain and Northern Ireland,
the United Republic of Tanzania, the United States of America and Zambia.
A workshop, Dialogue on Technology Transfer for Local Manufacturing

Capacity of Diagnostics, was held in Dionne les Bains, France in October 2010.
Over 30 experts participated in discussions on technology transfer for IVD for
developing countries. (See Annex I for a list of attendees.)
Case studies were undertaken to illustrate the challenges and to exemplify

strategies for technology transfer and local production. Successful and
unsuccessful initiatives are presented to illustrate the opportunities and
obstacles for sustainable local production.
3. The diagnostics landscape

In vitro diagnostic devices are tests that can detect diseases, conditions or
infections. They are used at all levels of the health-care system and range
from self-test devices for use in the home to sophisticated high-throughput
computer-controlled analysers. Commercial kits are available for many but
not all infectious diseases. In addition to purchasing ready-made devices,
laboratories can also assemble and use their own in-house tests. IVD devices
differ from other medical products such as drugs and vaccines in a number of
ways; perhaps one of the most significant is the lack of a stringent regulatory
control regarding their effectiveness.
3.1 In vitro diagnostics commercial market

The field of diagnostics is very different from that of pharmaceuticals and
vaccines. It has a much smaller market than drugs. Diagnostics and diagnostics
research are often undervalued. The Lewin Report on the Value of Diagnostics
noted that although diagnostics comprise less than 5% of hospital costs and
about 1.6% of all United States Medicare costs, their findings influence 60–70%
of health-care decision-making (Lewin Group, 2005). In the developing world,
diagnostics is often a negligible proportion of health-care spending. A WHO
study in Malawi showed that only 6% of health expenditures at a district
hospital is spent on diagnosis (WHO, 2003).
The magnitude of the global IVD market and predictions regarding future
trends are the subject of commercial speculation. Estimates of market value
7
vary according to the evidence used to compile the information, and it is not
always possible to identify the source or verify the accuracy of data published
by commercial organisations. Nonetheless there is general agreement that
the market is expanding and that there are commercial opportunities in
the emerging economies of Asia and Latin America. Economic and political
pressure to minimize health-care expenditure is driving demand for high-
throughput automated diagnostic platforms placed in large centralized
laboratory services. A second area of expansion is in simple rapid devices that
can be used close to the patient in primary health clinics and hospital wards,
reducing the need for referral to laboratory-based services (Peeling & Mabey,
2010). A new model of commercial health management is emerging, with
multinational companies providing complete diagnostic service packages
to both public- and private-sector clinics and hospitals. These companies
have enormous bulk procurement contracts with IVD companies and can
have significant influence on market trends. This innovation is not confined
to industrialized countries. Transnational health-care delivery companies are
expanding to countries such as Brazil, India and South Africa.
Another feature of the diagnostics market that is different from medicine

and vaccines is the short lifespan of products. Improved devices and new
replacement technologies are frequently introduced. This is illustrated by the
introduction of new molecular technologies for screening for drug-resistant
tuberculosis (TB), which are replacing the slow, cumbersome, culture-based
tests that require stringent microbiological safety precautions. Data from the
South African National Health Laboratory Service (NHLS) are shown in Table
2 and Figure 1 (Erasmus et al., 2010). The mycobacteria growth indicator tube
(MGIT) culture-based system was used before the introduction of a new
molecular test, the line probe assay, in 2006–2007. With the implementation
of the more rapid molecular test, there was a subsequent drop in the use of
culture-based tests. A new technology, the Xpert MTB/RIF (Cepheid, Sunnyvale,
CA, United States) test, also a molecular test, is now set to replace the Line
Probe Assay. The Xpert test is much simpler to perform than the line probe
assay and South Africa is planning to purchase a number of instruments to
allow rapid diagnosis and screening for drug resistance in diagnostic centres,
where use of the line probe assay will then be restricted to confirmatory
testing of people found positive for resistance by the Xpert test.
8
Table 2 Number of Mycobacterium tuberculosis drug susceptibility tests
performed by a newly introduced method and the traditional method at NHLS,
South Africa, by year
Year Molecular test Culture-based test
(line probe assay) (MGIT)
2004 – 34 564
2005 1 36 903
2006 5 48 183
2007 5963 65 809
2008 23 128 60 147
2009 61 575 40 204
2010a 65 190 22 840
Projected number of tests (full data not available).

a
Figure 1 Number of Mycobacterium tuberculosis drug susceptibility tests

performed at NHLS, South Africa, by year
70 000
60 000
50 000
40 000
30 000
20 000
10 000
0
2004 2005 2006 2007 2008 2009 2010
Molecular test (line probe assay)

Culture-based test (MGIT)
According to a report produced by Global Business Intelligence (GBI)

Research,1 the global market for IVD during 2009 was estimated to be worth
US$ 37 billion (GBI Research, 2010). The market is not distributed evenly and,
not surprisingly, is dominated by wealthy countries. Increased expenditure
on health in emerging economies such as Brazil, China and India and an
anticipated increase in demand for health care from ageing populations is
fuelling growth of the IVD market. The market data available for developing
countries are limited in scope, but estimates for China, Brazil and India suggest
revenues during 2009Others
were US$ 1523 million, US$ 674 million and US$ 402
United States
1 GBI Research is an international organization that provides in-depth reports on a broad

range of industries to the business community. See http://www.gbiresearch.com/.
South Africa
Mexico
Republic of Korea 9
India
Canada
70 000 Culture-based test (MGIT)
60 000
50 000
40 000
30 000
million, respectively,
20 000 whereas South Africa has an estimated market value of
US$ 64 million (Figures 2 and 3; GBI Research, 2010).
10 000
0
2004 2005 2006 2007 2008 2009 2010
Figure 2 Estimated share of global IVD markets for selected countries, by revenue
Molecular test (line probe assay)
Culture-based test (MGIT)
Others
United States
South Africa
Mexico
Republic of Korea Others
India
Canada
Brazil United States
United Kindom
China
South Africa
Mexico Germany Japan
Republic of Korea
India
Canada
Brazil
Source: Data from GBIUnitedResearch
Kindom(2010).
China
Figure 3 Estimated share of global
100 000.00
IVD markets
Germany Japan for selected countries, by
revenue (US$)
10 000.00
1 000.00
100 000.00
100.00
10 000.00
1 000.00
10.00
100.00
1.00
10.00
ia
ut co
ca
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Ge aGne an
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do
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ite
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Estimated IVD revenues in 2009 ($ millions)

Estimated IVD revenues in 2009 ($ millions)
Histology
Source: Data from GBI Research andcytology
(2010).
Histology and Genetic
cytologyGenetic testingtesting
Microbiology culture
The relative values of the various IVD product groups are presented in Figure
Clinical chemistry
4. It can be seen that although 50% of disease in developing Clinical chemistry
countries is
Infectious immunology
attributable to communicable diseases, the infectious immunology and
microbiological culture sectors when combined represent less than 20%
of the global diagnostics market. As illustrated in Figure 5, most revenue
attributed to immunological tests for infectious disease is for the detection
Haematology
Haematology 10
Immunochemistry
1 000.00
10.00
100.00
1.00
10.00
of ia ic of ia
ut co ut ico
ca
es
Ge an G pan
Ki a d Ki a
om
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da
a
an
az
in
re
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at
f ri
na
So exi So ex
ite hi ite h
bl Ind ubl In
Ko
nd
Br
m
a
St
hA
C
J
of viral infections.
1.00 Bacteriology represents the main culture activity (Figure 6);
M
er
d
te
culture of mycobacteria, including TB, had an estimated global value of US$
i
Un
Un
ca
es
om
l
Reda
a
p
i
574.6 million during 2009.
an
az
n
re
at
f ri
p
na
Ko
nd
Br
rm
Ja
St
hA
C
Ca
M
d
te
d
Estimated IVD revenues
categoryin 2009 ($ millions)
ic
Figure 4 Global IVD revenue,
Un
i by diagnostic
Un
pu
Re
Estimated
Histology and cytology Genetic testing
IVD revenues in 2009 ($ millions)
Histology and cytology Genetic testing Clinical chemistry
Clinical chemistry
Haematology
Haematology Immunochemistry
Source: Data from GBI Research (2010).

Immunochemistry
Other virology
Figure 5 Immunological tests sold for infectious diseases
Hepatitis viruses
Other virology
Hepatitis viruses
Bacteriology
Bacteriology
Retroviruses
Retroviruses
Mycology culture
Parasitology
Source: Data from GBI Research culture
(2010).
Microbiology analysers
Immunological culture Mycology culture
identification
Parasitology culture
Immunological culture
identification
Bacterial identification
and susceptibility testing
Bacterial identification 11
Blood culture
Retroviruses
Figure 6 Culture activity within the commercial sector
Mycology culture
Parasitology culture
Immunological culture
identification
Bacterial identification
Blood culture
Mycobacteria culture
25
3.2 Developing country market structure
20
In developing countries, health care is sought from many sources: the public
US$ million
15
(government) sector, private practitioners, nongovernmental organizations
(NGOs) and 10traditional healers (Case & Menendez, 2005; Uzochukwu &
Onwujekwe, 52004). There is cross-referral of patients for diagnostic services,
with some commissioning
0 of private laboratories by the public sector and
some use of the public sector by private practitioners and NGOs. Disparities in
y
gy
re
ry
ry
ng
y
og
og
ltu
ist
ist
lo
sti
access between rural and urban populations are frequent: the level and quality
ol
ol
to
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m
cu
te
un
at
cy
he
he
gy
tic
em
of care experienced by these populations can vary widely, from primitive

oc
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lo
im
ne
an
ica
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un
io
Ge
us
gy
ob
in
clinical outposts to large centralized laboratories. Also, reduced access may

io
Cl
lo
Im
icr
ct
sto
M
fe
be experienced by women and other vulnerable groups due to economic

Hi
In
or social disadvantage. For patients not covered by insurance schemes,

diagnostic tests are rarely free at the point of delivery and often come with
significant fees. In countries such as South Africa and Brazil the public sector
is the major provider of primary health-care services, but in other settings
diagnosis is more frequently sought from F.the nongovernmental
Hoffmann–La Roche Ltd sector. The
pattern of health-seeking behaviour varies within countries and is influenced
by the accessibility and perceived quality of local services (Sudha et al., 2003).
Examples of diagnostic services in developing countries are given in Table 3.
Others, including small
Emerginglocal
economies
companies such as Brazil, India and South Africa provide established
Siemens Medical
and growing markets for the private health sector, and Solutions
multinational
companies have established a presence in these countries through
partnership or by acquisition of local diagnostic companies. In emerging
economies such as China and Brazil, the burden of diseaseAbbott is changing
Laboratories where
rising living standards and an ageing population are resulting in increased
demandInverness
for diagnosis andInc.management of chronic
Medical Innovations, diseases
Beckman Coulter, Inc.and cancers
Bio-Rad Laboratories, Inc.
(MarketsandMarkets, 2010). Revenue from commercial BioMerieux SA IVD products in these
Becton, Dickinson Ortho-Clinical
countries has a similar distribution and Company Diagnostics Inc.global market. A breakdown
to that in the
of the diagnostic market in South Africa is presented in Figure 7.
12
Blood culture
Figure 7 Estimated revenue from sales of IVD in South Africa, 2009
25
20
US$ million
15
10
5
0
gy
gy
re
ry
ry
ng
y
og
ltu
ist
ist
lo
lo
sti
ol
no
to
m
m
cu
te
at
cy
he
he
gy
tic
em
m
oc
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lo
im
ne
an
ica
Ha
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io
Ge
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gy
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ct
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In less developed countries, private diagnostic laboratories have been

established in response to the low level of F.service available
Hoffmann–La Roche Ltd from the public
sector and to reduce the need to travel abroad for medical care. In addition
to procurement from commercial agencies, developing countries may also
access IVD at preferential prices or through international initiatives such as
UNITAID, the Global Fund to Fight AIDS, TB and Malaria, or the United States
President’s Emergency Plan for AIDS Relief (PEPFAR). However, these initiatives
local companies
Siemens Medical
are frequently restricted to specific disease-control programmes such as those
Solutions
for HIV, TB and malaria, and countries that they support. A further concern is
that these short-term funding mechanisms cannot be considered sustainable.
Abbott Laboratories
Table 3 Examples of diagnostic services in developing countries
Country Diagnostic
Inverness Medical service
Innovations, Inc. provision Beckman Coulter, Inc.
Bio-Rad Laboratories, Inc. BioMerieux SA
Brazil There are mixedBecton,
public and private
Dickinson services, with an estimate of
Ortho-Clinical
nearly 8000 clinical andlaboratories.
Company Diagnostics
Brazil Inc.
has universal health care and
the public unified health system coexists with the private health-
care system. The public sector is estimated to purchase 60% of the
IVD market. There are 400 million diagnostic tests annually in the
public sectors. Chains of private laboratories and some large referral
centres provide high-throughput screening in urban centres. The
Immunobiological Technology Institute (Bio-Manguinhos) was
established in 1976 as the technical-scientific unit of the Oswaldo
Cruz Foundation (Fiocruz), which produces and develops vaccines
and immunobiological products to respondF. Hoffmann–La Rochehealth
to public Ltd
Others
demands in Brazil and in the region. It currently produces more than
3 million reagents for diagnostics tests each year.
Continues…
Gen-Probe Incorporated
BioMerieux SA
Abbott Laboratories
13
DiaSorin S.p.A Becton, Dickinson
and Company
Qiagen N.V.
Beckman Coulter, Inc.
Continued from previous page
Country Diagnostic service provision
South There are mixed public and private laboratories. The major provider
Africa is NHLS, a non-profit-making organization with a national network
of 265 pathology laboratories. This provides laboratory diagnostic
services (e.g. surveillance studies) to the Department of Health,
provincial and district hospitals, primary health-care clinics
and other state institutions (e.g. prisons). It also offers a referral
diagnostic service to private-sector health-care providers. It is the
main purchaser of commercial IVDs but it also uses in-house tests,
including some nucleic acid amplification tests.
Private laboratories provide a service to the private health clinics and

hospitals and for occupational health screening such as in the mining
industry.
India There are mixed public and private laboratories. Estimates suggest
over 1 million patients per day are tested in approximately 30 000
laboratories. The nongovernmental sector is playing an increasing
role, with the establishment of public–private partnerships. In some
urban slums an estimated 70% of outpatients attend private clinics.
Zambia The Ministry of Health is the major provider. It is heavily dependent
on donor funding, and shortages of trained personnel and reagents
are common. There are private laboratories in the capital Lusaka
and serving the mining industry in the copper belt. NGOs provide
diagnostics for HIV and in some cases TB or malaria. Recent
deterioration of services was experienced following suspension of
donor funds because of corruption.
China There are mixed public and private laboratories. The central
Government is in the process of introducing a basic health insurance
scheme, but in the meantime clinics and hospitals depend on fees
charged to patients for physician time, diagnostic services and
drugs to stay in business. China has prioritized HIV, TB, hepatitis B
and schistosomiasis as top infectious disease priorities in health and
diagnostic services, and drugs for these diseases should be available
free of charge at Government clinics. However, many people attend
private clinics and hospitals in preference to public facilities and
pay out of pocket if they do not have health insurance through
their employer.
3.3 Demand-side priorities and gaps

Global health priorities have been established through the Millennium
Development Goals. Detection of communicable diseases remains a priority,
not only to reduce individual morbidity and mortality but also – in the case of
sexually transmitted infections and respiratory infections – to prevent onward
transmission. Whereas in some countries health care for HIV, TB and malaria is
funded by the Global Fund to Fight AIDS, TB and Malaria, diagnostics for other
diseases remain woefully underfunded (Mabey et al., 2004). The majority of
populations living in least developed countries have limited or poor access
to diagnostic services. This may be due to the cost or because they live a long
distance from health-care facilities. Lack of access is partly due to inadequate
service provision, where tests that are theoretically available are not delivered
14
because of poorly functioning health-care systems. There may also be a lack of
availability, either because the tests are not imported or because appropriate
tests for the disease do not exist. Similarly some vulnerable populations do not
seek diagnostic services because of issues such as stigma or social exclusion.
The following factors have been identified as factors contributing to poor

access to diagnosis:
• Access issues:
–– lack of laboratory facilities;
–– lack of trained personnel;
–– long distance to nearest laboratory;
–– high cost to patient of seeking medical care;
–– poor awareness of the population of disease symptoms and
of the diagnostic opportunities, leading to low health-seeking
behaviour;
–– tests not available due to lack of investment in R&D of new
diagnostics.
• Quality issues:
–– poor-quality tests;
–– test robustness in varying environmental conditions;
–– difficulties in repairing equipment;
–– tests not appropriate for population and unclear product guide-
lines/specifications for specific disease and population.
• Implementation issues:
–– poor implementation of diagnostics into health-care system;
–– supply chain problems (stockouts, customs duties, distribution
networks);
–– lack of human resources and appropriate training.
In the absence of diagnostic services, WHO promotes the use of a syndromic

approach to management of infectious diseases where presumptive treatment
is given for all major causes of the syndrome. For example, before 2009, the
Integrated Management of Childhood Illness (IMCI) guidelines, developed by
WHO and the United Nations Children’s Fund (UNICEF), recommended that
presumptive treatment for malaria be given to all children presenting with
fever in a malaria-endemic area. This approach has low specificity and increases
the risk of development of drug resistance. The emergence of chloroquine
resistance resulted in the use of rapid tests for malaria. These diagnostic tests
demonstrated that malaria is not as common as previously thought and
that children given presumptive treatment for malaria often die of bacterial
or viral infections that were never diagnosed. The need for evidence-based
management of infectious diseases, particularly in resource-poor settings,
drives current investments in point-of-care diagnostics to improve global
health (Table 4).
15
Table 4 Estimated potential impact of rapid point-of-care tests
Disease Population Sensitivity/ Potential impact
specificity (%)
Acute lower Children 95/85 Saves about 405 000 lives
respiratory under 5
infection years
HIV Infants under 90/90 Saves 2.5 million DALYs if 100%
12 months access to treatment
Malaria Children 90/90 Saves 2.2 million DALYs and
under 5 prevents 447 million unnecessary
years treatments
TB Symptomatic 85/97 Saves about 400 000 lives
Syphilis Prenatal 86/72 Saves 201 000 DALYs and averts
215 000 stillbirths
Chlamydia Sex workers 85/90 Saves about 4 million DALYs,
and averts 16.5 million new cases and
gonorrhoea prevents 212 000 cases of HIV
DALY, disability-adjusted life-year.

Source: Urdea et al. (2006).
Diagnosis of TB has been singled out as in need of urgent improvement

because current case detection rates fall well short of the target set by WHO
to control the disease (McNerney & Daley, 2011). Laboratory-based tests used
in industrialized countries have proved difficult to implement in developing
countries with poor laboratory infrastructure (Anthony et al., 2009). It has
been estimated that a widely implemented diagnostic test with a sensitivity
of 85% could reduce deaths from TB by nearly 400 000 each year if used to
initiate treatment (Keeler et al., 2006).
An example of technology that is not affordable in counties with the

greatest need is the Xpert MTB/RIF assay, which tests for TB in sputum and
simultaneously detects resistance to the major anti-tuberculosis drug
rifampicin (Helb et al., 2010). The test represents a major breakthrough in TB
diagnosis, but unfortunately the high cost will limit its application in countries
with a high burden TB (McNerney & Daley, 2011).
Health priorities vary across countries and regions and are related to local
demographic and geographical factors (Table 5).
16
Table 5 Public health priorities in Brazil, South Africa and India
Priorities Gaps
Brazil Infectious diseases: lower Disparities in need and access
respiratory tract infections across regions, reflecting local
(including TB), malaria, HIV, climate, terrain and poverty levels
Chagas disease, dengue,
Rapid tests for some diseases not
diarrhoeal diseases
available
South Current national health priorities Disparity of service provision in
Africa are HIV/AIDS and TB. The HIV urban and rural areas; reduced
prevalence rate is approximately access due to economic, social and
10.6% (17% for people aged geographical factors
15–49 years), with about 5.21
Diagnostic delay in people with
million people living with HIV
TB – accurate, rapid point-of-care
(Statistics South Africa, 2009).
tests not available; need earlier
HIV/AIDS is the leading cause of
diagnosis of TB in people with
death (28.8%). The estimated TB
HIV coinfection to prevent rapid
incidence was 476 732 in 2008
disease progression
(WHO, 2009). Emergence of drug-
resistant forms of TB and HIV has
worsened the situation
Other infections of note include
sexually transmitted infections,
upper respiratory tract infections
and, in some regions, malaria
India Lower respiratory tract infections, Limited access due to economic,
TB and diarrhoeal diseases social and geographical factors
In some regions parasitic diseases Woman and tribal groups
such as malaria and leishmaniasis marginalized
HIV/AIDS has been added to the Accurate rapid tests for some
list of priority diseases diseases not available
High burden of chronic disease
such as diabetes
China Lower respiratory tract infections, Disparity of service provision in
TB, HIV prevention, hepatitis B, urban and rural areas
sexually transmitted infections,
Migrant workers and other
schistosomiasis and other
vulnerable populations have
parasitic diseases
reduced access due to economic
China is on course to and social factors
eliminate malaria, leprosy and
Diagnostic delay in people with
schistosomiasis and would need
TB – accurate, rapid point-of-
tests of high sensitivity and
care tests not available; need
specificity to certify elimination
earlier diagnosis of TB to control
epidemic
There are few hard data on the unmet need for diagnostic tests in developing
countries or on the potential market opportunities.
17
3.4 Supply-side
25 landscape
20
3.4.1 Diagnostic test manufacturers
US$ million
15
Manufacturers of diagnostic tests range in size and scope, from large
multinational
10 corporations to small local companies employing a handful
of people. A number of non-profit-making organizations and product
5
development partnerships are also involved in the manufacture of diagnostic
tests. The
0 market is less dominated by large multinational corporations
than are other pharmaceutical sectors. During 2008 small companies took
gy
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ry
ry
ng
y
og
og
ltu
ist
ist
lo
an estimated 42% share of global revenues. Four companies (F. Hoffmann–
sti
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to
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he
he
La Roche Ltd, Siemens Medical Solutions, Abbott Laboratories and Beckman
gy
tic
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m
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an
ica
Ha
un
io
Coulter) had an estimated combined global market share of 44% (Figure 8).
Ge
us
gy
ob
in
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Cl
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Im
icr
However, multinational companies had a greater share of the revenue from
ct
sto
M
fe
Hi
In
diagnostic products for infectious disease immunology (Figure 9).
Figure 8 Estimated global market share by revenue, 2008.

(Total revenue: US$ 35 655 million)
F. Hoffmann–La Roche Ltd

local companies
Siemens Medical
Solutions
Abbott Laboratories
Inverness Medical Innovations, Inc. Beckman Coulter, Inc.

Bio-Rad Laboratories, Inc. BioMerieux SA
and Company Diagnostics Inc.

Others
BioMerieux SA 18
Abbott Laboratories
and Company Diagnostics Inc.
Figure 9 Estimated infectious disease immunology global IVD market share by

revenue, 2008. (Total revenue US$ 4357 million.)

Others
BioMerieux SA
Abbott Laboratories
DiaSorin S.p.A Becton, Dickinson
and Company
Qiagen N.V.
Beckman Coulter, Inc.
Bio-Rad Laboratories, Inc.
Siemens Medical Solutions
It should be noted that there has been consolidation of IVD companies in recent
years, with a number of mergers and acquisitions, a process that is continuing.
Thus, as the number of companies is shrinking, the overall share of the market
by large multinational companies is increasing due to the acquisition of local
manufacturers and distributors. One company has made over 30 acquisitions
in the past 5 years, including companies in Brazil, China, India, South Africa
In vitro diagnostic devices regulated
and the Republic of Korea.
There is no global or international diagnostics manufacturers’ association

equivalent to the International Federation of Pharmaceutical Manufacturers
and Associations (IFPMA), which has a biannual general assembly and a
code of conduct for its members. The formation of a global or international
No 52% Yes 48%
diagnostics manufacturers’ association would give the diagnostic industry a
single voice to advocate issues important to its members and would provide
a forum with which governments and international agencies could work to
institute quality In
standards for the industry.
vitro diagnostic devices regulation by region
3.4.2 Product development partnerships

The most significant non-profit-making organization involved in the
manufacture of IVD is the Oswaldo Cruz Foundation (Fiocruz) in Brazil,
which supplies a range of products to the public programmes of the General
Coordination of Public Health Laboratories of the Health Surveillance
Secretariat, the National Program on Sexually Transmitted Diseases and Aids
AFROsurveillance
and epidemiological AMRO EMRO EURO SEARO
programmes. WPRO
Other non-profit-making
11 are the
organizationNoinvolved 9 Foundation
5 2 Innovative
for 2 15 Diagnostics
New
(FIND; Geneva,
Yes Switzerland)
4 9and the 4Program14for Appropriate
3 7Technology in
Health (PATH; Seattle, WA, United States). FIND and PATH are focused more on
19
R&D and less on manufacturing of tests, but they do address problems with
supply through preferential pricing structures (Box 1).
Box 1 PATH and FIND
PATH is an international non-profit-making organization based in the United

States that aims to deliver health technologies designed for low-resource
settings through working with local communities and in partnership with the
commercial sector. Its work on diagnostic tools focuses on low-cost point-
of-care IVDs. PATH works with partners in developing countries to optimize
and evaluate new tests. Successful products have included rapid tests for
HIV, malaria and syphilis (PATH, 2005). In addition to product development, it
undertakes technology transfer to developing countries through nonexclusive
licensing to private-sector diagnostic manufacturers.
FIND is a non-profit-making organization based in Switzerland. Its mission

is to drive the development and implementation of accurate and affordable
diagnostic tests that are appropriate to patient care in low-resource settings.
FIND focuses on three diseases: TB, sleeping sickness and malaria. It works
through partnership with commercial companies on technologies already
used in industrialized counties and on the development of new tests. To date,
FIND’s manufacturing partners are companies based in Europe, the United
States and Japan. Following successful product evaluation, FIND negotiates
reduced pricing schemes for public-sector health providers in disease-endemic
countries. Its products so far are laboratory-based and it has embarked on a
programme of laboratory capacity building in developing countries to enable
successful implementation.
3.5 Regulatory environment

IVDs are not controlled to the same degree as other medical commodities
such as pharmaceuticals and vaccines. The United States Food and Drug
Administration (FDA) requires that IVDs that are sold and used in the United
States only must be registered and meet specified standards regarding
good manufacturing practice (GMP), quality, labelling, safety, effectiveness,
and data on their performance in defined patient groups. The expense and
logistical cost of seeking FDA approval is high, at approximately US$ 2 million;
hence, companies with commercial products not intended for the United
States market seldom submit these products for FDA assessment. European
regulatory processes vary across different countries.
The FDA has three levels of classification of devices. Regulation includes lot
release criteria, design controls, monitoring, reviews of standard operating
procedures, bioresearch inspections of clinical sites and data collection. Practices
are stringent. Applicants have to test their product using specimens from the
Center for Biologics Evaluation & Research or the Centers for Disease Control.
Reporting of incidences is enforced, and health hazard evaluations must be
performed, leading to product recall if necessary. The FDA has no jurisdiction
outside the United States, and its performance and stability requirements
20
may be very different from those required in other settings, especially tropical
climates. The FDA is expanding its global base, with international offices being
introduced gradually. Some tests are required to demonstrate efficacy in non-
United States conditions – for example, malaria tests need to work in high
temperatures and in the presence of other Plasmodium species.
For products made in the United States for export, the FDA issues a certificate
of export, which is sometimes misrepresented by sales staff in developing
country companies as FDA approval.
Europe uses the Conformité européenne (European conformity; CE) marking

process, which is not concerned with quality of the product but addresses
GMP. The CE mark does not require monitoring or surveillance. A system based
on GMP cannot guarantee good performance in a product, but can guarantee
only manufacturing quality, consistency and safety. All products for sale in the
European Union region are required to display the CE mark, which certifies that
a product has met EU consumer safety, health or environmental requirements.
CE marking does not relate to the effectiveness of the product or its ability to
correctly detect disease, and it is generally not considered equivalent to FDA
approval.
Japan uses levels of regulation like those of the United States, but regulation
does not exist for diagnostics and is seen only as a formality. There is no
monitoring of quality after licensing has been set up.
Many other countries have no regulatory system for diagnostics and no means
of assessing the quality of tests, whether imported or manufactured locally. A
survey conducted by WHO/TDR in 2001–2002 revealed that few developing
countries have bodies that regulate IVDs or monitor the diagnostics industry
(Figure 10). Whereas some control is exercised over the screening tests used
in blood banks, few checks are made on the efficacy of tests for the diagnostic
laboratory. The lack of regulation has allowed a large array of poor-performing
diagnostics on to the market. These low-quality tests are generally sold at a
very low price, with little to no guarantee of their results. They are a particular
concern in the private sector, where they are sold openly, sometimes with
misleading or inaccurate performance data. The lack of regulation is a serious
concern that has been discussed in a number of fora (Academy of Medical
Sciences, 2009). A summary of regulatory approval mechanisms is presented
in Table 6.
21
Figure 10 Regulatory oversight of diagnostic tests in developing countries
In vitro diagnostic devices regulated
No 52% Yes 48%
In vitro diagnostic devices regulation by region
AFRO AMRO EMRO EURO SEARO WPRO

No 11 9 5 2 2 15
Yes 4 9 4 14 3 7
Source: TDR, 2002.
In summary, there are three levels to existing diagnostics regulation processes

globally:
Genomics
• No regulation at all.
Proteomics
• Registration with a regulatory agency required to sell a product, but

Pathogenesis
Epidemiology
requiring no evaluation or information on the quality of the product.
Host immune
response
• Registration and
Animalevaluation
models – this is required for a few
Regulatory but not all products
approval
(e.g. HIV tests).

Diagnostic
targets
There Target
is no international
product standard
Product that Laboratory
Proof of manufacturers
and must meet.
Policy and Test Some
profile prototype principle field evaluations guidelines for use adoption
companies choose to follow the GMP ISO guidelines, but others do not think
Technology
platform
this is necessary. There is no means of enforcement.
Mid-volume High volume
-
Microscopy
There is no harmonization
Serology
of requirements for registration.
production for
regulatory trials
If a company wants
production and
distribution
to sell its productMicrofluidics
abroad, the company has to acquire the licensing certificate
from each country its wishes to sell in and undergo the whole registration
Nanotechnology
process separately for each country, which discourages global distribution.
3.5.1 Problems with existing regulatory systems

• Approval process is not transparent and is lengthy.
• No means of enforcement of standards.
Market
• No harmonization between different systems.
research
• No single point of entry for regulatory approval in multiple countries.
• Requirements are not always applicable in developing countries.
R&D Financing
22
• Requirements do not always measure or reflect quality or efficacy.
• Staffing levels are often inadequate for carrying out inspections or
monitoring.
• There is a paucity of information on existing regulatory practices to assess
the current situation accurately.
• Availability of diagnostics in smaller countries is problematic, as diagnostic
companies have limited resources to conduct trials in every country and
would rarely invest resources to seek approval.
3.5.2 Global Harmonization Task Force (GHTF) for diagnostics

regulation
The Global Harmonization Task Force (GHTF) was established in 2002 and
there is a specific group for IVDs. However, these groups are making very slow
progress. Environmental scanning is needed to map the regulation of IVDs
and assess the extent of disparity between countries.
The Asia Harmonization Working Party (AHWP) has an agreed regulation

system of medical devices and has in recent years established a working group
(WG01A) involving 20 countries to specifically look at the market approval of
IVDs. The aim of AHWP is to develop one agreed standard for a regulatory
system for IVDs and to provide a template for countries to tailor to their own
particular requirements.
Lots of work is carried out in China with GHTF and AHWP, involving many
multinational companies. Smaller companies, however, have no real
representation in the groups and therefore little access to the regulatory
guidelines produced. The regulations need to be made transparent for all.
Table 6 Regulatory and approval mechanisms

Agency Scope Jurisdiction
FDA (United States) Rigorous testing to establish Required for United States
performance in defined market, but high cost deters
target population application
CE mark (Europe) Marker for quality but not a Required for European
guide on performance market
Country review Review by national agency May involve testing in
before adoption by public national laboratory; widely
health sector ignored by private sector
Examples of regulatory processes in developing countries are presented in Table

7. In practice, although most countries require registration of products for a
fee, few demand evidence of their accuracy or of their performance in the local
population. Public sector procurement is guided by WHO recommendations,
where available. Controls and monitoring are soon to be increased in South-
East Asia where there are moves by the Association of South-East Asian Nations
(ASEAN: Indonesia, Singapore, Malaysia, the Philippines, Thailand, Brunei,
Cambodia, Viet Nam, the Lao People’s Democratic Republic and Myanmar)
23
to harmonize regulation of medical devices. China has also increased the
regulatory requirements for IVDs for its domestic market.
It should be noted that not all countries have equal access to the international
diagnostics market, and restrictions apply to the export of goods from the
United States to Cuba, Iran, the Libyan Arab Jamahiriya, the Democratic
People’s Republic of Korea, Sudan and the Syrian Arabic Republic.
Table 7 Examples of developing country regulation of IVDs

Country Regulatory body Impact
Brazil Agência Nacional de Mandatory registration
Vigilância Sanitária
Cost of registration depends on
the size of the company doing the
registration
Products must be reregistered
every 5 years
China State Food and Drug No specific regulations aimed at
Administration IVD; reagents and instruments
require separate registration
China Quality Certification
Centre Class II devices require testing
(disease-specific regulations); class
III clinical test data required
Safety of imported goods checked
India Central Drugs Standard Licensing for importation or local
Control Organization manufacture
Public sector requires testing in
national laboratory; no controls on
private-sector purchasing
Republic of Korean Food and Drug Imported devices require
Korea Administration registration; pre-market approval
for class II, III and IV devices
requires test data
Nigeria National Agency for Food No regulations aimed at IVDs
and Drug Administration
and Control
Singapore Center for Medical Device New regulations being
Registration implemented will require
registration of all medical devices
Health Sciences Authority
by 2011
South Africa Plans to establish new NHLS reviews published
agency data or follows international
recommendations
South African Regulatory
Authority for Health Currently no restrictions on import
Products to replace and use of IVDs (used outside
Medicines Control Council NHLS)
24
3.5.3 Effect of lack of regulation on quality of diagnostic tests
The absence of regulatory control or a lack of enforcement has resulted
in the sale and use of IVDs of variable quality in developing countries. This
situation is made worse by a lack of capacity for quality control or quality
assurance measures within the laboratory services and regulatory bodies
of many countries. Independent performance data are rarely available, and
test purchasers are often reliant on data supplied by the manufacturer of
distributor. Sale of fake tests is an additional problem, and in countries such
as China and India it is difficult for small clinics to know whether the products
they are buying are real or substandard copies. Problems also occur with non-
commercial in-house and locally produced tests. Poor performance may be
due to inadequate test design, substandard manufacturing practices or the
application of tests to unsuitable populations. Examples of recently reported
problems are heat instability of point-of-care tests for malaria (TDR, 2010),
inappropriate test targets due to variation in the strain of virus (Aghokeng et
al., 2009) and interference from indigenous infections (Everett et al., 2010).
Reports highlighting the variability of test performance of rapid tests for TB,
dengue and malaria are available from the Special Programme for Research
and Training in Tropical Diseases (TDR, 2008, 2009, 2010).
3.6 WHO prequalification

In the absence of stringent regulatory authorities in most of the developing
world, WHO initiated a system for prequalification of medicines and vaccines
and then, in 2008, diagnostics. The WHO Prequalification of Diagnostics
Programme aims to promote and facilitate equitable access to safe, appropriate,
high-quality, affordable diagnostics for high-burden diseases, suitable for use
in resource-limited settings. The programme originally gave priority to HIV
and acquired immunodeficiency syndrome (AIDS) and malaria but now also
includes diagnostics for hepatitis B and C. Western regulatory approval of
new diagnostics for use in developing countries may be considered a possible
alternative but is not usually tailored to evaluate suitability and adaptability of
diagnostics for diseases prevalent in developing countries.
Prequalification, where tests are evaluated against a defined list of quality and
performance criteria, could provide a very useful solution. It could create a
common ground for ensuring quality of a product on a far more global basis
than the current fragmented regulatory systems allow. It would ensure quality
of the device, but it does not guarantee batch consistency, for which local
quality control would be needed.
Diagnostic companies often produce multiple products for different diseases,

based on similar technology platforms, and many companies have access
to the same reagents and technologies. Proliferation of diagnostic products
requiring regulatory approval presents an enormous challenge to the WHO
prequalification programme. For example, in response to a change from
syndromic management of fever to evidence-based treatment requiring the
use of diagnostics, over 120 malaria rapid tests have become commercially
available in the past few years.
25
Many products that have only just been approved are already outdated –
but because they are now listed as approved, they are still being purchased
worldwide.
In the absence of international standards, WHO has adopted a process of

approval for new tests for TB, whereby evidence on a test’s performance is
collated and reviewed by an invited expert committee. The conclusions and
recommendations of the committee are considered by the Strategic and
Technical Advisory Group for Tuberculosis, which may choose to issue a
recommendation with guidelines regarding appropriate implementation of
the technology. It should be noted, however, that the high cost of field trials
and multicentre evaluation studies serves as a deterrent, and there is a bias
towards tests from large companies and those developed in partnership with
well-funded organizations.
3.7 Summary of the diagnostics landscape

• The field of diagnostics differs from other pharmaceutical sectors. The
market value is lower value than that for drugs and vaccine, products have a
shorter lifespan and there are differences in the regulatory approval process.
• The diagnostics market is expanding, including emerging economies in the
developing world, and yet many people in developing countries have poor
or no access to the diagnostic tests that are widely available in developed
countries.
• Providers of diagnostic services in developing countries include the
public and private sectors, non-profit-making organizations and NGOs.
Governments are major purchases of diagnostic tests in countries where
they are the main providers of primary health care, such as Brazil and South
Africa.
• The disease burden is high and improved access to diagnostic tests is badly
needed to enable evidence-based treatment, to improve patient outcomes
and to reduce problems of drug resistance.
• The regulatory environment for IVDs in the developing world is not
conducive to product development: Approval processes are lengthy and
not harmonized, and there is a lack transparency. The failure of most
developing countries to monitor test quality or effectiveness allows poor-
quality and inappropriate tests to be marketed and used, wasting precious
resources.
• The implementation of diagnostics in developing countries is impeded by
problems of access, affordability, lack of quality assurance and weak health
systems that frequently result in stockouts of diagnostics and drugs.
26
4. Opportunities and absorptive capacity
for R&DAFRO AMRO EMRO EURO of
and manufacturing SEARO
IVDsWPRO
in
the developing
No 11 world
9 5 2 2 15
Yes 4 9 4 14 3 7
To develop, manufacture and market a diagnostic test is a considerable
undertaking that can take 2–10 years at a cost of US$ 10–100 million (Kettler
et al., 2004). The pathway by which a new diagnostic device is developed,
validated and adopted for public sector use is illustrated in Figure 11.
Figure 11 Bench-to-bedside pathway for diagnostic test research
Genomics
Proteomics
Pathogenesis
Epidemiology
Host immune
response
Animal models Regulatory approval
Diagnostic
targets
Target product Product Proof of Laboratory and Policy and Test
profile prototype principle field evaluations guidelines for use adoption
Technology
platform
Mid-volume High volume

-
Microscopy
production for production and
Serology regulatory trials distribution
Microfluidics
Nanotechnology
Production of IVDs for the developing world follows the same pathways as
other products, and adequate financing is a key requisite (Figure 12).
Market
research
R&D Financing
Prototype
Regulatory
Validation
acceptance
27
Serology
Microfluidics
Nanotechnology
Figure 12 Product development cycle
Market
research
R&D Financing
Prototype
Regulatory
Validation
acceptance
Marketing and
Manufacture Sales
distribution
4.1 Manufacturing in developing countries

Sustainable local manufacture of IVDs requires that adequate skills and
infrastructure are maintained at all stages of the process, including R&D,
manufacturing, quality assessment, packaging, marketing and distribution. For
Biomarkers Technology
novel products it may be necessary to develop new manufacturing processes,
and specialist knowledge may be required to engineer and maintain the
appropriate facilities.
Manufacturing capacity varies widely across the world. In general, countries in

Africa Prototype
have a much less developed manufacturing base thanTest countries in Asia
and Latin America. The low level of technology development is reflected by
low levelsR&D
of investment in capital equipment.2 During 2002
Manufacturing the region of sub-
Marketing
Saharan Africa (excluding South Africa) imported equipment to the value of
US$ 5264 million, whereas investment of east Asia and Latin America in capital
equipment was US$ 444 980 million and US$ 1 033 883 million, respectively (Lal
& Pietrobelli, 2005). Imports into Kenya and Ghana were 100-fold lower than
those of the Republic of Korea and Malaysia. Investment in people may also
200 as an indicator of a country’s capacity; in this respect Africa also
be taken 2005
lags
180 2006
behind
160
other regions of the world. During 1995–1997 in sub-Saharan Africa
(including
140 South Africa), 0.04% of the population were students of technical
US$ 1000s
2007
disciplines
120 (natural sciences, mathematics, computing and engineering). This
2008
100 with 1.65% in the Republic of Korea and 0.13% in Malaysia. During
compared 2009
80
60
40
2 Excluding
20 transport equipment, but including parts and components.
0
Diagnostics Drugs Basic Vaccines Unspecified Operational
science 28
Marketing and
Manufacture Sales
distribution
the same period over 1 million technical students enrolled in India, compared
with just 220 660 in the whole of sub-Saharan Africa (Lal & Pietrobelli, 2005).
Figure 13 Sector expertise required in IVD production
Biomarkers Technology
Prototype Test
R&D Manufacturing Marketing
Figure 13 illustrates the three components of successful test production. The

technical capacity and infrastructure needed to develop and manufacture
a diagnostic test varies with the type of product and the complexity of the
200
technology 2005
(Table 8). Some can be assembled with little need for dedicated
180 2006
facilities,
160 while others require the manufacture of specialist reagents or
US$ 1000s
construction
140 of highly sophisticated instrumentation and software. Whereas
2007
microbiological
120 staining solutions are frequently prepared in the laboratories
2008
100
where they are to be used, tests involving specialist reagents and engineered
2009
80
platforms
60
are more often manufactured by the commercial sector.
40
Table 820Examples of diagnostic test requirements
0
Product Diagnostics Drugs Basic Vaccines
Technology Unspecified Operational
requirements
science
Microbiological staining kit Chemical reagents, glass slides
Immunochromatographic Purified antigens, specific antibodies, labelling
lateral flow device technology, engineered detection platform
Polymerase chain reaction Sample extraction reagents, reaction mix
(PCR) (e.g. DNA primers, enzymes), thermocycler
instrumentation, detection technology
Taiwan, China – papers and patents (1976–1998)
Automated
10 000 microbiological Culture media, growth-detection chemistry, Papers
culture sophisticated instrumentation, specialist software
8000 Patents
6000
Number
4.1.1 Good manufacturing processes

4000
Ensuring that facilities are using GMP would require:
2000
• a skilled workforce provided with regular training, guidelines and standard
operating
0 procedures;
• audit of facilities by local regulatory/notified bodies to ensure compliance.
76
78
80
82
84
86
88
90
92
94
96
98
19
19
19
19
19
19
19
19
19
19
19
19
Year
Korea – papers and patents (1976–1998)

12 000 Papers
10 000 29 Patents
8000
ber
4.1.2 Local quality control
Countries importing IVDs need an effective quality assurance system to
ensure product consistency and to identify fake products. Such a system has
been implemented in some settings whereby every batch undergoes quality
assurance validation/evaluation using control panels of test samples supplied
by the manufacturer, and a quality certificate is issued. An example of this is
NewScen, which sells its HIV tests in South Africa – every batch is checked.
Some laboratories have adopted international standards of quality

management to become “accredited” laboratories. The international standard
ISO 15189 was developed for medical laboratories by ISO. This provides a means
of testing/monitoring competency of testing and calibration in a laboratory.
It encompasses sample collection, interpretation of test results, turnaround
times, risk management and the education and training of staff. Particularly
challenging for developing countries are the components that rely on external
factors such as the maintenance of equipment (preventive and curative)
and procurement procedures. The system is mandatory in most developed
countries but is expensive and time-consuming to implement. The Kenyan
Medical Research Institute laboratory in Kisuma estimated the process took 2
years, with pre- and post-accreditation costs of US$ 126 553 and US$ 71 143,
respectively (not including equipment and infrastructure maintenance costs)
(Zeh et al., 2010). There are currently several initiatives to improve the quality
of laboratory services in developing countries and incorporate components
of the accreditation process (Nkengasong et al., 2009); however, they focus
mainly on the government sector, and private laboratories remain largely
unregulated.
Manufacture of IVDs in developing countries is undertaken by commercial and

noncommercial organizations. Commercial manufacture may be undertaken
by local small and medium-sized enterprises or by subsidiaries of multinational
companies. Public–private partnerships have also emerged, where non-profit-
making organizations work with commercial partners. Most IVDs manufactured
in developing countries are instrument-free devices or are reagents for use
with instruments built elsewhere. They frequently target developing country
priority diseases such as HIV and malaria. In China it is estimated that local
producers have a 60% share of the market, with the remaining 40% of imports
being mainly sophisticated tests and instrumentation.
Tests manufactured in less developed countries are usually used in the

countries where they are produced. Some non-profit-making producers are
not permitted to engage in commercial activity and supply only the public
sector. Chinese-manufactured tests are exported to other countries, as are
those from India. Tests are exported either directly by the manufacturers or
through networks provided by multinational companies.
An example of IVD tests that are used widely in developing countries are rapid
tests to detect malaria antigen. In a list of commercial tests published on a
WHO website in 2009, two-thirds of companies listed as suppliers were from
Europe, North America and Australia, with the remainder being from less
30
developed countries and emerging economies3 (the site of manufacture was
not provided) (Table 9).
Table 9 Commercial producers of tests for malaria antigen

Country/region Number of
companies
Europe 10
United States 9
India 5
Australia 2
South Africa 2
China 2
Canada 2
Kenya 1
Republic of Korea 1
Indonesia 1
Total 35
4.2 R&D in developing countries

Development of diagnostic tests requires identification and validation of
markers that are predictive of the disease coupled with a robust system for
their detection. Whereas biomarker discovery requires research in biological
processes, detection may involve the physical sciences, electrical engineering
and instrument design. Although crucial for disease control, diagnostics
research for infectious diseases has received relatively little funding
compared with other areas of translational research such as drug and vaccine
development.
An example is provided in Figure 14, which shows that over the 5 years 2005–
2009 diagnostics research received less than 8% of the total funds allocated to
TB research.
3 See http://www.wpro.who.int/NR/rdonlyres/3AB3492B-4E2D-42FF-9904-58EDD3BA7921/0/
ProductssubmittedforRnd1_Rev_24MAR09.pdf.
31
Prototype Test
R&D Manufacturing Marketing
Figure 14 TB research funding (all sources) by research category, 2005–2009
200 2005
180 2006
160
US$ 1000s
140 2007
120 2008
100 2009
80
60
40
20
0
science
Source: Data from Salazar (2010).
This lack of attention to diagnostics for infectious diseases is due to a variety

of reasons, including:
• lack of valueTaiwan,
associated
Chinawith diagnostics
– papers in health-care
and patents (1976–1998) delivery;
• lack of clear product specifications of diagnostics;
10 000 Papers
• lack of funding initiatives by global donors; Patents
8000
• unclear market demand and forecasting, which prevents companies from
undertaking
6000 risk of development;
Number
• unclear regulatory pathways;

4000
• unclear procurement and distribution mechanisms.
2000
Against this background it is perhaps not surprising that diagnostics R&D
has not 0flourished in developing countries. Few developing countries have
the capacity for translational research, and new product development is
76
78
80
82
84
86
88
90
92
94
96
98
19
19
19
19
19
19
19
19
19
19
19
19
confined largely to countries with academic centres of excellence or where

Year
investment by the commercial sector has been forthcoming. Examples of R&D
on diagnostics that have not progressed to product development are a test for
schistosomiasis inKorea
Ghana– papers
and a and
testpatents (1976–1998)TB in Uganda (Al-Bader
for drug-resistant
12 000 Papers
et al., 2010).
10 000 Patents
The capacity
8000
to translate scientific research to protected intellectual property
Number
varies across countries. In some countries there has been a strong correlation
6000
between the number of scientific publications and the number of patents. In
4000
others, such as Brazil, the increase in academic output was not matched by
increased
2000 patents (Figure 15).
0
76
78
80
82
84
86
88
90
92
94
96
98
19
19
19
19
19
19
19
19
19
19
19
19
Year
Brazil – papers and patents (1976–1998)

9000 Papers
7000 Patents
Number
5000
32
3000
20
0
science
Figure 15 Comparison of numbers of scientific publications and patents from

Taiwan, China, the Republic of Korea and Brazil, 1976–1998
Taiwan, China – papers and patents (1976–1998)

10 000 Papers
8000 Patents
6000
Number
4000
2000
0
76
78
80
82
84
86
88
90
92
94
96
98
19
19
19
19
19
19
19
19
19
19
19
19
Year
Korea – papers and patents (1976–1998)

12 000 Papers
10 000 Patents
8000
Number
6000
4000
2000
0
76
78
80
82
84
86
88
90
92
94
96
98
19
19
19
19
19
19
19
19
19
19
19
19
Year
Brazil – papers and patents (1976–1998)

9000 Papers
7000 Patents
Number
5000
3000
1000
0
76
78
80
82
84
86
88
90
92
94
96
98
19
19
19
19
19
19
19
19
19
19
19
19
Year
Source: ISI and USPTO (Rapini, 2000)
33
1000
0
76
78
80
82
84
86
88
90
92
94
96
98
19
19
19
19
19
19
19
19
19
19
19
19
Year
4.3 Opportunities and absorptive capacity for diagnostics R&D
and manufacturing
There are opportunities for cooperation with international partners. This may
take the form of partnerships with academic institutions (Box 2), commercial
bodies, and non-profit-making organisations such as PATH and FIND. Product
development is promoted through sharing of resources. The risks are also
shared, and as illustrated in Figure 16. Projects lead to shared rewards, a
partnership model for R&D for novel antibiotics first proposed by So et al
(2011). The combination of partners is shown in Figure 17. There is a trend
towards the formation of public–private partnerships for the development of
diagnostic tests for diseases that are endemic in developing countries.
Figure 16 Accelerating innovation to production: The 3Rs of partnership for diagnostics R&D
Regulatory approval
Diagnostic
targets
Product Proof of Laboratory Policy
Product Test
and field and
specifications prototype principle evaluations guidelines adoption
Technology
platform
Shared resources
Shared risks
Shared rewards
Box 2 R&D collaboration with academic institutions
There are numerous examples of collaborations Public

with academic institutions in industrialized
countries (Nwaka et al., 2010). They rangefunds from biomarker discovery and product
development projects to evaluation studies. They may incorporate capacity building
through postgraduate training schemes. Three institutions with long histories in the field
are the Institute of Tropical Medicine in Antwerp (Instituut Voor Tropische Geneeskunde;
ITG), the Royal Tropical Institute, Amsterdam (Koninklijk Instituut voor de Tropen; KIT) and
the London School of Hygiene and Tropical Medicine. Success stories include pioneering
of light-emitted diode (LED) microscopy Non-profit-
by KIT, a technology now widely adopted
(Anthony et al., 2006), and an improved test kit for sleeping sickness developed by ITG in
making
collaboration with the producersBig of the test, the Congolese Institut National de Recherche
Biomédicale
Market(INRB) (Buscher etpharma
al., 2009).
Local small
/medium- Market
Recent grant awarding schemes forsized R&Denterprise
activities in developing countries
have been posted by the Wellcome Trust, the Bill & Melinda Gates Foundation,
Non-profit-making
Canadian Grand Challenges, the European Commission and the United States
34
Diagnostic
targets
Product Proof of Laboratory Policy
Product Test
and field and
specifications prototype principle evaluations guidelines adoption
Technology
platform
National Institutes of Health. These calls are open only to investigators from
Shared resources
developing countries, but they encourage collaboration with developed country
Shared risks
partners whose expertise may complement that in developing countries.
Shared rewards
Figure 17 Drivers of R&D for IVDs for diseases of poverty: The trend is towards
public–private partnerships
Public
funds
Non-profit-
making
Big
Market pharma
Local small
/medium- Market
sized enterprise
Non-profit-making
Philanthropy
Two networks have recently been established to promote and support R&D in
developing countries, including development of diagnostic tools: the African
Network for Drugs and Diagnostics Innovation (ANDI)4 and the Asian Network
for Drugs
Number ofand Diagnostics
health-biotechnology Innovation1 (NDI).
papers published
5
Number of health-biotechnology patents issued 2
by United States, 2003
0 50 100 150 200 250 300 350
IndiaRepublic
has ofestablished
Korea
a similar network, and the other countries
0 5 10 15 20 25in30Asia
35 are
also forming
China
a network under the auspices
Indiaof the Science and Technology Task
ForceIndia
for ASEAN. In 2012, there will be opportunities to merge these country
Republic of Korea
China
networks
Brazil into the Asian Network for Drugs
Brazil
and Diagnostics Innovation. A
South Africa Cuba
4 “ANDI’s
Cuba primary objective is to promote andSouth supportAfrica health product R&D led by African
1991
institutions
Egypt for diseases of high prevalence inEgypt the continent. The expected outcome is the
2002
discovery, development and delivery of affordable new health tools including those based
onSources:
traditional medicine,
United States as wellOffice;
Patent and Trademark as the development
Institute of capacity
for Scientific Information: and establishment of centres
Science-Metrix
of research excellence” (http://www.andi-africa.org/).
5 “The Chinese Network for Drugs and Diagnostics Innovation, China NDI, is built with the
support of UNICEF/UNDP/World Bank/WHO Special Planning Agency for Tropical Disease
Research and Training. The secretariat is based in National Institute of Parasitic Disease,
China CDC. Through capacity building, infrastructure development and promotion of
cooperation and exchange, China NDI aims to support and aid Chinese researchers and
scientists for tropical disease in initiating and developing drugs, vaccines and diagnostic
reagents, in establishing a strong cooperation mechanism of non-profit, result-oriented,
and government–private partnership including international partners, and in creating new
tools and products of independent intellectual property rights to gradually build sustainable
win–win R&D model through resources integration and information sharing” (http://www.
ipd.org.cn).
Market Capacity
research assessment
35
Shared resources
Shared risks
Shared rewards
similar network for drugs and diagnostics innovation is being planned for
South and Central America.
For the first time in many countries, through these networks, science and
technology and engineering groups in academia and industry are coming into
contact with departments of health Public
and their needs. Such networks, usually
aimed at non-health sectors suchfunds
as communications, household appliances
and defence systems, may bridge the vast gap between the need for better
diagnostic tests and technology innovation. Providing a forum to interact
is only a first step; obtaining funding, finding a common working language
and identifying a critical path for the translation of innovative ideas into a
diagnostic product are vital elements to be addressed if diagnostics R&D in
Non-profit-
the developing world are to makemaking
a difference.
Big
4.3.1 Biotechnology
Market in developing countries
pharma
Local small
Biotechnology is flourishing in some developing countries. Market Among
/medium-
developing countries, the Republic of Korea leads in the number of health
sized enterprise
biotechnology papers published, followed by China, India, Brazil, South Africa,
Cuba and Egypt (Figure 18). There was a tremendous increase in number of
Non-profit-making
publications in 2002 compared with 1991. The vibrancy of the biotechnology
sector in developing countries is also in evidence from the number of health
biotechnology patents issued by the United States in 2003, where India leads
with more than 30 patents compared with 29 from the Republic of Korea, 12
from China and 6 from Brazil.
Philanthropy
Many of these researchers are collaborating with biotechnology firms in the
developed world. Although there are still many hurdles, such as funding,
regulatory issues, “brain drain” and fragmented health infrastructure, the
absorptive capacity for diagnostics R&D is promising.
Figure 18 Increase in scientific publications and patents issues
Number of health-biotechnology papers published 1 Number of health-biotechnology patents issued 2

0 50 100 150 200 250 300 350
0 5 10 15 20 25 30 35
Republic of Korea
India
China
Republic of Korea
India
China
Brazil
Brazil
South Africa Cuba
Cuba South Africa
1991
Egypt 2002 Egypt
Sources: United States Patent and Trademark Office; Institute for Scientific Information: Science-Metrix
Source: Economist (2004).
36
Non-profit-making
5. Technology transfer to developing

Philanthropy
countries
Local manufacture may provide commercial and logistical advantages.
However, the major benefits are that it offers tailored production of IVDs to
suit local needs while reducing reliance on imported goods.
Prospects for improving access to diagnostics for the most vulnerable

populations are enhanced
Number of health-biotechnology by three key1 factors:
papers published Number of health-biotechnology patents issued 2
• increased political 0 50 100will
150 arising from
200 250 300 350 recognition that improved access
0 5 10 15 20 25 30 35
to diagnostics in developing countries will accelerate progress to the
Republic of Korea
India
Millennium
China Development Goal; Republic of Korea
• recognition
India of emerging markets by the Chinacommercial sector;
• emergence of new point-of-care technologies
Brazil
Brazil appropriate for use in
developing
South Africa countries that do not requireCubalaboratory infrastructure or highly
trained
Cuba technical personnel. 1991
South Africa
Egypt 2002 Egypt
When stakeholders were asked about local production of IVDs, they identified
Sources: United States Patent and Trademark Office; Institute for Scientific Information: Science-Metrix
increased political will, closeness to the market and access to local knowledge
as opportunities. Perceived advantages of in situ manufacture over
importation included decreased regulatory barriers, reduced foreign currency
expenditure, and reduced distribution and shipping costs. It should be noted
that although most feel that the lack of regulation is damaging to the industry,
some companies see the opportunity to market their tests unhindered by
regulatory processes as an advantage.
Figure 19 Diagram of technology transfer pathway
Market Capacity
research assessment
Prepare
workforce Financing
Build R&D Sales

capacity
Build Build marketing

manufacturing and distribution
capacity network
Regulatory
Validation acceptance
37
There are several models exemplifying transfer of technology for production
of IVDs to developing countries. They may involve transfer of technology
relating to one or more elements of the IVD production pipeline (Figure 19):
• R&D: Transfer of knowledge to develop, optimize and evaluate a prototype
test.
• Manufacturing: Transfer of knowledge and know-how relating to
manufacture and packaging; may include design and tooling of
manufacturing plant and the implementation of quality standards.
• Marketing: Support for marketing and distribution.
• No technology transfer: No external assistance required. Necessary know-
how is indigenous or is attained from literature in the public domain.
Participants in technology transfer activities include multinational

corporations, small local companies, academic partners and non-profit-making
organizations (Figure 20). By far the most frequent instances of technology
transfer are from diagnostic companies in the developed world to diagnostic
companies in the developing world for the purpose of manufacturing
(indicated by a red arrow in Figure 20). Often there is no transfer of technology
know-how or any further R&D conducted by the developed country partner.
The developed country partners are often located in a country with a large
domestic market. Products made under this model are cheaper and can be
approved more easily in the recipient country. Technology transfers that
are R&D based can involve both the public and private sectors, but because
there are few R&-based companies in the developing world, there have not
been many successes. Product development partnerships in the developed
world tend to seek out diagnostic manufacturers in the developed world
for technology transfer and then negotiate for two-tier pricing for their
products. Much of the innovation in recent years for point-of-care and rapid
detection technology have come from small and medium-sized companies
in the developed world. These companies tend to seek out academia, R&D-
based companies or public research institutions in the developing world for
partnership, either for further R&D to utilize their technology for diseases of
public health importance in the developing world or for manufacturing. This
is the ideal model of technology transfer and local production.
38
Figure 20 Models of technology transfer and local production
Industrialized countries
Academia/research Product development Small and medium- Diagnostic

institutions partnerships sized companies companies
Academia/research Small and medium- R&D-based Diagnostic

institutions sized companies companies manufacturers
Low- and middle-income countries
Table 10 offers some examples or technology transfer. It should be noted

that not all technology transferred leads to successful products; for example,
the transfer of simple immunochromatographic technology for detecting
antibodies and antigens has been successful for some diseases such as malaria,
but poor-quality tests for other diseases have also been produced, some of
which continue to be sold.
Table 10 Examples of technology transfer

Technology transfer Example
Transfer of manufacturing by A United States based company,
multinational company. In this model Orasure Technologies Inc., has
manufacturing technology is transferred contracted a company in Thailand to
to a subsidiary site in a developing assembly its OraQuick HIV device
country
Diagnostic R&D by multinational Development of molecular test
company at the developing country site. for mycobacteria in South African
In this model product development but laboratories by Roche Diagnostics. The
not manufacture is undertaken at the test was designed to meet the needs
subsidiary site of South Africa, which has a significant
number of cases of pulmonary
infection with mycobacteria other
than TB
Continues…
39
Continued from previous page
Technology transfer Example

Partnership of local small or medium- Production of rapid tests for priority
sized enterprise or non-profit-making diseases by the Immunobiological
organization with multinational Technology Institute (Fiocruz) in
company for technology transfer and Brazil in partnership with Chembio
sharing of knowledge Diagnostic Systems, Inc.
Partnership of commercial test India: various companies have
developer/manufacturer with collaborated with PATH for lateral flow
international non-profit-making point-of-care technology
organization
Partnership of non-profit-making PATH or FIND partnership with
organization with non-profit-making reference laboratories to evaluate tests
international organization
Procurement of technology by South Africa: NHLS have developed
developing country test developer to non-profit-making in-house tests
enable independent development and
manufacture of a novel test
Development and manufacture of South Africa: Vision Biotech/Alere
diagnostic test using indigenous know- Healthcare Pty1 – rapid tests for
how and technology and knowledge HIV, malaria and human chorionic
obtained from published literature gonadotrophin (HCG)
1 Vision Biotech was an independently owned small or medium-sized enterprise purchased by

Inverness Medical Innovations, Inc. in 2008 and rebranded as Alere Healthcare Pty in 2010.
5.2 Technology transfer and productive capacity for diagnostics.

This section contains examples of recipients of technology transfer for local
manufacturers of IVD.
5.2.1 Fiocruz
The Oswaldo Cruz Foundation (Fiocruz) is one of the world’s most successful
recipients of technology for diagnosing infectious diseases. Fiocruz is a
Brazilian scientific institution for R&D affiliated to the Brazilian Ministry of
Health that has developed and produced IVDs both independently, and in
collaboration with international commercial partners. In 1976 it established
the Immunobiological Technology Institute (Bio-Manguinhos), a technological
unit that produces vaccines and diagnostics, focusing on diseases of national
priority. It produces reagents for diagnosis of infectious and parasitic diseases,
including HIV, leishmaniasis, Chagas disease, dengue fever, hepatitis and
rubella. During 2008 Fiocruz produced over 5 million diagnostic reagents.
Bio-Manguinhos observes GMP and its products have the stamp of the
National Health Surveillance Agency (ANVISA). Fiocruz has signed a series
of technology transference agreements with Chembio Diagnostics, a United
States-based company specializing in rapid diagnostic tests. The agreements
give Fiocruz access to a second-generation lateral flow test platform, the
Dual Path Platform (DPP), a rapid immunoblot for serologic HIV infection
confirmation and reagents that are proprietary to Chembio. The technology
transference process included access to technical documentation, personnel
40
training and exchange visits. The agreement incorporated a minimum quota
of purchases by Fiocruz from Chembio, on the understanding that once the
technology transfer process is complete royalties would be paid. In 2010 the
company reported approval of its DPP HIV 1/2 screening and confirmatory
tests by ANVISA. Regulatory approvals for the DPP leptospirosis and syphilis-
treponemal tests are pending, and submission of the multiplex Syphilis Screen
& Confirm test is anticipated during 2011.In 2011 Bio-Manguinhos received
regulatory approval from Brazil’s Ministry of Agriculture, Livestock and Food
Supply to market Chembio’s DPP visceral canine leishmaniasis test. As a result
of this initial regulatory approval, Chembio anticipates submitting the product
for CE marking and potentially United States FDA approval, so that the product
can be further commercialized in other affected regions. Chembio also has
under development a new DPP test for Chagas disease, which is endemic to
Brazil.
Fiocruz has benefited from access to a large market through using the
purchasing power of the Ministry of Health. Brazil has a population
approaching 190 million, of which an estimated 150 million people are users
of the National Health System. Within the public sector 400 million diagnostic
tests are authorized annually.
5.2.2 Republic of South Africa

South Africa is presented as one of the few countries in Africa with a high
burden of infectious disease that has a nascent programme of technology
transfer for local production of diagnostics. It exemplifies a country of high
need but where opportunities for local manufacture have yet to be fully
exploited. It has a population of approximately 50 million, 90% of whom live
in or around 5 major urban centres. With a large population at risk of infection
and a government committed to improving the health of the population, South
Africa has considerable market potential. It also has the strongest economy
in southern Africa and is a net exporter to countries of the region. Projected
gross domestic product (GDP) (purchasing power parity, PPP) for 2010 is US$
521.878 billion and GDP (PPP) per capita is US$ 10 466 (IMF, 2010). South Africa
has an established manufacturing base and good infrastructure, but current
manufacturing of IVDs is limited in scope and extent. There is potential for
commercial exploitation, but opportunities to obtain investment are limited
(Masum & Singer, 2010). The Technology Innovation Agency is funded by the
Department of Science and Technology to support and enable technological
innovation to achieve socioeconomic benefits for South Africa; however, its
health sector portfolio has so far not included IVDs.
Current national health priorities are HIV/AIDS, TB, screening for cervical
cancer and misuse of alcohol. The HIV prevalence rate is approximately 10.6%.
(17% for people aged 15–49 years), with about 5.21 million people living with
HIV/AIDS (Statistics South Africa, 2009), and HIV/AIDS is the leading cause of
death (28.8%). The estimated TB incidence during 2009 was 490 000 (970 per
100 000 population) (WHO, 2010a). It is estimated that 76% of incident TB
cases are detected and notified. The emergence of drug-resistant forms of TB
41
and HIV has worsened the situation. Other infections of note include sexually
transmitted infections, upper respiratory tract infections and, in some regions,
malaria. A measles epidemic commenced in late 2009, with over 10 000 cases
notified in the first 6 months of 2010 (National Institute for Communicable
Diseases, 2010a).
South Africa has a mixed system of health care, incorporating public, private
and traditional healers. Public-sector care is free at the primary level. Both the
public and private sectors have expanded in recent years. The mining industry
also provides health care for its employees. Estimated health-care spending
per capita (PPP) is US$ 869, and estimated Government health-care spending
per capita is US$ 364 (WHO, 2010b). The private sector provides tertiary care to
patients from countries in the region where high-quality care is not available.
The major provider of diagnostic services at the primary health-care level is
NHLS, a non-profit-making organization established by an Act of Parliament.
There are also commercial laboratories providing to the private sector. NHLS
encompasses a national network of 265 pathology laboratories throughout
the country. The services offered include consultation on specimen collection
and management, testing and disposal, and interpretation of results. NHLS
provides laboratory diagnostic services (e.g. surveillance studies) to the
Department of Health, provincial and district hospitals, primary health-
care clinics and other state institutions (e.g. prisons). It also offers a referral
diagnostic service to private-sector health-care providers for less frequently
requested tests and expensive tests. During 2009 NHLS performed 2.95
million CD4 count tests, 1.2 million HIV viral load tests and 244 685 diagnostic
HIV-1 PCR tests (National Institute for Communicable Diseases, 2010b). Over
3 million diagnostic microscopy tests for TB were performed and a further
800 000 TB cultures using a commercial test kit (Erasmus et al., 2010). New
molecular technology to test for TB drug resistance was recently introduced at
considerable economic cost.
Regulatory control
The South African National Accreditation System gives formal recognition that
laboratories, certification bodies, inspection bodies, proficiency testing scheme
providers and GLP test facilities are competent to carry out specific tasks. It is
responsible for the accreditation of certification bodies to ISO/IEC 17021, ISO/
IEC 17024 and 65 (and the IAF interpretation thereof), and laboratories (testing
and calibration) to ISO/IEC 17025. Inspection bodies are accredited to ISO/IEC
17020 standards. GLP facilities are inspected for compliance to Organisation
for Economic Co-operation and Development (OECD) GLP principles. However,
there are no specific regulatory requirements regarding diagnostic tests.
Within NHLS, procurement decisions are often made centrally, sometimes with
in-house validation before awarding of tenders. There are no such limitations
for private laboratories. It is a competitive market, with some tests having FDA
approval or CE marking. A new South African Regulatory Authority for Health
Products has been proposed to replace the Medicines Control Council.
42
The IVD market
The South African IVD market has expanded over the past 7 years.
Revenue for 2009 was estimated at US$ 64 million. This is forecast
to rise to US$ 98 million by 2016, at an estimated compound annual
growth rate (CAGR) of 6.3% (GBI Research, 2010). However, economy
measures within NHLS to reduce the numbers of tests performed may
reduce growth. The largest sector of the commercial market is clinical
chemistry,6 followed by immunochemistry.7 The fastest-growing areas
are infectious immunology8 (8% CAGR) and genetic testing (8.2% CAGR).
Over 20 IVD marketing companies operate in South Africa. The market
is dominated by products from large multinationals with manufacturing
capacity based in industrialized nations (Table 11) (GBI Research, 2010;
Competition tribunal of South Africa, 2006).
Table 11 Share of South African IVD commercial market by value

Company Estimated
market share (%)
Abbot 39
Roche 26
Beckman Coulter 9
Bayer Diagnostics 9
Siemens/DPC 7
Dade Behring 2
Ortho Clinical Diagnostics 2
Others 6
There has been consolidation of IVD companies, with a number of mergers and
acquisitions. Alere Inc. (formally Inverness Medical Innovations) acquired two
South African IVD manufacturing companies in 2008, one of which appears to
have ceased trading.
A number of in-house assays are used in the larger hospitals and research
institutions. These are mainly molecular tests (PCR) developed for specific
pathogens or conditions.
In-country IVD manufacturing capacity
Local IVD manufacturing capacity is restricted to simple diagnostic technologies

for malaria, HIV, schistosomiasis, HCG, hepatitis B surface antigen (HBsAg),
syphilis, CD4 S/P, bilharzias, and some pregnancy tests and urine dipsticks.
6 Tests, reagents and instruments for measuring enzymes, metabolites, electrolytes, sugars,
lipids, proteins and small molecules in body fluids (not including immunoreagents).
7 Tests, reagents and instruments for analysing proteins, hormones, drug moieties and non-
infectious diseases.
8 Tests and reagents using antibody–antigen reactions to diagnosis bacterial or viral infections.
43
Two companies manufacture on a large scale and export to the global market.
Vision Biotech, previously an independent privately owned company, was
acquired by Inverness Medical Innovations in 2008 and rebranded as Alere
Healthcare Pty in 2010. ICT Diagnostics also sells rapid tests for infectious
diseases to the international market.
R&D capacity
South Africa has a thriving medical research community attracting national

and international funding, particularly for HIV and TB. Activities include the
evaluation of new diagnostics tests. However, translational research in the
area of diagnostic test development has been very limited.
The educational sector includes 22 universities, including 6 technology

colleges and 8 medical schools.
NHLS incorporates the former South African Institute for Medical Research, the
National Institute for Virology and the National Centre for Occupational Health
and undertakes research in collaboration with the university sector.
R&D is also undertaken by local companies such as Vision Biotech and as

partners in multinational companies. Examples of this include Roche Products
(Pty) Ltd, which contributed to a new test for TB and other mycobacteria found
in the South African population, and QuantuMDx, an international company
seeking to develop novel point-of-care molecular platforms (the South African
branch of this company closed during 2010).
5.2.3 Kenyan Medical Research Institute

In this example we present a product development initiative at the
Kenyan Medical Research Institute (KEMRI). In this initiative, investment
by the Kenyan Government and an international donor succeeded in
establishing manufacturing capacity, but reliance on a small local market
and a single technology proved to be an unsustainable business model.
In addition to other sources, information has been distilled from a case
study funded by the Bill & Melinda Gates Foundation and published in
a supplement of BMC International Health and Human Rights (Simiyu et al.,
2010).
KEMRI was established in 1979, growing out of the East African Medical Institute
that had been established 6 years earlier. It is part funded by the Kenyan
Government and has also received funding from a number of international
collaborating partners, including the Japanese International Cooperation
Agency (JICA). Research on diagnostic kits began during1998 with the
assistance of JICA, and a test for hepatitis B was developed to screen blood
collected for transfusion (Okoth et al., 1999). The test was initially produced
on a small scale for local use, but in 2005 work started on construction of a
manufacturing facility that would permit production on a commercial scale.
The plant was co-funded by JICA and the Government of Kenya and opened in
2007 to produce two kits based on particle agglutination technology (hepatitis
44
B and HIV). Following a change in the WHO recommendation on testing
blood products, agglutination tests were dropped in favour of enzyme-linked
immunosorbent assay (ELISA)-based technologies. The Kenyan Government
duly stopped purchasing the KEMRI test, leaving KEMRI without a market
for its product. Attempts have been made to diversify into other products,
including rapid immunochromatographic tests and a disinfectant. However,
KEMRI was dealt another blow with the levelling of corruption charges against
its former director and other senior figures by the Kenyan Anti-Corruption
Commission. KEMRI is a founder member of ANDI and, although not currently
used, it is hoped that the manufacturing facility and the lessons learnt may
provide foundation for future initiatives.
6. Challenges
There are considerable obstacles to be overcome if access to diagnostics in
developing countries is to be improved. Unfortunately the barriers to successful
and sustained local IVD production are high, and there are many examples of
failed initiatives. Examples of problems reported by test developers include
the following:
• blocked by lack of access to intellectual property – e.g. access to intellectual
property blocked when company underwent acquisition;
• market flooded by cheap and low-quality imports;
• external R&D funding withdrawn from test developers because of quality
issues;
• test discontinued following acquisition of company;
• rationalization of product lines following acquisition (changed site of
manufacture);
• unable to attain sufficient finance;
• technology did not meet stringent product specifications;
• inadequate stability of reagents for tropical climate;
• unable to compete with existing procurement arrangements.
There was a consensus among stakeholders consulted during this project that
current business models do not address the needs of vulnerable populations
and that new business models for diagnostics are essential.
The following views were expressed during consultation with stakeholders:

“There is a poor understanding and acceptance of value of diagnostics.
This is often a consequence of inadequate diagnostics.”
“The private sector is not responsive enough to the needs of developing
countries. Governments and multinationals should take the initiative to
address public health needs in a specific timeframe so as to mobilize
effectively resources and capabilities for action. Developed country
manufacturers must take the lead and establish partnerships in
developing countries. South–south partnerships should be encouraged,
as the north is not responding adequately to the needs of developing
countries.”
45
“Traditional business models might work for HIV/AIDS, malaria and TB
but will not work for other neglected diseases.”
“Poor market incentive for some diagnostics products means existing
models do not work for low- and middle-income country needs.”
“New business models are essential to provide manufacturing capacity
through public–private partnerships in order improve access to medical
technologies. They should encourage test development in developing
countries. There is a need to change the culture of companies in the
developed world and to have them work more with companies in the
developing world in the area of R&D.”
“There is a substantial need for new business models as the existing
ones are insufficient and inadequate. It is often the case that it is
cheaper to import tests from abroad than to actually purchase the local
ones. In addition, the perception that the latter products are of worse
quality is common.”
“The focus should be on market and financial issues as they remain the
most important hurdles facing technology transfer for local production.
Small innovative companies are eager to take risks even for small
awards, but in the dominant business model, it doesn’t work when the
risk is higher and the awards lower.”
“Although South Africa has good capability for local production and
many ideas are created, there are still few ways forward to develop new
products. Unfortunately, there is a tendency of ‘exportation’ of the best
scientists of South Africa to the north, where they get better incentives
for work. The country lacks a venture capital environment. Human
capacity development is very important.”
“Diagnostics is still a small part of the pharmaceutical sector’s overall
business. It doesn’t rank sufficiently high on the health agenda of many
governments.”
“Local production will not solve all the problems. The importance of
diagnostics needs to be further emphasized.”
“Technology transfer should be framed in terms of: (i) manufacturing,
(ii) R&D, and (iii) access per se. Governments have a crucial role in
decisions and they should reconcile priorities between these three
areas. More partnerships need to be established between stakeholders
and that this requires a change of culture in the developed world to
foster more collaboration with developing countries.”
“Involvement of governments is of crucial importance as they provide
the bulk of medical care in developing countries. They thus need to be
made more aware about the implications of lack of access to diagnostics
on the future public health situation in their countries and economic
prospects.”
46
“There is lack of clarity on roles of industry, government’s ministries,
NGOs, WHO and other agencies – in general there remains insufficient
collaboration.”
A number of specific deficiencies were identified during this project:
6.1 Financial and market concerns

• Financial return: In the commercial sector decisions are based on rational
risk–reward calculations. Financial returns are lower in diagnostics than in
other sectors of the pharmaceutical manufacturing industry, such as drugs.
The market is smaller, and both profit margins and the volume of sales
are reduced. Product life is also shorter, as new replacement technologies
are adopted. IVD companies have remained smaller in size than the large
drug-based pharma companies, and consequently investment in R&D and
manufacturing capacity is on a more modest scale. Additional concerns
arise from the ability of developing countries to purchase IVDs and the
need to suppress pricing to levels affordable by the world’s poor.
• Commercial interest: 80% of the global diagnostics market for infectious
diseases is in the developed world. Consequently, the successful companies
tend to focus on that market, as that is where the highest demand exists.
There is not sufficient financial incentive to introduce production in
developing countries – hence, the dialogue with external manufacturers
can be of limited effectiveness.
• Investment opportunities: Poor market incentives dissuade investment
from the commercial sector. Venture capital financing is rarely available
in developing countries (Masum et al., 2010). Ownership of intellectual
property in the form of patents or know-how is usually required to lever
investment funds.
• Market research: There is a lack of market research, market data and market
segment analysis on which to base investment decisions. Better forecasting
models are needed to increase efficiency of local production and reduce
costs.
• Government commitment: There is a lack of commitment of governments in
developing countries to R&D and the manufacture of health products.
• Political will: The political will to facilitate local production and purchase
local products is lacking, and in some countries local goods are presumed
to be inferior to imported goods.
• Freedom to operate: Non-profit-making manufacturers, such as those
attached to government-run institutions, may not be permitted to engage
in commercial activity.
• Access to market: The local market may be inaccessible due to competing
suppliers offering cheaper imports, a wider range of goods or in some cases
inducements to secure contracts.
• Market value: The local market may not support manufacture on a cost-
efficient scale. The market may be distorted by the distribution of devices
by international agencies at reduced cost or donated at no cost.
• Currency fluctuations: In some countries unstable currencies and fluctuating
exchange rates introduce additional financial risk.
47
• Acquisitions and mergers: Where companies merge with or are bought by
large multinational companies, local control over products lines may be lost.
There have been cases of local production of IVDs for infectious diseases
being discontinued due to consolidation by the parent company following
acquisition.
6.2 Intellectual property

• There is a tension between the need to protect intellectual property and the
need to exploit knowledge. Protection of intellectual property or know-how
is seen as vital by test developers who rely on external investment from the
commercial sector. Similarly, some noncommercial investors and funding
bodies within academia expect and encourage patent protection. However,
restricted freedom to operate (denied access to patented technology) can
disrupt development or delay implementation.
• Intellectual property for IVDs may apply to the exploitation of biomarkers
and the technology platform used to detect them. Licensing of technological
know-how may be required.
• Small companies or institutions that have developed new tests or platforms
may not have the funds to take out and maintain patents, and they may
not be willing to collaborate with other organizations (especially larger
companies) because of a fear of being exploited and losing their intellectual
property to another company. There is a lack of knowledge and finance
to obtain intellectual property protection and therefore a lack of shared
information among test developers.
• There is difficulty in finding the appropriate people in large multinational
companies to speak to, which discourages collaboration.
• Intellectual property may influence access to diagnostics in developing
countries, as the price barrier is often associated with intellectual property.
• The relatively small revenue from diagnostics and the high expense of
maintaining a patent means that intellectual property protection may be
sought in a restricted number of countries rather than globally.
• There is a lack of a clear inventory of existing devices and related intellectual
property.
• Patent attorneys may be overzealous in their approach when recommending
protection of intellectual property.
Box 3 Case study
The difficulties and delay that may by caused by intellectual property

problems were illustrated during transfer of technology by PATH, a non-profit-
making organization, to a company in India. PATH has developed a rapid test
for gonorrhoea using monoclonal antibodies from a small/medium-sized
enterprise based in the United States. When PATH was planning the technology
transfer to the Orchid Group of diagnostic companies in Goa, India, the United
States company was acquired by a third party, another United States-based
commercial company. The resulting intellectual property issues delayed the
transfer of the technology for this test for over 3 years.
48
6.3 R&D
• lack of government commitment;
• lack of financing and capital investment;
• lack of market research, awareness of local needs and target product
profiles;
• lack of skilled personnel, reflecting the lack of career opportunities and
many research scientists from developing countries seeking employment
overseas;
• translational research is not highly esteemed in the international academic
community, there is no voice from low- and middle-income countries, and
there is a lack of a critical path for success;
• lack of access to well-characterized samples;
• lack of access to equipment and specialist facilities;
• lack of access to reagents;
• lack of access to technology platforms (know-how or patent-protected).
6.4 Manufacturing capacity

• lack of financing;
• lack of GMP capacity and lack of expertise in ISO manufacture, packaging
and distribution;
• lack of expertise – skilled local workforce, staff for running, maintenance
and repairs;
• lack of infrastructure – power supply, location, transport, regular flooding;
• inadequate and unreliable supply of basic components – pipettes,
basic supplies, import duty associated with supplies, biological supplies
(antibodies, antigens, importing issues), production supplies (packaging,
labelling); peripheral supplies can be very expensive to buy locally, resulting
in the final product costing too much to be competitive in the market.
6.5 Approval and regulatory control

• Lack of regulatory control:
–– lack of enforcement permits sale of competing low-cost poor-
quality tests;
–– lack of capacity to regulate diagnostic products developed
locally;
–– lack of clear guidelines on how to evaluate diagnostics to ensure
quality;
–– lack of availability of quality control/challenge panels with which
to assess quality and identify fake tests;
–– reliance on approvals by external regulatory authorities (e.g.
FDA) – such approvals may not be focused on suitability and
adaptability to developing country settings.
• Lack of harmonization:
–– confusion and lack of harmonization make registration in multi-
ple markets costly and slow;
49
–– harmonization of existing procedures would allow buyers to
choose tests based on a rigorous and universal regulatory
system;
–– manufacturers have to interact with multiple regulatory agencies
and notified bodies at high cost, and many smaller companies
do not participate in global discussions on diagnostic regulation
and harmonisation efforts;
–– terminology and nomenclature need to be harmonized.
• WHO prequalification is seen as a step in the right direction, but it has long
timelines and duplication with other agencies and does not include all
relevant products.
7. Measures to facilitate technology

transfer and local manufacture
In addition to mapping current obstacles to local production, a number of
measures to facilitate technology transfer and improve access to diagnostics
in developing countries were identified during this project. Prominent among
these was the need for advocacy.
To influence public policy and resource allocation and ensure a more favourable
climate for diagnostics R&D and manufacture in developing countries, it is
necessary to enhance the awareness of national and international bodies to
the health, social and economic benefits of improved access to diagnostic
tools. It is important that governments understand the impact of a failure to
diagnose and control an infectious disease, on communities and on national
outputs and economies. Governments must be persuaded that this is not only
about disease control but also about the future of their country, including its
economy.
It is important that the international community appreciates the needs of

the diagnostics industry and recognizes that there are substantial differences
between this sector and those dealing with drugs and vaccines.
Advocacy is needed to inform the pharmaceutical industry of the importance of

tests for infectious diseases and of the opportunities to work with developing
countries.
Most health care in developing counties is provided by the governments, and

so it is vital to involve the governments in these discussions. There should
be integrated government policies across ministries of health, science and
technology, trade and finance to promote local diagnostics industry.
Successful initiatives should be celebrated, and countries with existing political

commitment cited as champions or models.
50
Advocacy is needed for increased investment in R&D, technology transfer and
manufacturing capacity by national governments, international donors, and
commercial and non-profit-making organizations. Collaboration (north–south
and south–south) must be nurtured, including commercial/noncommercial
partnerships.
Advocacy is needed regarding regulatory issues that must be addressed at the

transnational level, with input from developing countries and test developers.
Stakeholders consulted during the project made a number of suggestions for

enhancing technology transfer and manufacturing in developing countries:
• New business models: Traditional market-led business models have largely
failed to address the health needs of the world’s poorest populations.
For manufacturing in developing countries to be sustainable, alternative
strategies by which to attract investment are required. These include
partnership between the commercial and noncommercial sectors;
partnership between small local companies and larger international
commercial companies; and social business models/social entrepreneurship
programmes. R&D need not always be carried out together. At the moment,
both the research and the development are commonly taking place in the
developed world. Alternative models might be applied, where in some
circumstances it would be beneficial for the initial research to continue in
the developed world but to move the development and manufacture to
the developing world. Market guarantees, market subsidies, prize funds
and market aggregation mechanisms should be explored as a means of
lowering barriers for entry to the market.
• Improved regulatory climate: Current political will should be exploited to
increase regulatory enforcement of diagnostics to increase transparency
and encourage commercial entities to participate in local production.
Countries can seek collaborations with larger regulatory bodies for guidance.
Harmonization must be encouraged, with support for international and
regional initiatives. A repository of regulatory standards should be created.
• Market research: Thorough market analyses should be undertaken to explain
the market demand, pricing, regulatory environment, manufacturing
capacity and distribution networks in countries (roadmap to market entry).
Such analysis should be made readily available to IVD manufacturers and
potential investors.
• Appropriate technologies: Normative guidance on appropriate product
specifications of diagnostics should be made available to test developers
and manufacturers. Each disease and syndrome should have a target
product profile.
• GMP: Ensuring that facilities are using GMP will require skilled staff who
are provided with regular training, guidelines and standard operating
procedures and audit of facilities by local bodies to ensure compliance.
A training team should be established to build capacity for GLP/ISO
manufacture in developing countries. Workforce training programmes
should be established (e.g. master’s degree in production/manufacturing
or distribution and marketing).
51
• Quality control: Panels of test samples should be made available to enable
purchasers and users of diagnostic tests to monitor quality and detect fake
tests. Manufacturers should have a role in making panels available to the
customer.
• Communication and collaboration: A forum should be sought to facilitate
collaborative problem-solving during R&D instead of competition. An
information clearinghouse might be established for dissemination of
market analysis, technical briefs, policy briefs and intellectual property
relating to diagnostics for developing countries. Consideration should be
given to the creation of a global diagnostics association for test developers
and manufacturers.
• Intellectual property: Advice and training should be made available regarding
intellectual property protection and licensing procedures. Information on
patents and the countries where they apply should be collated and made
accessible, with regular updates provided. Greater transparency should be
encouraged. Open-platform systems, where access to technology is not
restricted by intellectual property, would accelerate uptake of technology
and its application to multiple diseases. Companies should be encouraged
to cooperate on public health products.
• Coordination: the respective roles of international bodies such as WHO, the
United Nations Programme on HIV/AIDS (UNAIDS) and the various funding
and regulatory bodies should be clarified. Clear leadership and avoidance
of duplication is required.
• Guidance: A roadmap should be complied for technology transfer specific
to diagnostics, based on previous successful examples.
8. Recommendations
This report makes a number of recommendations. These are focused mainly
on the role that international organizations working in partnership with
others can take with respect to transfer of technology and local production of
diagnostics in developing countries.
Three major approaches need to be taken to promote, support and develop

the transfer of technology and local production:
8.1 Promote
To promote technology transfer and local production as a means of improving
access to diagnostics:
• Advocacy should be undertaken to:
–– inform the pharmaceutical industry of the importance of diag-
nostic tests for infectious diseases and of emerging markets in
developing countries;
–– ensure the international community appreciates the needs of
the diagnostics industry and recognizes that there are substan-
52
tial differences between this sector and those dealing with drugs
and vaccines;
–– influence public policy and resource allocation and ensure a
more favourable climate for diagnostics R&D and manufacture in
developing countries;
–– showcase successful initiatives – countries with good models
and political commitment for technology transfer and local pro-
duction should be cited as champions.
• Thorough analysis of the potential market should be undertaken and made
available to test developers, potential investors, international donors and
local stakeholders.
• Capacity should be enhancing within developing countries to use new
diagnostic and manufacturing technology. A clearinghouse should be
set up to facilitate communications regarding training and investment
possibilities.
• Excellence in diagnostic expertise should be recognized. A professional
career path should be established and made accessible to those working
in developing countries. Workforce training programmes should be
established (e.g. postgraduate degrees in diagnostics R&D, diplomas in
production/manufacturing or distribution and marketing).
8.2 Support
To support technology transfer and local production:
• Guidance on required test specifications should be provided. Normative
guidance on appropriate product specifications should be made available
to test developers and manufacturers, including guidance on pricing.
• A critical pathway for technology transfer to developing countries for the
production of diagnostic tests should be determined. Normative guidance
on technology transfer activities and how to set up a GMP facility should be
published, with examples of best practice.
• The tension between the need to protect intellectual property and the need
to exploit knowledge needs to be recognized and addressed:
–– Information on patents and the countries where they apply
should be collated and made accessible, with regular updates
provided.
–– Advice and training should be made available regarding intellec-
tual property protection and licensing procedures.
• Capacity building for manufacture is required:

–– A training team should be established to build capacity for GLP/
ISO manufacture in developing countries.
–– Panels of test samples should be made available to enable pur-
chasers and users of diagnostic tests to monitor quality and
detect fake tests.
• Capacity building must be supported to increase the number of stringent

regulatory authorities in developing countries.
53
8.3 Develop
• To develop new models and mechanisms to enhance technology transfer
and local production:
–– New business models and approaches to financing and market-
ing of diagnostics must be created and sustained:
–– The models must include innovative mechanisms for protecting
intellectual property, while maximizing access to new technolo-
gy in developing countries.
–– Alternative financing initiatives must be pursued as a means of
lowering barriers for entry to the market, including market guar-
antees, market subsidies, prize funds and market aggregation
mechanism.
–– Incentives for north–south and south–south exchanges and part-
nerships must be explored.
• Regulatory issues must be addressed at the transnational level, with input

from developing countries and test developers:
–– Regional harmonized regulatory standards should be created.
–– Harmonization and transparency must be encouraged, with sup-
port for international and regional initiatives.
–– A handbook or “how to” manual to obtain regulatory approval in
each country should be developed.
• Consideration should be given to the creation of a global diagnostics

association for test developers and manufacturers, similar to IFPMA and
with a code of conduct.
• A centre and forum for global diagnostics should be established to
coordinate, collate and distribute information and encourage collaboration
and harmonization. An information clearinghouse should be set up for
dissemination of market analysis, technical briefs, and policy briefs relating
to diagnostics for developing countries, and to facilitate identification of
potential partners in country.
• A generic model for health technology assessment for diagnostics should
be established to allow developing countries to determine whether a new
diagnostic technology addresses a country’s public health needs.
54
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Annex I: Workshop attendees
Ahmed Abdel Latif, ICTSD
Kathy Athersuch, Médecins Sans Frontières
Maximiliano Chab, ICTSD
Xingyu Chen, Department of International State Food and Drug Administration,
China
Peter Chun, EASE-Medtrend Biotech Ltd
Elisabeth Downe, LSHTM
Robinson Esalimba, WHO, PHI
Brian Goemans, Medical Devices to Market
Javier Guzman, Policy Cures
Philippe Jacon, Becton, Dickinson and Company
Marco Krieger, Fiocruz
Jean-Francois de Lavison, Ahimsa Partners
Tony Lee, NewScen Coast
Ruth McNerney, London School of Hygiene and Tropical Medicine
Hollis Miles, NHLS, South Africa
Zafar Mirza, WHO, PHI
Francis Moussy, WHO, TDR
Rosanna Peeling, London School of Hygiene and Tropical Medicine
Sagie Pillay, NHLS, South Africa
Freddie Mae Poole, FDA
Albert Poon, independent expert on medical devices
Bill Rodriguez, Daktari
Pedro Roffe, ICTSD
Roger Rosedale, Microsens Medtech Ltd.
Padmashree Sampath, UNCTAD
Henk Smits, Royal Tropical Institute (KIT)
Anthony So, Sanford School of Public Policy, Duke University
Natarajan Sriram, Tulip Group – Orchid Biomedical Systems
Gina Vea, WHO, PHI
Bernard Weigl, PATH
Marta Wojtczuk, ICTSD
Amy Wong, consultant
56
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Intellectual R&D, Technology Monitoring and

Property and Trade Innovation Improving Access Financing Reporting

Editing and design by Inís Communication – www.iniscommunication.com

WHO Library Cataloguing-in-Publication Data

Increasing access to diagnostics through technology transfer and local production.

ISBN 978 92 4 150237 5 (NLM classification: WB 141)

Photo: WHO /Harold Ruiz

© World Health Organization 2011

1. Background and context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2. Objectives and methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

3. The diagnostics landscape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

4. Opportunities and absorptive capacity for R&D and manufacturing of

5. Technology transfer to developing countries . . . . . . . . . . . . . . . . . 37

7. Measures to facilitate technology transfer and local manufacture . . . . . 50

Annex I: Workshop attendees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

High-quality diagnostic technologies are available for infectious diseases

1. Developing countries have variable capacity for diagnostic research and

3. Successful partnerships have involved small and medium-sized compa-

4. In spite of these successes, many obstacles to technology transfer and

5. Opportunities to increase technology transfer include:

• increased political will and recognition of the value of diagnostics at a

Based on the findings above, a number of steps must be taken to promote,

GLP, good laboratory practice; ISO, International Organization for Standardization.

The plan incorporates eight elements:

This report makes a number of recommendations. These are focused mainly

High-quality tests for infectious diseases are readily available in most

Transfer of health-related technologies has been credited with the potential

2.1 Project objectives

2. Analyse the global trend of technology transfer and local production

3. Conduct stakeholder interviews and focus group discussions on access of

2.2 Project activities

2. Survey of technology transfer and local production of diagnostics in

3. Assessment of opportunities and barriers to technology transfer and local

4. Stakeholder consultation with regard to technology transfer and access to

5. Compilation of evidence and stakeholder opinion on technology transfer

6. Generation of recommendations for improved access to diagnostic tests

A workshop, Dialogue on Technology Transfer for Local Manufacturing

Case studies were undertaken to illustrate the challenges and to exemplify

3. The diagnostics landscape

3.1 In vitro diagnostics commercial market

Another feature of the diagnostics market that is different from medicine

Projected number of tests (full data not available).

Figure 1 Number of Mycobacterium tuberculosis drug susceptibility tests

Molecular test (line probe assay)

According to a report produced by Global Business Intelligence (GBI)

range of industries to the business community. See http://www.gbiresearch.com/.

Estimated IVD revenues in 2009 ($ millions)

Histology and cytology Genetic testing Clinical chemistry

Source: Data from GBI Research (2010).

Source: Data from GBI Research (2010).

of care experienced by these populations can vary widely, from primitive

clinical outposts to large centralized laboratories. Also, reduced access may

be experienced by women and other vulnerable groups due to economic

or social disadvantage. For patients not covered by insurance schemes,

Source: Data from GBI Research (2010).

In less developed countries, private diagnostic laboratories have been

Country Diagnostic service provision

Private laboratories provide a service to the private health clinics and

3.3 Demand-side priorities and gaps