The new medical reform promotes the accelerated growth of in-vitro diagnostic reagent (IVD) industry. At present, the domestic IVD market sales are about RMB 3.5 to 4.5 billion. While compared to the drug market with sales of RMB several hundred billion, its overall size is relatively smaller. We think that the causes lie in: 1) Unlike market-flooding drugs with high price and windfall profits, reagent kit has a reasonable unit price; 2) Imperfect equipments and personnel in laboratory department of middle and low level hospitals impede a comprehensive inspection; 3) Because drugs is still the major income source of hospitals, the status of laboratory department is ignored. According to the information from the research department, the clinical diagnosis expense occupies approximately 20%-30% and less than 10% of the entire medical expenses in those developed countries and China, respectively, suggesting huge market potential of IVD

With the development of medical reform, the above situation will be changed. At first, the equipments in primary medical units should be improved. We estimate that among the RBM 850 billion medical reform funds for three years, approximately RBM 30 to 40 billion will be invested in purchasing the primary equipments. Laboratory department serving as a support for diagnosis, it is necessary to upgrade the equipments. Secondly, due to the stipulation of zero profit from primary drugs, the income in primary hospitals is immediately decreased. Therefore, laboratory sheet becomes another way to earn money, raising the status of laboratory department. For these reasons, we think that with the development of medical reform, the enlargement of IVD market scale will be accelerated, especially in those important primary hospitals supported by medical reform policy. The detection service will gradually be completed, and the quantity of patients will also be increased, which both is beneficial to the improvement of sales volume of diagnostic reagents and supporting equipments.