Market Overview

Based on sales at contracted service providers and in consideration of the financial performance of major and smaller testing centers, the domestic clinical laboratory testing service market is estimated to be worth 617 billion yen, which is a 2.0% increase from the previous fiscal year.

The market once expanded rapidly between FY2020 and FY2022 during the pandemic, as demand for polymerase chain reaction (PCR) testing surged. In FY2022, however, in-house laboratory testing increased due to reduced National Health Insurance (NHI) points for PCR testing. In FY2023, when the viruses were downgraded to class 5, commissioned testing cases nosedived, reducing the market size. In FY2024, the special pandemic-related demand was subdued overall. Businesses were unable to offset this loss through normal medical and health check-related testing. This led to continuous market shrinkage.

By FY2025, SARS-CoV-2 virus tests had become a regular part of infectious disease testing, indicating that the impact of special demands had subsided overall. In addition to the growing number of contracted tests for general medical care and health checks, there was an increase in high-value added inspections, such as genetic testing and tests for early cancer detection and prevention. In response to rising reagent, logistics, and labor costs, contracted clinical testing providers adjusted contract service prices, including those of existing contracts, to maintain service quality, recruit, and improve working conditions. These changes also supported an increase in market size.

Noteworthy Topics

Business Model Redesign Underway Centered on Optimizing Contracted Service Prices and Automating Testing Processes

Contracted clinical testing providers are experiencing rising costs for reagents, consumables, labor, logistics, fuels, energy, and systems. Additionally, lower specimen density in declining population areas could increase the burden of maintaining the indispensable specimen collection and delivery network. In this context, optimization of contracted service prices is underway, primarily among leading service providers. However, mere price revisions cannot ensure profitability. The key lies in selecting the right combination of strategies, such as reviewing unprofitable contracts, collection and delivery conditions, and improving testing system and facility operation rates.

Large-scale testing centers have adopted AI and/or robotics to automate processes and save labor. However, depending on investment and specimen consolidation status, the timeframe for the effect on revenue differs. Industry structure dynamics are changing as service providers are groping for the allocation of management resources among contracted service prices, logistics, capital investments, and shared features with other companies.

Future Outlook

The clinical laboratory testing service market is mature and has many market participants. However, demand continues to favor major businesses with sufficient facilities, talent, and IT infrastructure. Now that the special demand has mostly been resolved, the market is shifting towards a peacetime demand structure. Large-scale investments by major businesses in automation and process consolidation for comprehensive testing centers are yielding labor savings and improvements in test quality and productivity.

While the impact of changes in demographics and medical care systems varies by region and test range, the market is expected to flatten or show gradual nominal growth due to optimized contracted service prices, and growth in gene tests and preventive medicine-related testing, in addition to basic general testing demand. 

Research Outline