U.S. Lab Sector Globalizes with Foreign Deals

By Ron Shinkman, Editor, Laboratory Industry Report

For the better part of a century, laboratories had been among the most local of health care providers. But in recent decades, that dynamic has taken a 180-degree turn. Quest Diagnostics and LabCorp have taken a lot of hospital and physician office testing business as they have grown nationally. And as the global economy has taken off, labs have not escaped its impact.

In the United States, that means two things: Large multinational corporations that own laboratories in other nations are buying American companies and acquiring either their labs or opening new domestic facilities. Alternatively, those multinational labs are melding their overseas and U.S. operations in unique ways.

If there is any facet of health care delivery in the U.S. that could be globalized in this manner, the laboratory sector is the likeliest candidate. Hospitals and individual physicians can’t easily operate overseas; medical tourism is the most likely example of globalization to be seen in those forms of care delivery. But tissue samples and specimens can be shipped to virtually any place in the world overnight, while test results can be transmitted almost instantaneously via Internet portals.

Some examples of globalization are straightforward: Sonic Healthcare Laboratories, an affiliate of an Australian firm, has had significant operations in the U.S. for years, although for the most part keeps a very low profile here and it keeps testing within U.S. borders. And some deals involve foreign labs gaining a toehold in the U.S. market. On the other hand, much of the evidence of the next wave of globalization is often buried deep in the quarterly and annual financial reports of the publicly traded labs referencing commercialization initiatives outside the U.S.

Even the Centers for Medicare & Medicaid Services (CMS) has been getting into the globalization game with an “International Laboratory CLIA Certification Process” that provides a blueprint for labs operating outside of the United States to legally accept and process samples from the U.S.

For more details on the globalization of the lab sector, see the next issue of Laboratory Industry Report.