The diagnostics sector is shaped by technological, economic and geopolitical forces like almost no other part of healthcare. After years of steady growth, the industry is entering a phase of structural realignment: rising regulatory demands, fragmented reimbursement systems, volatile supply chains and new competitors from local markets and the tech sector are challenging established models. At the same time, pressure is increasing to balance innovation with economic viability. As governments and payers now demand hard evidence, diagnostic procedures must clearly demonstrate their clinical and economic value. Digitalization and artificial intelligence (AI) are reshaping the industry from the ground up. Automated laboratory analyses, scientifically validated algorithms and AI-supported decision platforms are opening new opportunities, but they are also creating new dependencies on data quality, infrastructure and regulation. The year 2026 marks a turning point, with the industry moving between disruption and differentiation, and between technological momentum and structural pressure to adapt.
A current survey by Porsche Consulting paints a clear picture. 73 percent of executives from leading in-vitro and in-vivo diagnostics companies worldwide view external risks such as tariffs, supply chain issues and political instability as the biggest current threat. 67 percent cite reimbursement and market-access barriers as major obstacles to growth. Competitive pressure and technological integration follow at a distance. Dr. Roman Hipp, Senior Partner at Porsche Consulting, notes: “Growth today no longer stems from size alone, but from resilience, market access, and speed.” In this analysis, diagnostics includes both in vitro diagnostics, which refers to procedures, tests and systems that analyze samples outside the human body, and in vivo diagnostics, which includes imaging, functional and sensor-based procedures performed directly on the patient. Combined, they form the backbone of modern prevention, early detection and treatment decisions.
Market access outranks competition
For decades, competition in many regions was shaped by the race for the best products and the most advantageous prices. Today, priorities have shifted toward market access and risk management. In the United States, Europe and Asia alike, regulation, reimbursement and geopolitical stability increasingly determine whether a product reaches the market at all. Executives currently view global risks and uncertainties as their biggest challenge. 67 percent identify reimbursement and market access as decisive growth factors, while only half consider competitive pressure to be the key bottleneck. The real competition now lies between healthcare systems, authorities and payers, rather than between companies alone.
European diagnostics and MedTech providers are particularly affected, as many rely heavily on U.S. revenues. Leading Europe-based medical-technology companies generate more than 45 percent of global sales in the United States, despite only about 30 percent of their workforce being located there. This dependence makes them vulnerable to regulatory and trade-policy changes, such as new security initiatives or value-based reimbursement models in the U.S. healthcare system. Companies need to expand their expertise in market access and pricing, supported by robust reimbursement strategies, evidence-driven data models and proactive engagement with payer-level decision-makers.
Speed as a critical success factor
Alongside external pressure, the industry faces internal inefficiencies. According to the survey, research and development (R&D) and regulatory affairs are seen as the biggest sources of delay: 90 percent of respondents point to these areas as responsible for the most significant time and cost losses. Innovation cycles are shortening, yet many organizations still operate with outdated structures. Regulatory affairs in particular – where complex rules, documentation requirements and approval procedures intersect – often lead to significant delays. One in five executives cites insufficient process digitalization, high costs or slow project management as major hurdles.
Compared with other industries, reducing time-to-market for medical products is one of the strongest value drivers in MedTech. In practice, however, only 35 percent of MedTech projects are completed on time and within budget. Despite record R&D spending, FDA (Food and Drug Administration) approvals have declined by eight to 14 percent per year. The potential for improvement is substantial: standardized toolchains, automated workflows and AI-assisted development can increase R&D productivity by up to 40 percent and significantly shorten development cycles.1 A future-ready R&D model uses generative AI for computer-aided design (CAD), automated clinical trial protocols, intelligent portfolio-monitoring agents and digital compliance assistants. These tools provide real-time transparency, more precise planning and seamless regulatory documentation. Leaders must begin to see research and regulatory processes as an integrated, data-driven end-to-end system instead of a simple sequence of steps. Clear transformation roadmaps, streamlined processes, digital toolchains and targeted upskilling for R&D and regulatory teams are essential.
Localize rather than globalize
Industry growth is shifting towards the Asia–Pacific region. 70 percent of respondents see this region as the most important growth driver, while also identifying it as the area of greatest risk. China sits at the center of this shift. Through national strategies such as “Healthy China 2030” and “Made in China 2025”, as well as tax incentives for R&D, the country has evolved from imitator to innovation engine in under a decade. It now harbors more than 32,000 MedTech manufacturers, has realized a 290-percent increase in innovative device approvals since 2017 and boasts a local share of 97 percent among new product approvals. China has now become the world’s second-largest MedTech market, making it a central arena for global competition. The United States remains economically essential but has become more volatile in political and regulatory terms. Changes to reimbursement structures and new reforms by the Centers for Medicare and Medicaid Services (CMS) increasingly influence pricing and market entry. Growing adoption of private health insurance among the middle class reinforces this trend. Europe shows a very different picture, marked by fragmentation. Diverse reimbursement systems, the complexity of the Medical Device Regulation (MDR) and the In Vitro Diagnostic Regulation (IVDR), as well as the new AI Act, are noticeably slowing down innovation. Instead of relying on global standard strategies, companies need regional market-entry approaches: locally adapted product portfolios, agile go-to-market models and partnerships with hospitals, networks and digital-health platforms.
Digital diagnostics in the spotlight
Few topics influence the strategic agenda of diagnostics companies as strongly as digital diagnostic solutions. 73 percent of respondents consider them the most important trend for the next three to five years, and 80 percent prioritize investments in new technologies and digital tools. The market for AI-enabled medical devices is expanding rapidly. Between 2014 and 2024, FDA approvals for AI and machine-learning systems grew by an average of 44 percent per year. More than 1,200 systems have been approved so far, with 75 percent in radiology, cardiology and neurology.2 At the same time, software-related product recalls are increasing significantly, indicating that digital quality and development processes still require improvement. Digitalization is no longer optional; it is essential for competitiveness and patient benefit. Companies that combine digital innovation with strong reimbursement and market-access strategies gain both technological and economic advantages. The goal is to develop scalable, digitally enhanced diagnostic solutions that offer clear value to patients, providers and payers, backed by strong evidence for clinical effectiveness and cost efficiency.
Four strategic action fields for diagnostics in 2026
Based on the results of the survey, four key action areas were identified that will determine competitiveness and future readiness.
- Reimbursement and risk excellence
Build global competence centers for reimbursement strategies, pricing and evidence generation to reduce reimbursement timelines, improve reimbursement rates and stabilize pricing. - Regional market-entry strategies
Develop market-specific strategies, from localization to partner networks and adaptive sales models. The focus is on shorter time-to-launch, efficient market access and higher regional revenue. - Winning product strategies
Combine digital capabilities with clear monetization models to strengthen innovation, return on investment and market positioning. - Internal enablement
Digitize and automate core processes to shorten development cycles and increase productivity, measured through time-to-launch, budget compliance and efficiency of outcomes.
Orchestrate rather than react
Dr. Roman Hipp summarizes: “The global diagnostics industry is facing a dual transformation: it must go digital without stumbling over regulatory hurdles and act globally without losing local relevance.” More than half of surveyed executives consider their organizations only “moderately prepared”. The willingness to change is present, but implementation is still in its early stages. The industry is not experiencing a gradual shift but a systemic one. Strategies must be adapted to a reality in which access, data and speed determine success or failure. The winners of tomorrow will be those who manage market access strategically, operationalize digital product strategies, eliminate internal bottlenecks and align their organizations toward agility and speed. The future of diagnostics will be shaped not only by technology but by the ability to master it strategically and economically.
Key Takeaways