Los Angeles, CA (PRWEB) July 31, 2012
During the five years to 2012, revenue in the Toxicology Laboratories industry is forecast to increase 0.4% per year on average to $1.9 billion, including growth of 1.2% in 2012. According to IBISWorld industry analyst Nima Samad, "The majority of industry revenue comes from employee drug testing, so industry performance is directly tied to employment rates." As the American economy suffered from the dual impact of the financial meltdown and housing market collapse starting in 2007, companies began scaling back production and laying off workers. Slow job creation and fewer employed Americans over the past five years led to fewer drug screens taking place throughout the recession, which hurt toxicology labs' revenue and slowed industry growth.
Nevertheless, drug use trends have encouraged more employers to opt for employee drug testing by toxicology laboratories. According to the National Survey on Drug Use and Health, in 2010 (latest information available), an estimated 22.6 million Americans aged 12 or older were illicit drug users. This estimate represents 8.9% of the population aged 12 or older and represents an increase compared to previous years. Additionally, according to the National Institute on Drug Abuse, the total cost of substance abuse in the United States exceeds $500 billion annually. Nearly $200 billion of this total is estimated for illicit drugs. In order to avoid productivity losses, employers have increasingly started relying on drug tests and toxicology laboratories to screen out undesirable employees. According to a 2011 poll by the Society for Human Resource Management and the Drug and Alcohol Testing Industry Association, 56.0% of organizations require all job candidates to take a drug test before employment.
The Toxicology Laboratories industry carries a low level of market share concentration. In general, the industry comprises a multitude of establishments spread across the entire country. As a result, no one firm dominates the landscape. The industry's most significant laboratory company is Alere Toxicology Services Inc. "Despite the industry's low concentration, some consolidation has taken place as many firms were either acquired by existing toxicology laboratory companies or were forced to exit the industry due to slumping demand," says Samadi. Over the next five years, IBISWorld expects industry concentration to remain low given the widespread nature of the industry overall. Some consolidation is expected, though, which may enhance concentration slightly.
During the five years to 2017, expansion will be due to employment growth that creates the need for more drug tests. A slow rise in incarceration rates and drug-related crimes will drive demand for toxicology labs from the law enforcement sector. And demand for toxicology labs from the medical sector will grow due to The Patient Protection and Affordable Care Act. As a result of the healthcare reform, 32 million previously uninsured individuals will gain coverage by 2019. The larger pool of people requiring medical care will push up demand for medical-related toxicology testing. For more information, visit IBISWorld’s Toxicology Laboratories in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This industry receives and independently analyzes samples of biological material for various toxins, primarily drugs. Services include blood testing, saliva testing and urine testing. Employers, the medical community and law enforcement are major purchasers of this industry's services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.