Medical lab duopoly
Two companies increasingly dominate the US medical lab businesses, namely LabCorp (Laboratory Corporation of America) and Quest Diagnostics. These companies perform blood, urine, and other diagnostic tests for hospital and medical offices, as well as pharmaceutical companies. Both companies can perform over 4,000 tests, from colorectal cancer to chlamydia. Increasingly, they have entered into alliances (managed care contracts) with large healthcare insurance companies, who require doctors and hospital to us their in-own lab source, a fact that has driven many small labs out of business.
The companies keep expanding in new areas, including genomic testing and workplace drug testing. More and more, they manage clinical trials for Big Pharma. They also are expanding internationally. They do so by buying small companies, either regional providers or small specialists. LabCorp had $3.6 billion in sales in the most recent fiscal year. Quest Diagnostics had $6.7 billion in income. Both companies perform over 100 million tests per year. Both are slowly expanding internationally.
Quest diagnostics was spun off from the Corning Glass company in 1997. In 2005, Quest Diagnostics bought LabOne, the #3 independent laboratory company after Quest and LabCorp. It also bought Omega Medical Laboratories. In 2006, Quest bought an immunological diagnostic company called Focus Diagnostics. In 2007, it bought Swedish-based Hemocue. Along with cancer diagnostics company AmeriPath.
LabCorp was founded in 1995, from a merger of National Health Laboratories Holdings Inc. and Roche Biomedical Laboratories, a division of the drug company. It also has a major history of acquisitions, including and Esoterix (2005), U.S. Pathology Labs (2006), Tandem Labs (2008),
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