The 1,000 small private diagnostic labs in southern Italy, who are used to charging 2 to 3 times as much as their counterparts in Northern Italy, are in for a rude shock, says Dr Angelo Gironi, head of CAM Centro Analisi Monza, one of the largest private lab in Lombardy.

Dr Gironi says: “ A month ago the health minister asked to Italian medical scientific societies to elaborate a document to introduce specific rules and requirements a laboratory must satisfy by the end of 2009. He wants to change the situation in southern Italy, where many labs run too few tests to assure a good quality control and reliable results. Many labs will close or merge. The new law is likely to set a level of at least 300,000-400.000 tests a year."

He says that today the two markets are completely different with 1,000 labs in the south and 50 big private diagnostic labs in Northern Italy. The State will fix the amount for tests.  If some regions in the south decide to pay more, they will have to use their own budget.

The changes should lead to rapid consolidation. CAM Monza, where 3i backed Labco has a 20% share, expects sales of €22m-€24m in 2009. Dr Gironi is looking at how to work with southern lab groups and he is also involved in a lab project in Libya.

In Lombardy private labs make up 30-40% of the market, but receive tariffs which are on average 20% less than the public sector. operators The Switzerland who recently faced an average reduction of 17% in their price tariffs: “I know the Swiss market and believe me they could cut the prices and they would still be higher than what we get in Northern Italy!”