Market dynamics in radiotherapy

Part
01
of four
Part
01

RadioTherapy Interview Candidates 1

Our research identified at least four Radiation Oncologists, and/or Medical Physicists at each of the following cancer centers; MD Anderson Cancer Center, Houston, The Massachusetts General Hospital Francis H. Burr Proton Beam Therapy Center, Boston, Memorial Sloan-Kettering Cancer Center, Roberts Proton Therapy Center, and UCSF CNL, San FranciscoFor each candidate we have provided a phone number or an email address and entered the information into the attached spreadsheet.

Methodology

To identify the requested candidates we reviewed each cancer center's official website to ensure we were providing up to date name and contact information. We performed a search for the three job titles. We were unable to find anyone with the job title, Radiation Therapy Capital Medical Equipment Procurement for any of the centers. We were able to find Radiation Oncologists at all the cancer centers and Medical Physicists at all but at Massachusetts General Hospital Francis H. Burr Proton Beam Therapy Center, Boston.
Part
02
of four
Part
02

RadioTherapy Interview Candidates 2

Our research identified at least five Radiation Oncologists, and/or Medical Physicists at each of the following cancer centers; Dana-Farber / Harvard Cancer Center, Stanford Cancer Center, UPMC Hillman Cancer Center, S. Lee Kling / Alvin J. Siteman Cancer Center, and University of Michigan Rogel Cancer Center. For each candidate we have provided a phone number or an email address and entered the information into the attached spreadsheet.

Methodology

To identify the requested candidates we reviewed each cancer center's official website to ensure we were providing up to date name and contact information. We performed a search for the three job titles. We were unable to find anyone with the job title, Radiation Therapy Capital Medical Equipment Procurement for any of the centers. Stanford Cancer Center was the only facility that we were able to find any Medical Physicists. The majority of the candidates found are Radiation Oncologists.
Part
03
of four
Part
03

RadioTherapy Overview

While both proton therapy and heavy ion therapy (which is predominantly carbon ion therapy at the present time) show promise, they are exceedingly expensive compared to conventional radiotherapy for cancer. As a result, the creation of new proton therapy centers is currently slowing despite worldwide treatment capacity being extremely limited (one treatment room per 30 million people). Carbon therapy centers are virtually non-existent, only being available in Japan, Germany, Italy, China, and Australia. However, researchers are cautiously optimistic that as the current difficulties in obtaining clinical trial data are overcome that both forms of radiotherapy will become more widespread.
Below is a deep dive into our findings.

PROTON THERAPY

Currently, there are less than 240 particle therapy treatment rooms in the entire world, or less than one room per 30 million people, most of which are for proton therapy. Only 27 proton therapy centers are in the US, with 10 more under construction. Europe also has 27, plus four more in Russia, with eleven more on the way. The vast majority of treatment centers "are far from saturation levels, with only 17 percent of them able to treat on average over 200 patients per treatment room." If the 20/80 rule applies here, that would suggest that only about 19,200 patients are receiving particle therapy ((0.2 x 240 rooms x 200 patients) + (0.8 x 240 rooms x 50 patients)), but that current facilities could potentially handle as many as 48,000 (240 x 200).
New orders for proton therapy equipment has been in steady decline, dropping 20% in 2018, with a total decline of 62% since 2015. Moreover, 100% of the proton therapy orders in 2018 were for single-room facilities, compared to just 40% in 2016. The reason for this is simply cost: A 3-4 room treatment center can cost over $100 million to build compared to $30 million for a single treatment room, making the cost "perhaps more digestible for a smaller clinic." That's still five times the cost of a conventional x-ray radiotherapy unit, however.

This means that while the number of patients that will be reached is still growing, that growth rate has slowed to a crawl. Experts are uncertain about whether this trend will continue or whether orders will pick back up again over the next two years.

In addition to the personnel needed for standard radiotherapy, a proton center needs one to several engineers to operate the cyclotron or synchrotron (the external beam equipment), one or more machinists, more therapists and more time required for the physicists and medical dosimetrists per patient. This increase in the required personnel naturally greatly increases the costs.

The up-front cost combined with greater personnel costs is reflected in the cost of reimbursement: A 2012 study found that Medicare's average reimbursement for proton therapy was $32,428, compared to $18,575 for conventional radiotherapy. At that price, one would expect there to be measurably better results in the clinical trials. However, according to Radhe Mohan, professor of radiation physics at the University of Texas MD Anderson Cancer Center, "Once we started using protons, there were some good results, but there has been no clear and obvious convincing advantage that could be overwhelmingly convincing... we just have not adequately learned how to exploit it fully yet."

Likewise, a 2017 research paper states, "The challenges of PBT [proton beam therapy] in the future mainly include the lack of basic clinical trials, unclear biological effects, immature imaging technology and miniaturization of imaging guidance." However, the authors add, hopefully, "Overcoming these limitations may promote the rapid development of PBT."
Obtaining reimbursement from insurers continues to be a challenge, especially when it comes to getting the clinical trials covered. This creates a Catch-22 situation, where the insurers demand more clinical trials to normalize payment for the treatments but won't approve the clinical trials, at least not quickly enough that the patient is willing to wait. (As Dr. Bill Hartsell points out, a patient diagnosed with lung cancer is unlikely to want to delay the start of his treatment the 4-6 weeks needed to obtain the approval of his insurer for the clinical trial.) One 2017 study found that 32 out of 287 cases were initially denied by insurers. While 97% of those denials were eventually paid, it often took multiple rounds of appeals to accomplish this.

HEAVY ION (CARBON) THERAPY

Carbon ion therapy (aka carbon therapy) is even more up in the air than proton therapy. In fact, while the technique was invented in the US, patients in the US still have no access to it. Currently, Japan leads the pack with five ion centers, with only Germany, Italy, China, and Australia for company. A lot of this has to do with cost: Carbon therapy requires building a $100 million dedicated center, and with the reimbursement challenges, "long learning period," and clinical testing challenges already faced by proton therapy (see above), the financial risks seemingly outweigh the benefits.
That's not to say that carbon therapy is dead in the water in the US. In 2013, the National Institutes of Health’s National Cancer Institute (NCI) created the Planning for a National Center for Particle Beam Radiation Therapy Research (P20) fund to promote the construction of research and treatment centers which will use both proton and ion beams, "including but not necessarily limited to carbon beams." With initial treatments in Germany and Japan showing great promise in treating cancers that have otherwise proven resistant to conventional radiotherapy--and in some cases (like pancreatic cancer), doubling the survival rate--interest in the treatment remains strong. Parties interested in building heavy ion centers in the US include Stanford University, Brookhaven National Laboratory, and Best Medical International.

Note that we did attempt to determine the status of other heavy ion radiotherapy treatments. It appears that carbon therapy is the oldest and most developed type, having been tested in clinical studies as early as 1994. Given that even carbon ion therapy is in its infancy, it is unsurprising that it dominates the available literature.

CONCLUSION

Proton beam therapy, though the data on its efficacy is not as clear as researchers and promoters (or insurers) would like, is nevertheless growing in both the US and Europe, with the total number of treatment centers across both continents expecting to grow from 54 to 75 over the next decade. While growth has slowed over the least three years, experts believe that it could easily grow rapidly if the clinical trial and reimbursement problems are overcome. Heavy ion radiotherapy, which is presently dominated by carbon therapy, is developing much more slowly, with Europe only sporting a handful of centers in Germany and Italy and the US as yet having none. However, the treatment shows great promise in early trials (predominantly conducted in east Asia) and there are several parties interested in constructing carbon therapy centers in the US despite the cost and financial risks inherent in the endeavor.
Part
04
of four
Part
04

RadioTherapy Market Size

Our research indicates that the proton and heavy ion radiotherapy are jointly called particle therapy. The 2018 particle therapy market in the United States and Europe was estimated at $667.83 million and $166.95, respectively. It is expected that the United States proton therapy market will grow at a cumulative annual growth rate (CAGR) of 15%. Below is a deep dive of our calculations, assumptions, and findings.

Methodology

In order to identify the market size for proton and heavy ion radiotherapy, we commenced our research by searching for reports from credible market research firms. Our research revealed that the proton and heavy ion radiotherapy is jointly called the particle therapy market. While there are a plethora of market reports on the particle therapy market, these reports were focused on the global scale and the little snippets provided did not give any insight into the breakdown by region as all the reports were behind paywalls. However, we were able to glean various data points across multiple reports.

We also explored national and regional associations that were devoted to particle therapy or proton therapy such as the National Association of Proton Therapy (NAPT) and the European Particle Therapy Network (EPTN) to see if they had published resources and reports that provided the requested information or at the very least enabled us to triangulate a reasonable estimate. A thorough examination of these organizations' website did not yield any tangible market size data or information.

Due to a lack of direct information on the requested subject matter, we had to defer to the data points we gleaned off of the various particle and proton therapy market report snippets. These data points enabled us to estimate the market size of the particle therapy market in Europe and the United States.

Market size

According to a report by Fior Market Research on the global particle therapy industry, the particle therapy market is segmented into proton therapy and heavy ion therapy, with proton therapy eking 56.90% market share in 2017. In the absence of publicly available reports or information on the size of the particle therapy industry with respect to Europe and the United States, we have used this proton therapy market share to piggyback on the size of the particle therapy market in the United States and Europe based on some assumptions.

The first assumption is that the proton therapy market share remained the same in subsequent years. The second assumption is that the proton therapy market share is uniform across all geographic regions, including the United States and Europe.

EUROPE

According to a report by MicroMarketMonitor, the European radiotherapy market was expected to reach $95 million in 2018. If proton therapy represents 56.9% as stated above, then the overall particle therapy market is:
(95 *100) 56.9 = $166.95 million
The European particle therapy market was valued at $166.95 million in 2018.

UNITED STATES

A report by Valuates, a market research firm, projects that the United States proton therapy market will reach nearly $1 billion by 2025. The market is expected to grow at a cumulative annual growth rate of 15% between 2018 and 2025. Using these data points and an online CAGR calculator, we were able to estimate the 2018 size of the United States proton therapy market.

CAGR: 15%
Final value (2025 market size): $1 billion
Number of periods (2018-2025): 7 years
Initial value (2018 market size): Unknown

Imputing the above values into the online CAGR calculator, the United States proton therapy market was estimated at $380 million in 2018.

If proton therapy represents 56.9% as stated above, then the overall particle therapy market is:
(380*100)/56.9 = $667.83 million

Potential Growth Rate

UNITED STATES

The Valuates report cited above notes that the United States proton therapy market is expected to reach $1 billion by 2025. If the proton market grows to $1 billion in 2025, then assuming the market share of 56.9% still holds, then the overall particle therapy market in the United States will be valued at:
(1 * 100)/56.9 = $1.76 billion

That means between 2018 and 2025, the particle therapy market in the United States grew from 667.83 million to $1.76 billion. Using an online CAGR calculator, we calculated the CAGR between these years.

Final value (2025 market size): $1.76 billion
Initial value (2018 market size): $667.83 million
Periods (2018-2025): 7
CAGR: Unknown

The United States particle therapy market is expected to grow at a rate of 14.85% between 2018 and 2025. The number of particle therapy treatment rooms per ten million people in the United States is also expected to grow from 3 in 2018 to 4 by 2022.

EUROPE

According to a report by MEDraysintell, the number of particle therapy treatment rooms per ten million people in Europe was 1 in 2018. Another report in the series by MEDraysintell projects that the number of particle therapy treatment rooms per ten million people in Europe will double to 2 by 2022. With the assumption that the market size is directly proportional to the number of particle therapy treatment rooms, then the particle therapy market in Europe could potentially double by 2022.
Sources
Sources

From Part 01
From Part 02