Clinical Understanding of Cancer Has Changed: Reuters

Per this Reuters Article, the deeper genetic information available to oncologists today has the changed the way cancer is identified, tumors are diagnosed and treatments are prescribed.  It is no longer enough to simply identify the organ a cancer has reached and begin treatment.  The new knowledge, while increasing options to keep the disease at bay, has increased the need for genetic testing and specialized knowledge to understand results.   Per the article:   http://www.reuters.com/article/2012/06/06/us-cancer-genome-diagnosis-idUSBRE85500120120606

"Cancers that may look identical under the microscope may actually have very different genetic abnormalities, and therefore, are likely to respond to very different kinds of therapies," said Dr. Mace Rothenberg, senior vice president for oncology at Pfizer. "What is happening is a very rapid evolution in thinking - from one test on one tumor to actually doing multiple tests on one tumor sample."

The positive side is that treatments can be targeted better, the negative side is that it's harder for community hospitals and oncologists outside of major universities to keep pace.  


Kalorama's Personalized Medicine Diagnostics   is Kalorama Information's latest market research report on the industry of tests that identify molecular characteristics of cancer and treatment potential, among other applications. 

Dark Side of A Growing Market: Growing Costs in Another Market

One industry's growth can be in some cases, a severe burden on another industry's growth.  The growth of wound care devices, reported on each year by Kalorama Information in its report (our latest update will be out this month) also means more costs for nursing homes and assisted living care centers that treat the elderly who are more likely to be wounded from accidents or surgeries, and who often take a longer time healing.  

So it is illustrated in this McKinght's Long Term Care Report article.

Much remains to be learned about wounds and how best to treat them. Last year, the Agency for Healthcare Research and Quality awarded the Johns Hopkins Evidence-based Practice Center nearly half a million dollars to investigate state-of-the-art wound care. The center has been tasked with determining what's known about medications, antibiotics, dressings and surgery, and establishing strategies proven to work.
The review will focus largely on lower extremity wounds, which can be complications of leg ulcers and diabetes and be exacerbated by obesity and poor nutrition. But investigators also expect to learn more about other types of wounds, such as pressure ulcers that are seen in long-term care settings.
Across the United States, about seven million people have chronic wounds. About $25 billion is spent annually on their care, according to a study that called this a “snowballing threat to public health.”

The article has a point.  What we present in our report as a key growth time for wound care device makers, which it certainly has been for the past few years, is to public health a 'snowballing threat.'  And that suggests some of the price increases may be tamed in the near future, which will impact revenue growth.

The  reports of many healthcare market research publishers, and Kalorama even at times, tend to be unitary in focus.  Reports show charts of increasing revenues.  We are identifying a market and showing companies the growth potential for new products that they might launch in that market.

But it's critical to understand any given market to know the markets that are adjacent.  Because these are going to be the limiters on potential growth.    In our diagnostic reagent reports are complemented well by our clinical lab services report.  Growth in lab services will mean more reagent sales.  In our report on global medical devices, we take a look at the hospital market and how they are slightly recovering from the recession and the hit on their endowments but still facing payment issues and reimbursement cuts.   Here you can see that although wound care products will grow in coming years, we can't go off the charts with the growth rate because there's only so much the long term care industry and governments will pay.  A good market research effort will require many different industry reports to see the whole picture.

Even for Large Organizations, EMR Switches Can Hurt

For a small physician practice, the change to an EMR or a change of EMRs is fraught with real costs and potential productivity costs.  But EMR changes are costly as well for large organizations, as evident from last quarter's move by a major healthcare system.   Partners in Boston, MA has selected Epic for a massive EMR overall from its internal electronic medical records system to the Epic system with customizations. Partners plans to invest $600 million to $700 million in the new EHR over the next 10 years.  


As indicated in this Fierce EMR story, such a change has not been out without challenges for the organization.  EMR comes with a cost, and last quarter Partners took a 138 million dollar hit in operating income as the result of a switch.  

Kalorama Vaccine Estimates Published in Business Week

Kalorama's estimated numbers for vaccine sales are cited in an article in Business Week regarding the change in leadership at Takeda Pharmaceuticals.  The basic message: mixing a high-growth product like vaccines with high-growth emerging markets is  a winning strategy.  

The worldwide vaccines market excluding North America, European Union members and Japan, probably expanded 11 percent to $6.78 billion last year and will increase about 10 percent annually for the next five years, researcher Kalorama Information said.

Slightly higher growth than developed markets at 8-9%.  The citation is timely because Tadataka “Tachi” Yamada, the new head of Takeda, wants to direct efforts to these countries.  
Article: http://www.businessweek.com/news/2012-05-31/gates-foundation-veteran-yamada-retools-drugmaker-takeda-health

If the Device Moves, RFID Wins Out

It's great to have devices that move with a patient to offer care and monitoring.  But such devices create staff concerns.  When medical devices become mobile, when they are utilized in patient care, protecting them and keeping track of them becomes more important.  For makers of RFID, this problem means on the heavy medical asset front they can win the struggle against cheaper barcode solutions.

Some features of an RFID, identification and counting, are easily replicated on a simple barcode.  But more advanced features - location, distinguishing an authorized person from an non authorized person, are more amenable to RFID.  This is where Kalorama Information finds the higher relative cost of an RFID tag versus a standard barcode becomes important.  For some high end devices, Radio Frequency Identification technology (RFID) is used.  Medical asset tracking is one of the top areas where RFID offers  solutions for the main segments of the healthcare industry—hospitals and nursing homes, pharmaceutical manufacturers, distributors, and pharmacies. Kalorama, in its report on RFID technologies, identifies the market for RFID opportunities in the healthcare industry focusing on four
general market segments, in addition to asset tracking:
• Pharmaceutical manufacturing and distribution/blood product distribution and
tracking
• Medical staff identification and tracking and patient identification and tracking
• Medical device RFID use
• Other areas including medical documents and patient records

Medical asset tracking, however, is the largest category in healthcare, with companies like 3M and Alien in the mix.  Kalorama finds that RFID is useful when the device is valuable and mobile such as a patient monitor or infusion pumps, knowing its location is important. If it's just an inventory concern, those device tend to see barcode use.  Barcode is still used far more in hospitals than RFID due to expense.  .

Hospital Revenues an Indicator of Medical Device Industry Revenue

As key buyers of devices, how hospitals perform will provide some indication of what  those who sell medical devices are up against.  In recent years, hospitals have faced challenges on several fronts, from trying to collect from patients to the increased paperwork needed to keep up with payor demand.    To stave this off to some degree in the United States there is a trend toward consolidation in the hospital industry which results in the changes in hospital structures.   However, statistics are showing some leveling off in declining facility numbers—by 2015 the figure is estimated to be fairly stable at 5,700 hospitals in the United States. 

Revenue growth is falling at many not-for-profit hospitals, which face reimbursement pressures from Medicare, Medicaid and commercial health insurers and declining volume from a persistently sluggish economy, according to a new report from Moody's Investors Service. The median revenue growth rate for hospitals and health systems rated by Moody's was 4% in fiscal year 2010, the lowest in two decades.   This was found in their report "Hospital Revenues in Critical Condition; Downgrades May Follow."  Medicare cuts, patient volumes, new administrative challenges and uncompensated services are plauging hospitals.  

Kalorama expects medical device growth to be limited in a  similar fashion as hospitals increasingly look to transparent pricing systems and group purchasing organizations to make their device purchases.  Device companies who do not participate in these programs will come under increased government scrutiny as states and the federal government assert their influence as key payors. 

These events are covered in detail in Kalorama Information’s report The Global Market for Medical Devices, which includes profiles of companies in the industry, forecasts of the device market and regional breakouts of the device market, products in development and other information.   The report can be obtained at http://www.kaloramainformation.com/Global-Medical-Devices-6921310/

OTC Drug Sales Not Recession-Proof

Results over the past few years may put to bed the theory that OTC drug sales go up during recession. It was something broadly predicted, including in our own reports. It turns out that OTC drugs were affected by consumers having less cash in their pockets, just as much as other products were. Some of the reasons for this are complex, and some are simple. Less money in your pocket?, Skip the visit the doctor. Don't visit the doctor, don't think you need any medicine, even OTC. But there's more than that... 

Despite predictions that consumers in recessionary times would flock to cheaper OTC drugs, the world over the counter drug market grew little in the past few years. The market grew just 3.5% since 2008, according to our latest report on the subject, The World Market for Over the Counter (OTC) Drugs.

According to the report, the 78 billion-dollar market for over-the-counter pharmaceuticals behaved as many products in the recent recession: almost no sales growth in 2009, and slowly increasing but below average growth in the past two years. OTC drug products are sold worldwide and the growth rates are highly fragmented by region and type of drug category. OTC drugs largely due to differences in economic conditions, perception of self-medication, education, access to medical advice and products, demographics, product availability, and incidence of diseases and medical conditions.

There are a couple of reasons. Consumers reduced doctor visits and sought to trim all medical expenditures since 2009, which dampened the benefit from customers preferring the lower prices. Lower-priced drug store brands competed well with brand products, reducing prices paid. And increasing numbers of patients insured through Medicaid and Medicare were better able to purchase prescription products, reducing the need for OTC purchases. 

Some regions showed faster or slower growth than average, and some drug categories also showed better performance.  These segments are detailed in Kalorama Information’s report, The World Market for Over The Counter (OTC) Drugs.  


The report can be obtained at: http://www.kaloramainformation.com/Counter-OTC-Drugs-6923618/