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The Supply of Medical Isotopes

An Economic Diagnosis and Possible Solutions

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This report explores the main reasons behind the unreliable supply of Technetium-99m (Tc-99m) in health-care systems and policy options to address the issue. Tc-99m is used in 85% of nuclear medicine diagnostic scans performed worldwide – around 30 million patient examinations every year. These scans allow diagnoses of diseases in many parts of the human body, including the skeleton, heart and circulatory system, and the brain. Medical isotopes are subject to radioactive decay and have to be delivered just-in-time through a complex supply chain. However, ageing production facilities and a lack of investment have made the supply of Tc-99m unreliable. This report analyses the use and substitutability of Tc-99m in health care, health-care provider payment mechanisms for scans, and the structure of the supply chain. It concludes that the main reasons for unreliable supply are that production is not economically viable and that the structure of the supply chain prevents producers from charging prices that reflect the full costs of production and supply.

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Barriers to Full-Cost Recovery and Policy Options

The structure of the supply chain, the cost structure and funding of nuclear research reactors (NRRs) and the resulting behaviours of supply chain participants are the main barriers to full-cost recovery. NRRs have high fixed costs while marginal costs of irradiation are low. NRRs are captive to local processors and have little choice but to continue supply even at prices that are too low, while government funding sustains their operations. Downstream, price competition creates a disincentive for processors and generator manufacturers to increase prices unilaterally. Although health care provider payment must not be neglected, it is not the main barrier because Technetium-99m (Tc‑99m) is a small item in the overall cost structure of nuclear medicine providers who could absorb necessary price increases in most cases. A number of policies could help achieve full-cost recovery and improve the reliability of Tc‑99m supply. A phased and co-ordinated discontinuation of government funding of irradiation-related costs for NRRs could catalyse price increases. This could be accompanied by policies ranging from increased price transparency to price regulation. Funding of irradiation by end-user countries could be an alternative option. However, no single policy can be recommended as the preferred solution and each option has strengths and weaknesses. Governments need to co-ordinate their efforts and evaluate options in more depth in co-operation with all stakeholders to identify the most acceptable solutions in their respective jurisdictions.

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