[Healthcare costs have two important components -- the cost of treating diseases and the costs of not treating them. In the din of discussion of rising healthcare costs, frequently the mantra is heard that medical technology is responsible for the higher costs. Yet, in the case of chronic diseases, the associated, preventable complications, which can run the gamut from heart disease, stroke, wound care, infection control and numerous other complications, reducing the exorbitant costs chronic disease complications is a primary goal of medical technology development.]
Chronic diseases continue to garner much attention due to their blame in rising healthcare costs. Obesity, for one, is gaining more attention by the day, particularly since it can be associated with or directly lead to many other healthcare problems (heart disease, hypertension, end-stage renal disease, vascular disorders, stroke), all of which contribute significantly to rising healthcare costs. Treatments are diverse, with the most effective options — at least in the short term — being those involving bariatric surgery and the use of devices like lap banding and gastric stimulation. The drawbacks are, of course, that these surgical options can be highly invasive, they do not address the root causes of obesity and as effective interventions as they may be for life threatening obesity, they sometimes represent only short term solutions.
Another major contributor to chronic disease is Type 2 diabetes, particularly for its high prevalence worldwide and its correlation with growth in the incidence of obesity. If left unchecked, its associated complications are enormously costly both in human and financial terms, yet the number of options for its effective management make it a high profile target of healthcare industry attention..
By no means representing all chronic disease and certainly recognizing the overlapping involvement of obesity and diabetes, obesity and diabetes are nonetheless among the most salient examples in which chronic disease creates enormous potential for medical technology.
Considering these two chronic conditions, we provide additional data on each that bear on the size of the opportunity to make an impact on chronic disease.
Diabetes
The most common form of diabetes, Type 2, which manifests itself more frequently in adults, represents a huge and growing segment of the global population, all the more for the fact that upwards of 80% of all cases of Type 2 diabetes are undiagnosed yet insidiously lead to a myriad of health problems like hypertension, heart disease, diabetic retinopathy, diabetic nephrophathy, stroke and other circulatory disorders.
In the chart below is shown the prevalence of diabetes (all types) by region in 2003 and forecast for 2025, illustrating dramatic regional and overall growth.
Source: International Diabetes Federation; MedMarket Diligence, LLC, report #D500, "Diabetes Management, Worldwide, 2005-2015: Products, Technologies and Markets in the U.S., Europe, Japan & Rest of World."
The presentation of type 2 diabetes has a high correlation with cardiovascular disease and obesity; overweight middle-aged people age are much likelier to develop the condition than individuals of normal weight. The associated costs of treating the condition and its complications are vast compared with the cost of the drugs that are currently available. This explains why diabetes has become a prime candidate for disease management programs; pharmacy benefit managers see a good opportunity to reduce the overall cost of the disease through better and earlier intervention with medicines.
The size of the patient population, its steady growth – especially rapid in developing world countries enjoying new prosperity – and the limitations of current treatments mean that diabetes has become a major R&D focus for many of the world’s largest drug companies. These include Bayer, Pfizer and Servier, as well as Eli Lilly, Novo Nordisk and Sanofi-Aventis, and biotechnology companies such as Amylin.
Unlike Type 1 diabetes (juvenile onset), which is characterized by lack of insulin production, Type 2 diabetes is variably characterized as being associated with either with patients’ inadequate insulin production or production of ineffective forms of insulin. This requires different therapeutic regimens to either provide insulin or other drugs that can moderate the patient’s sensitivity to insulin in order to effectively regulate blood glucose levels.
While drugs and devices for the monitoring and treatment of type 2 diabetes are well established, this does not equate with lack of opportunity in the market, given the trend in prevalence, untapped patient population, accelerating healthcare costs and other drivers. In fact, tremendous opportunities exist for better drugs (e.g., considering recent questions about Avandia), less invasive glucose measurement (e.g., painless lancing, near-infrared or similar non-invasive approaches), less invasive delivery of insulin (although Exubera, the inhalable insulin from Pfizer was approved in early 2006, questions about respiratory effects and other questions have dampened the — one might say — overly "exuberant" potential for this drug), and other treatments to improve clinical outcomes and further penetrate the undiagnosed type 2 population.
Bariatric Surgical Device Unit Sales Volume, 2004-2015
|
|
Unit Sales
(000s) |
Growth
(%) |
|
2004
|
42.2
|
|
|
2005
|
50.3
|
19.2%
|
|
2006
|
66.9
|
32.8%
|
|
2007
|
82.1
|
22.8%
|
|
2008
|
98.8
|
20.3%
|
|
2009
|
121.3
|
22.8%
|
|
2010
|
151.9
|
25.2%
|
|
2011
|
187.3
|
23.3%
|
|
2012
|
239.3
|
27.8%
|
|
2013
|
310.3
|
29.7%
|
|
2014
|
399.5
|
28.7%
|
|
2015
|
513.5
|
28.5%
|
|
CAGR (2004-2015)
|
25.5%
|
|
Source: MedMarket Diligence, LLC, report #S825, "Clinical Management of Obesity Worldwide."
Most physicians now view obesity not, as was common in the early 1900s, as a symptom of a weak character, but as a disregulation of eating, a metabolic disorder of multifactorial etiology, probably including a genetic factor that may give obesity an inherited aspect. Researchers continue to explore the complex variables causing obesity, and have uncovered critical facts that are already affecting the market for treatments of obesity. Among these are that the only treatment that appears to work today for long term weight loss for the morbidly obese (BMI>40), i.e. those who need to lose at least 100 pounds, is bariatric surgery; that once a person, whether overweight or obese, loses 15-20% of their excess weight, the body seems to throw a switch into regain mode; and that a small percentage of patients who undergo successful bariatric surgery regain the lost pounds. Hence, there is a market not only for drugs to lose the weight, but drugs to maintain weight loss.
As noted in the July MedMarkets, the number of anti-obesity drugs in the pipeline has grown dramatically and, with the recent regulatory failure of Pfizer’s rimonabant, and limited market success of Roche’s Xenical and Abbott Laboratories’ Meridia/Reductil, the demand for an obesity drug remains very high. In addition, anti-obesity drugs are also gaining a following among those who only need to lose a few pounds, and hence the potential market is expanding to include not only the obese, but the lifestyle and wellness consumer as well.
The market is attractive not only to companies focused upon the treatment of obesity, but to firms working in related areas. A number of biotechs, for example, are taking up the twin challenges of diabetes and obesity research through study of neuroendocrine and metabolic pathways, as well as fat absorption and appetite suppression. Some biotechs have chosen to develop diagnostic tests for lipid disorders and a tendency towards obesity. A wide range of approaches are being developed, mirroring the multifactorial basis of obesity.
Diabetes and Obesity Common Ground
Both type 2 diabetes and obesity may be characterized as preventable for a significant share of the population and through many of the same ways. Diet, exercise and level of sedentary lifestyle are all factors that can lead to obesity and/or diabetes. The causative and other relationships between the two are many (and for this, this article could be fairly critiqued for addressing these two "different" diseases).
A recent Wall Street Journal article (August 22, 2007), "To Heal Diabetes, Doctors Push Weight-Loss Surgery," highlighted a trend among some physicians to treat diabetes by tacking obesity as a sort of lynchpin in the problem. The article noted studies that showed bariatric surgery for type 2 diabetes resulting in their diabetes disappearing in 75% of such cases. Although the mechanisms aren’t clear, evidence points toward hormones in the intestine that, in the diabetic patient, act in ways that affect insulin metabolism but that, when "bypassed" by surgery results in normal or near normal blood glucose regulation by insulin. However, as positve as the 75% diabetes remission figure may be, the operative phrase dictating reimbursement (or lack thereof) is "mechanisms aren’t clear", so until such time as this evidence is more definitive, there will be at best tepid support by third party payers for a procedure that has high morbidity (death rate of 0.1% to 1%)
When considering chronic disease driving healthcare costs and stimulating global medical technology markets, one cannot exclude cancer and heart disease. The numbers of patients, need for treatments that bring down costs and the resulting market demand are at least as significant for these as for diabetes and obesity. For this reason, a wide range of drug, diagnostic and therapeutic options have been developed and refined and now represent areas of extremely robust competitive activity. Obesity and diabetes, for their part, however, represent patient populations who have not quite fully come into view nor have they been penetrated by medical technology to the degree of cancer and heart disease and, hence, offer alluring market potential.
The imperative for medical technology manufacturers is to recognize that chronic disease is a huge juggernaut driving activity in healthcare markets and they are therefore well advised to get ahead of this, to present cost effective solutions to chronic disease or at least to consider (and promote) the positive impact of new technologies on chronic disease.
