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Cost–effectiveness of nanomedicine: the path to a future successful and dominant market? “
Market uptake of ‘expensive’ nanotherapeutics could, however, increase significantly by the use of comprehensive standardized cost–effectiveness analyses.
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Keywords: challenges • commercialization • cost–effectiveness analysis • nanotherapeutics Rita Bosetti
The nanomedicine market: small particles – big business Nanoparticles have the tremendous potential to change the course of diagnostics and therapy [1] . An increasing number of products, whose therapeutic efficacy has been enhanced by their nanoscale dimensions, are already available on the fast emerging nanomedicine market [2–4] . Moreover, hundreds of nanobased products are currently in different stages of the preclinical and clinical development phase [5] . The Joint Research Center (JRC) of the European Commission revealed that 76% of publications and 59% of patents involve the drug delivery segment, dominating the nanomedicine market [4,6–7] . With 11% of publications and 14% of patents, in vitro diagnostics receives the silver medal in this continuously growing market [4,6–7] . Also, the report released by the JRC reveals that, with a share of 53%, the USA is world leader in number of patent applications in the field of nanobased drug delivery. According to the same report, Europe submitted only 25% of these patent applications. With a significantly lower share of 12%, Asia can be found on the final end of this ranking. Consequently, Europe is also less competitive in the area of nanobased drug delivery in comparison with the USA. Most nanoparticle contrast agents are also currently produced by US companies [7] . Indeed, at present, 46% of US pharma are involved in the commercialization of nanomedicine products, while European firms have a share of only 37% [7] . Moreover, 74% of nanomedicine products currently on the market are produced by US companies [7] . In the future, this gap between
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the USA and Europe will probably widen further since US firms are involved in 54% of development of nanotechnology-based products that are in the pipeline, compared with only 34% of European companies [7] . In contrast, when looking at publications, Europe has the highest share (36%), followed by the USA (32%) and Asia (18%) [4,6–7] . Clearly, European countries have difficulties in translating their research findings into commercially viable applications. Finally, the Freedonia Group Inc. released a report concerning the demand and sales of nanotherapeutics. They report that the demand will increase by more than 17% per year in the USA only. Sales will increase from US$53 billion in 2011 to an expected US$110 billion in 2016, for all nanomedical products. Over a period of 5 years sales are thus expected to increase with more than 100% [4,8–9] . Currently, the anticancer agents’ segment is not only the most advanced, but also the largest niche of the nanomedicine market. It reached a market value of approximately US$20 billion in 2011, increasing to US$33 billion in 2014 [4,6] . Nanomedical products for the CNS is another important niche of the nanomedicine market, which was valued US$11.7 billion in 2010 and increased to US$14 billion in 2011 [4,6] .
Biomechanics Research Unit, University of Liège, Chemin des Chevreuils 1 – BAT 52/3 – BE4000 Liège, Belgium bosetti_rita@ hotmail.com
Cost–effectiveness of nanomedicine: bridging the gap between the development of excellent health solutions & efficient commercialization Although the nanomedical market has great potential and has attracted interest from the
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part of
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Editorial Bosetti scientific community around the world, there seems to be a missing link between excellent technology development and the efficient commercialization of nanotechnology-based therapeutics. At present, commercialization of nanotherapeutics continues to be driven by start-ups and small- and medium-sized enterprises (SMEs) [6–7,10] . Big pharma shows low interest to invest in emerging nanotherapeutics [7,10] . For small nanomedical companies it is, therefore, extremely difficult to find partnering major pharmaceutical firms willing to license their established technology to bring the new nanobased therapeutics efficiently to market [6,10] . Moreover, companies producing nanomedical products are subject to significantly higher per-unitcosts [10] . Consequently, the existing diseconomies of scale in the field of nanomanufacturing result in high acquisition costs for nanotherapeutics, which continues to hamper their success and limits their introduction into everyday clinical practice [10] . Indeed, the acquisition cost of encapsulated therapeutics could cost up to tens of thousands of dollars per patient per year [11,12] . A high acquisition cost is mainly a problem in European countries, where reimbursements are cost-regulated [7] . In the latter countries, innovative high-efficacy drugs with high acquisition costs will have only a limited chance to be reimbursed. This could partly explain why European countries have difficulties in translating successful research findings into commercially viable products. Due to the low financial rewards coupled to the development of nanomedical products, companies marketing nanomedicines will have difficulties recovering their research and development costs. This represents a major obstacle to viable commercialization, undermining the future success of the nanomedicine market.
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...key issue for the future economic success of nanomedical applications and is a current missing link between excellent product development and efficient commercialization.
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The continuously rising healthcare costs are a problem, challenging both governmental and privately owned payers in developed countries [10] . Currently, pressure is growing to increase the efficiency of public services. Future medical developments are, therefore, not only required to be highly efficacious and safe, but they should also be available at reasonable costs [7] . New approaches that help contain the growth in healthcare costs while maintaining clinical efficacy, seems thus almost inevitable [13] . Market uptake of ‘expensive’ nanotherapeutics could, however, increase significantly by the use of comprehensive standardized cost–effectiveness analyses [11] . The latter studies are important in shifting
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focus on restraining healthcare costs while maintaining quality, thus creating value for money in the healthcare sector. Having the lowest cost for a given health effect, cost–effective interventions result in value for money for society. At present, the use of cost–effectiveness studies in the field of nanomedicine is still in its infancy [7,11] . Indeed, the use of cost–effectiveness studies is a crucial missing link that could improve the market introduction of nanotherapeutics significantly. Particularly, it could be crucial in times where healthcare is faced with a shrinking budget [4] . If evaluated properly, the initially ‘unattractive’ nanomedicine products, by means of their high acquisition costs, could become ideal candidates for reimbursement. Nanomedicine could contribute to affordable care, offsetting its high acquisition cost elsewhere. In particular, the lack of adverse events plays in favor of new encapsulated therapeutics, leading not only to savings in the number of medical procedures as well as a reduction of personnel costs and hospitalization days, but also allows patients to continue their work [4,14] . This is an important saving for society. These cost savings will be decisive for the overall cost effect of nanomedicine products [7] . A new cost–effectiveness framework is thus a key issue for the future economic success of nanomedical applications and is a current missing link between excellent product development and efficient commercialization. In turn, the use of standardized cost–effectiveness studies could make the nanomedicine market more interesting, attracting possible investments from large pharmaceutical firms. In essence, the use of comprehensive cost–effectiveness analyses should be the activator of a vicious circle: cost–effectiveness analysis demonstrates a new nanotherapeutic is cost–effective, serving as a basis for reimbursement. Once nanotherapeutics are reimbursed, Big pharma can be more easily attracted to invest in nanotechnology-based products, fueling the nanomedicine market. A first comprehensive cost–effectiveness study indicates that nanotherapeutics for ovarian cancer treatment are cost–effective but, surprisingly, also cost-saving for society [14] . However, to serve as a tool to improve the market introduction of nanotechnology-based therapeutics, many more cost–effectiveness studies for many more nanomedicine products are needed to corroborate the first promising results. Only then, reimbursements and, in turn, efficient commercialization can be attained. Future perspective Developed countries face continuously rising healthcare costs. To contain these spiraling costs and allocate the scarce healthcare resources efficiently, it is crucial to have a clear understanding of the cost–effectiveness
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Cost–effectiveness of nanomedicine: the path to a future successful & dominant market?
of efficacious yet expensive nanotherapeutics. Comprehensive and standardized cost–effectiveness analysis is a valuable tool to assess if nanotherapeutics’ additional health effects are worth the additional costs [11] . Therefore, reimbursements should be based on cost– effectiveness studies instead of acquisition cost. If not, nanotherapeutics will have only little chance of being reimbursed and, ultimately, reach the patient. Future support of nanotherapeutics with high acquisition costs is thus dependent on its value for money [11] . Low financial rewards and inefficient reimbursement policies based on acquisition cost are, however, not the only obstacles hampering the efficient commercialization of excellent nanotherapeutics. The future success of nanomedicine is also undermined by a too high uncertainty about the commercial success of nanomedicine by the limited knowledge in patients, citizens as well as physicians, and by the strict rules on introducing new drugs [4,10] . Public awareness of nanotechnologies continues to remain low [4,7,10] . Therefore, citizens in general and physicians in particular should be properly informed by workshops and focus groups about the benefits and risks of nanomedicine [7,10] . Moreover, the current legislation applied to nanomedicine products is under discussion [7] . Safety concerns regarding nanoparticles require new regulations [7,10] . Also, nanotechnology-
The author has no relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties. No writing assistance was utilized in the production of this manuscript.
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enabled innovations are hampered by weak patent protection and current failures on the generics as well as the insurance markets [4,10] . Reimbursement is crucial for the efficient commercialization of nanotherapeutics [7] . Cost-regulation strategies are negatively influencing the market introduction of nanomedicine. Therefore, future reimbursements should be based on the use of comprehensive, standardized cost–effectiveness analyses [7] . Medical science and the pharmaceutical industry have thus still a long way to go. Not taking action now would be wasting opportunities. By doing nothing or intervening too late, there would be a significant risk of blocking successful future innovations in nanomedicine [4] . The use of cost–effectiveness analyses is a necessary – but insufficient – step for nanomedicines’ future success. Financial & competing interests disclosure
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